Following town council and county commissioner action July 23, voters will decide during the November election whether to impose a use tax on construction materials purchased outside of Archuleta County.
The Nov. 3 election is a mail-ballot election.
Although key details of the proposed use-tax remained scant during the joint town-county meeting, members of the Archuleta County Board of County Commissioners (BoCC) agreed to put the question on the fall ballot, thereby meeting the July 24 deadline for notifying Archuleta County Clerk June Madrid.
With the BoCC agreeing to support the ballot question by carrying roughly $30,000 in election costs, town council members Mayor Ross Aragon, Darrel Cotton, Stan Holt, Shari Pierce and Mark Weiler — Jerry Jackson and Don Volger were absent — appeared poised to carry the question forward.
“A use tax levels the playing field for local merchants selling building materials to local contractors. This isn’t a new tax,” said Weiler.
Although Weiler asserted that the successful passage of the ballot question would not impose a “new” tax on the vast majority of town and county residents, those who choose to purchase building materials from outside the county — again, given successful passage of the measure — would indeed pay a “new” tax on top of the sales taxes they already pay.
In separate interviews, Town Manager David Mitchem and Archuleta County Administrator Greg Schulte explained that the proposed use tax was not intended to impose taxation beyond the 6.9 percent already paid when goods are purchased within the county. Instead, the proposed use tax would fill the gap between the state tax of 2.9 percent for goods purchased in neighboring Colorado communities and the remaining local sales tax the town and county miss when construction materials are purchased elsewhere. That said, voters could see a 4-percent use tax on the November ballot.
Unfortunately, the 4-percent figure remains speculative, as the town-county discussion did little to illuminate how much of a use-tax would be proposed or imposed, when it would be paid, who would handle the bureaucratic paperwork shuffle, who would be required to pay, and most importantly, how would the use tax dollars collected be spent?
On Tuesday, Schulte said the county and town would hammer out details of the use tax ballot question in the coming weeks, with a joint session scheduled for Aug. 20 to finalize the ballot language.
Town Manager David Mitchem said use taxes are often levied when a builder pulls a building permit, but that those administrative details would be worked out at a later date.
Although the local builder’s association has not issued a formal statement for or against a use tax, association president Bob Hart said, “Most builders I’ve talked to don’t really have a problem with it, but we question how it will be tracked and administered.”
Specifically, Hart was referring to when the tax might be imposed, and said requiring payment at the time a building permit is pulled could create a mountain of paperwork and additional and unnecessary bureaucracy, which could result in increased costs and expenses to builders.
As an alternative, Hart suggested that town and county officials inquire with the state to determine if there is a program that would allow the use tax to be collected at the place of purchase. Once collected, those use tax dollars would circulate through the proper state channels, ultimately arriving at the town or county.
Hart’s suggestion might work well for materials purchased within the state of Colorado, but it might not work for materials purchased in other states.
Use tax ballot questions are not without precedent in Archuleta County.
In 2003, the Board of County Commissioners approved ballot language that would have imposed a 4-percent use tax on construction and building materials, including those used in oil and gas production and facilities; on motor vehicles purchased outside the county and on building materials unrelated to oil and gas. According to the ballot question, the revenues were to be shared equally between the town and county.
Archuleta County voters trounced the proposal, 3,003 votes to 350.