Officials from a small business advocacy group decried a Colorado Supreme Court ruling that left unanswered the question of whether or not business filing fees charged by the state are actually a tax subject to constitutional limits.
“We are, of course, disappointed with the court’s decision. However, Colorado businesses should be thoroughly disappointed with the court’s lackadaisical attitude in examining the fee versus tax issue,” said Tony Gagliardi, state director of the National Federation of Independent Business.
The court ruled there were insufficient facts in the record to resolve this dispute and declined to decide whether increased business filing fees should be viewed as taxes.
The NFIB brought a lawsuit alleging the Colorado Secretary of State has repeatedly violated the Colorado Taxpayers Bill of Rights in raising business filing fees. The lawsuit maintained the increased charges were actually tax hikes that should have been submitted for approval to Colorado voters.
According to the lawsuit, the secretary of state collects more than $20 million a year in business filing fees used to fund unrelated functions,
The case was first heard in 2014 in a Denver district court that dismissed the lawsuit. The Colorado Court of Appeals subsequently ruled the case was improperly dismissed, but declined to consider the issue. The Colorado Supreme Court agreed to hear a challenge
“The decision leaves unresolved whether and to what extent the secretary may continue increasing fees on the small business community. However, our lawsuit has put the secretary on notice that we will scrutinize increased charges going forward,” said Karen Harned, executive director of the NFIB Legal Center.