Several Colorado cities are suing the state over a new law that would keep them from collecting sales and use tax on building materials for public schools.
HB22-1024 passed the legislature this year with bipartisan support in both chambers. Gov. Jared Polis signed it into law in April and it is slated to go into effect in August. In short, lawmakers said they wanted to keep taxpayers from paying extra on school buildings.
The sponsoring lawmakers said they considered that when drafting the bill. Since the state often helps fund school construction, the sales tax on materials becomes a state interest, sponsor Sen. Chris Kolker, a Centennial Democrat, said.
He doesn’t think the cities are intentionally gouging state taxpayers, but that they are raising money off the backs of taxpayers trying to improve education. He called it “common sense” not to add sales tax to things already being paid for with tax dollars.
“We as a state backfill school districts on their funding,” Kolker said. “When their funding is now being reduced because of a sales tax — which is typically exempted on nonprofits — then that requires more of that funding coming from us to backfill the needs of the school district.”
Read more here