Colorado Car Tax (er, ‘FASTER’ vehicle registration “fee”) hike legal challenge loses first round in Denver District Court
The Colorado Car Tax (er, “vehicle registration fee”) increase passed in 2009 (SB108, the so-called “FASTER” bill) is quite possibly THE most unpopular tax increase in Colorado history – made all the more repugnant by how it became law (exploiting a 2008 Colorado Supreme Court ruling which declared that “fees” don’t count as “taxes” to circumvent the constitutional requirement (under Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, a.k.a. TABOR) to receive prior voter approval for any ‘policy change resulting in net revenue gain’ to the state).
After two years of legislative inaction failed to repeal or roll back the unconstitutional and unpopular tax increase, the ‘FASTER’ Colorado Car Tax was challenged in court as a violation of the Colorado state Constitution (specifically, Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, TABOR).
Denver District Court Judge Michael Martinez (already notorious for his ruling in the Douglas County School Choice case) recently (19 July) ruled against the TABOR plaintiffs (and Colorado taxpayers), after holding a 2-day trial in May following his earlier rejection of a Motion for Summary Judgment.
In its ruling, following a two-day trial, the district court held that the CBE is an exempted enterprise and its assessment is a “fee” and not a “tax.” Mountain States Legal Foundation press release, “Taxpayer Group’s Challenge To State Bridge Tax Rejected“
However, to arrive at that conclusion, Judge Martinez ignored both clear constitutional language and binding Colorado Supreme Court precedent on both the nature of an “exempted enterprise” and the definition of a “fee” under the Colorado Constitution (Article X, Section 20).
Judge Martinez erroneously concluded that the charge to Colorado motor vehicle owners payable to the “Colorado Bridge Enterprise” was a “fee” rather than a “tax” regardless of whether the vehicle in question ever crossed ANY bridge in Colorado (much less any of the “168 bridges… identified as eligible for CBE funding” or the 56 bridges transferred to CBE “ownership”). Importantly, the definition of “user fee” includes a nexus to the “user” – irrespective of Martinez’ sophistry with regard to “frequency” or specific “calibration” of use, the lack of ANY nexus of “user” to “fee” clearly exposes the charge as an unconstitutional and illegally-imposed tax. Martinez is flat-out wrong in his assertion that
a nexus between an individual’s use and the permissibility of a user fee is not required in Colorado. (TABOR Foundation v Colorado Bridge Enterprise TRIAL COURT ORDER, at 10)
Even the notoriously expansive Barber v. Ritter ruling by the Mullarkey Court upheld the user-fee nexus, stating that only when
the primary purpose for the charge is to finance a particular service utilized by those who must pay the charge, then the charge is a “fee.” [Barber v. Ritter; emphasis added]
Martinez similarly errs in asserting that “the CBE is a self-supporting business under the TABOR statute.” Not only does the CBE illegally collect tax dollars (paid by vehicle owners to the county clerks as part of the vehicle registration process), but it also receives grant money from state and local government in excess of the 10% threshold to qualify as an “exempted enterprise” under TABOR.
In fact, the entire existence of the CBE is a farce, since the personnel constituting the “enterprise” are identical with the Colorado Department of Transportation (CDOT) board. The CBE is nothing more than a legal fiction specifically designed to circumvent TABOR – and illegally steal (er, “extract”) money from Colorado taxpayers (er, “fee”-payers).
Fortunately, Judge Martinez – among the most-overturned judges on the Denver District Court – does not get the final word, as an appeal of this execrable ruling to the Colorado Court of Appeals (and, most likely, ultimately to the Colorado Supreme Court) is inevitable – and imminent.
Read more about the TABOR Foundation v. Colorado Bridge Enterprise case in these documents:
- TABOR Foundation v Colorado Bridge Enterprise TRIAL COURT ORDER
- TABOR Foundation v. Colorado Bridge Enterprise REPLY IN SUPPORT OF PLAINTIFF’S MOTION
- TABOR Foundation v. Colorado Bridge Enterprise PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
- TABOR Foundation v. Colorado Bridge Enterprise COMPLAINT
- Life in the FASTER lane – updates on the Colorado Car Tax
- The Colorado Car Tax – er, “vehicle registration fee” increase
Clear The Bench Colorado will, with your support, continue to promote transparency and accountability in the Colorado judiciary, informing the public to increase awareness of the substantial public policy implications of an unrestrained activism and political agendas in the courts. We will continue to work to educate voters and provide information of relevance related to the judicial branch, and to provide useful and substantive evaluations of judicial performance.
Ultimately, though – it’s worth the effort.