Colorado Sales Tax Refunds to Top $67 Millions
- Sales Tax News
- Sep 23, 2015 | Gail Cole
Colorado’s Taxpayer Bill of Rights (TABOR) is designed, in part at least, to “reasonably restrain most the growth of government.” One way to restrain growth is to prevent the accumulation of excess revenue.
Last week, for example, the state provided a retail marijuana tax reduction day in order to offset the more than $65 million collected in retail marijuana taxes during fiscal year 2014-15. Partakers partook with enthusiasm, although there were no huge crowds.
There are spending limits under TABOR, unless voters approve a different position. The state must refund revenue that exceeds certain limits. The spending limits section reads, in part:
“The maximum annual percentage change in state fiscal year spending equals inflation plus the percentage change in state population in the prior calendar year, adjusted for revenue changes approved by voters after 1991…. If revenue from sources not excluded from fiscal year spending exceeds these limits in dollars for that fiscal year, the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset.”
As explained by the Center on Budget and Policy Priorities, “if the general inflation rate is 2 percent and the state’s population grows by 1 percent, state revenue available for expenditures can increase by 3 percent. The balance must be refunded to taxpayers.”
Spend it wisely
“The first $85.7 million of the surplus will be refunded through the Earned Income Tax Credit (EITC), available to low-income workers. The remaining $67.9 million will be refunded through the sales-tax refund” (Durango Herald).
Actual refund amounts will vary. Taxpayers can expect anywhere between $13 each (single filers with adjusted gross incomes of up to $36,001) to more than $262 for households that qualify for the EITC.