Aug 2, 2022 - News

Denver is inadvertently charging taxes on its new fees

Illustration of a hand pulling a heavy weight with a "%" sign carved on the side.  
Illustration: Aïda Amer/Axios

You may not have noticed, but Denver is charging sales tax on its 10-cent bag fee, along with the 27-cent charge for most deliveries implemented last month.

  • It's generating additional revenue for the city, but that wasn't supposed to happen, officials now say.

Why it matters: The delivery fee was intended to be exempt from local sales tax, according to the Denver Gazette.

  • The taxes collected — a half-cent from the bag fee and 1 cent from deliveries — aren't much, but Denver's Department of Finance spokesperson Kiki Turner said it was unintentional.

Driving the news: An ordinance set for consideration Tuesday in a city council committee would exempt the two fees from the city's sales tax, which currently sits at 4.81%.

  • The exemption is backed by the Colorado Municipal League, a nonpartisan organization that represents cities.
  • Aurora City Council member Dustin Zvonek is reportedly considering a similar bill for Denver's neighboring city.

Of note: The bag fee has generated $575,000 between its implementation in July 2021 and the end of September 2021.

  • Turner wasn't immediately able to provide updated data, or figures on how much sales tax revenue the bag fee had generated.
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