Aspen’s 20 cent surcharge on paper grocery bags is a fee, not a tax, so legal under TABOR, Colorado Supreme Court rules

Aspen’s 20-cent surcharge on paper grocery bags is not a tax and therefore is not subject to the state’s Taxpayer’s Bill of Rights, the Colorado Supreme Court ruled on Monday.

The Colorado Supreme Court ruled that because Aspen uses the paper bag fee to defray the costs of waste management it is not subject to TABOR requirements including voter approval.

“When a government exercises its authority pursuant to its police power to regulate for health and safety, and imposes a charge as part of a regulatory regime, and the charge is reasonably related to the direct or indirect cost of regulating the activity, such a charge is not a tax subject to voter approval,” the ruling says.

The Aspen City Council passed an ordinance in 2011 that banned plastic grocery or store bags and assessed a fee of 20 cents per paper bag in 2011, court records indicate. The law went into effect the following year.

The Colorado Union of Taxpayers Foundation sued Aspen claiming that the bag charge was a tax that was never approved by voters. The plaintiffs in this case asked a state court to find the bag charge is unconstitutional.

The case was dismissed in lower courts on the basis that the bag fee was not a tax. The Colorado Supreme Court upheld the decisions, ruling that municipalities have police powers to charge fees if the money is directly used for intended services.

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