Sales Tax - A Brief Review

In Colorado sales taxes are assessed by a variety of governmental entities; cities, counties, special taxing districts and the state itself. The sales tax amount is calculated as a percentage of retail sales. Every quarter retailers remit the sales tax they have collected to the state. The state has the responsibility of apportioning the proceeds to the appropriate entities.

The state sales tax is 3 percent which is basic, minimum sales tax in Colorado. In addition to the state tax of 3 percent, each geographic area in the state may have a local tax of any amount it selects. In addition, there may be local taxing districts which also can impose a sales tax.

The RTD is an example of a large local taxing district that imposes an additional .8 percent sales tax in Denver, Boulder and several other counties. The Niwot Improvement District (NID), which includes the downtown Niwot area, is an example of a small, local district, that adds .5 percent sales tax .

Boulder County’s component of the sales tax is .4 percent. This brings the total sales tax collected in Niwot to 4.7 percent.

The City of Boulder adds a different, larger component, which results in a 7.14 percent sales tax in Gunbarrel.

An article published in the Courier last summer analyzed three years of sales tax revenues. The figures indicated that the sales tax revenues had been growing in Niwot and Gunbarrel by double digit percentages yearly.

After the article was published Commissioner Ron Stewart called the Courier and asked about the source of our figures. Amounts had been obtained from the State Department of Revenue and from the City of Boulder.

Stewart said, "I have not seen these increases in the tax collected from Niwot. I think, in some years, the Niwot Improvement District taxes have not covered the bond costs." He continued by saying, "Look into it."

To date, Boulder Douglas and Larimer Counties have started an investigation.
 

Recently the Courier began to ask questions too. Sales tax is remitted to the state on a quarterly basis. A very small booklet is provided by the state in which the store owner records all taxable sales for the quarter and then calculates each element of the tax to arrive at the total amount due.

Roni Hinkson is an accountant from Denver who services several stores in Niwot. She stated, "When I started working in Niwot several stores were collecting and paying different amounts. Some of the store owners had different booklets. Two of the store owners had booklets which didn’t list the NID and it’s a .5 percent tax. Some booklets did show the tax. The owners may not have known how to remit that tax to the state if it was not listed in their booklet."

It is also possible that the tax was remitted to the state but was not allocated properly to the county.

"I began," Roni continued, "to use an extra column in the booklet form and listed the NID tax there. As of January 1999 all of my clients have received correct booklets with all of the components of the sales tax listed."

In Roni Hinkson’s tale may lie the answer to the whereabouts of at least part of the missing sales taxes.