Gov. Jared Polis and the legislature final 12 months waived the state’s 2.9% gross sales tax for menstrual merchandise and diapers, billing it as a solution to save Coloradans cash on important hygiene gadgets.
“This new bipartisan legislation lastly ends the gross sales tax on diapers and female hygiene merchandise completely and begins saving individuals cash on these essential merchandise,” Polis stated in a information launch on the time.
However many Coloradans are nonetheless paying native gross sales taxes on the products.
That’s as a result of just a few municipalities and counties have adopted the state’s lead, which means that almost all of the gross sales tax burden stays.
“It was all the time a hope that municipalities and different taxing authorities would observe swimsuit so there would finally be no gross sales tax statewide on these merchandise, however we couldn’t pressure that,” stated former state Rep. Susan Lontine, D-Denver, a sponsor of the invoice.
The legislation went into impact in August 2022, however the gross sales tax exemption started in January, giving the state time to work with companies on the adjustment.
When Home Invoice 1055 was signed in 2022, nationwide information retailers like CNN and CBS picked up the story, working headlines like “Colorado eliminates gross sales tax on diapers and menstrual merchandise.” However the actuality is that a lot of the gross sales tax burden stays since native gross sales taxes — imposed by municipalities and counties — mix to be a lot greater than the state’s price.
In Englewood, for instance, shopping for a field of tampons nonetheless features a gross sales tax of 4.05% made up of taxes collected by the town and Arapahoe County.
Denver, Fort Collins and Aurora had already exempted menstrual merchandise and diapers from their municipal gross sales taxes earlier than the invoice was signed into legislation. Since then, among the state’s largest cities, together with Pueblo and Boulder, have enacted the identical exemptions.
However different main cities like Colorado Springs and most municipalities within the Denver metro space haven’t.
Lakewood Mayor Adam Paul stated a part of the rationale his metropolis hasn’t exempted interval merchandise and diapers from the native gross sales tax is due to the issues of Colorado’s tax construction. He stated it could take a number of work with retailers and residents to make the change.
“It’s not an in a single day course of,” he stated. “It wants outreach and schooling.”
He stated he’ll encourage Lakewood’s Metropolis Council to take up the problem after the November election.
Whereas Paul stated he’s not involved in regards to the comparatively small quantity of income that may be misplaced by placing the exemptions in place, leaders in different cities have outright rejected the thought over these considerations. This month, as an illustration, the Steamboat Springs Metropolis Council soundly defeated a proposal to create the exemption after members voiced considerations in regards to the affect on their price range.
“Whereas I agree that it could be an excellent factor in the event that they have been extra inexpensive for individuals who wrestle to afford the requirements of life, there’s additionally this humorous counter in my mind that retains asking: ‘At what level are we going to nickel-and-dime ourselves as a council into price range points?’” Councilwoman Joella West stated within the assembly.
The town’s finance director informed the council the choice would value Steamboat Springs $100,000 to $150,000 per 12 months, which is lower than 0.5% of annual gross sales tax income, based on The Steamboat Pilot & Immediately.
Nonpartisan legislative staffers predicted the change on the state stage would value Colorado $13 million within the 2023-24 fiscal 12 months, which started July 1.
In an announcement to The Colorado Solar, Colorado Springs Mayor Yemi Mobolade stated the town hasn’t explored the potential of exempting the hygiene merchandise however that they’re “monitoring the dialog.”
The invoice, which had bipartisan assist, didn’t require cities and cities to alter their tax system to be in step with the state, nevertheless it explicitly famous that they might.
Sen. Sonya Jaquez-Lewis, a Longmont Democrat and one other prime sponsor of the invoice, stated she gained’t admonish the cities that haven’t adopted the state’s determination however is completely satisfied to listen to about people who have.
“Hopefully that sends a message that they’re actually in contact with their neighborhood members and what they’re fighting,” she stated. “If it will probably occur in different communities, nice, however I’m not gonna choose Steamboat or some other neighborhood that’s unable to do it at this level.”
She added that the state legislature taking the step does make it simpler for cities to hitch in.
“I’d encourage any native municipality to consider beginning out with at the least one grouping of the important gadgets,” she stated.
Rep. Leslie Herod, a Denver Democrat and one other sponsor of the invoice, stated their most important objective was simply to take away the state gross sales tax.
“We positively encourage it, however they’re all autonomous our bodies, and it’s actually their determination to resolve what’s proper for his or her neighborhood,” she stated.