Commission drops internet-tax idea, wants general sales tax

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By Gail Binkly

The Montezuma County commissioners have abandoned the idea of a tax on internet sales after hearing from the Colorado Department of Revenue that such a tax would be unconstitutional.

However, they are now leaning toward putting a question on the November ballot that would ask voters to approve a 1-cent general sales tax.

At two meetings Thursday, Aug. 2, the commissioners said they disagreed with the state about the constitutionality of the internet tax, but thought it might be too costly and difficult a legal battle to be worth fighting.

The commissioners held a town hall at the county fair in the afternoon and also met with the county Planning and Zoning Commission that evening.

They had said at a previous meeting that they wanted a tax of perhaps 3 to 5 percent on internet sales to level the playing field for local businesses, which unlike online retailers are required to collect state and local sales taxes.

They also spoke favorably about putting a tax on marijuana sales because, as 22nd Judicial District Attorney Will Furse put it at the evening meeting, “We’re experiencing all of the negatives and none of the positives” from legalized cannabis.

Commissioner Larry Don Suckla had called for the taxes to help with the county’s budget woes, which are being brought on by a combination of factors. Suckla said he did not feel, as the state did, that an internet sales tax would be unfairly targeting one entity because “the internet is not an entity, it’s a platform.”

Suckla did not attend the special meeting with P&Z, but Commissioners Keenan Ertel and James Lambert did.

They asked the members of P&Z for their thoughts on the sales tax, which led to expressions of some frustration, as P&Z had come out in favor of a sales tax more than a year ago and had discussed it at length, only to have the commissioners apparently abandon the idea.

The City of Cortez has a 4.05 percent sales tax and as a result has a fairly steady revenue stream, but the county has no sales tax at all – one of just a handful of Colorado counties in that situation. Ertel pointed out that this did not create much motivation for the county to promote tourism, since it gains nothing from increased sales.

“As a county, it’s not a wise investment for us to invest in commerce,” Ertel commented, adding, “The city has gobbled up a lot of the tax appetite in this county.”

Ertel said the county will face a budget shortfall of $600,000 to $700,000 this year and he is adamantly opposed to using reserves to make up the difference.

He said a sales tax is “the most equitable tax there is,” a sentiment echoed by planning commissioner Rob Pope.

Ertel and the members of P&Z appeared to be fully in favor of asking voters for the 1-cent sales tax, but Lambert said he had hoped the proposal would include a provision linking it to lower property taxes. However, the other officials said they did not want to “handcuff” the county in the future when the revenues might be needed.

Asking if the lack of a tie to a lower mill levy was a “showstopper” for him, Lambert said no.

However, others noted that Suckla probably would not support the sales-tax proposal without it including such a provision.

The commission is expected to take up the matter Monday. They have until Sept. 7 to give the final language for the ballot question to County Clerk and Recorder Kim Percell, or to drop the matter.

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From August 2018.