Use tax is unnecessary burden on Marshall Fire victims
Use taxes are a headache. They are hard to make sense of and can often seem overly burdensome. But, as complicated as they may be to understand, they are meant to protect a community. According to the City of Louisville, use taxes are designed to “equalize competition between in-city and out-of-city vendors” and “to protect local sellers who would otherwise be at a competitive disadvantage.” A use tax is, essentially, one way to ensure that our communities — and the people and businesses therein — have the financial means to thrive.
It is quite shocking, then, to learn of the vast sums that Louisville, Bounder County, the state of Colorado and RTD will likely collect from the victims of the Marshall Fire. By one measure, some $20 million tax dollars will be collected from the purchase of the materials needed to rebuild the hundreds of homes destroyed in the fire.
The very people who need to be uplifted, who need the support of a community in order to once again be able to thrive, are the very people who are being saddled with an egregious bill. For those residents and families rebuilding in Louisville, the average use tax bill could hit $20,000 per house.
That’s $20,000 on top of everything else. A report from May noted that, depending on the cost per square foot, just 33% of homes lost in the fire were insured enough to fully cover the price of rebuilding. For the rest, the average shortfall ranges from $99,000 to more than $240,000. This means, for some homeowners and families, a tax bill of $20,000 could pile up on top of the $240,000 already needed to rebuild.
It is also $20,000 on top of all of the incalculable tolls: the trauma of losing a home, belongings, family heirlooms and memories.
But it is $20,000 that doesn’t necessarily need to be collected at all. Superior set the example. While residents there will still have to pay a use tax to the county, the state and RTD, Superior will rebate its portion.
It’s no wonder then that residents marched outside Louisville City Hall on Saturday chanting, “One community; share the burden.” It is thousands of dollars that can, with a vote, be rebated.
For its part, Louisville says it is not so simple. Due to the “restricted nature of the voterapproved use tax, the tax cannot be waived or rebated from the restricted funds,” a recent City Council agenda noted.
To be clear, though, this is not money that any of these governmental bodies would have planned to have — no one was planning on the Marshall Fire ravaging the region last December. No one was budgeting for a few million dollars to come from the destruction of hundreds of homes and businesses.
This is, in a darkly unsettling way, a windfall. And some elected officials seem to be treating it as such. According to CBS Colorado, the state’s House Appropriations Committee even went so far as to gut an amendment that would have waived its share of use taxes for fire victims, claiming that the amendment would have negatively impacted the budget.
No one should be budgeting to profit off the destruction of people’s homes.
We should be budgeting to help our neighbors.
It is past time that Louisville, Boulder County, Colorado and RTD follow Superior’s lead. Taxes — from use to sales to property — should be used to uplift our communities and help those in need. And right now, as in most cases, the best way to uplift our community is to help those in need. This means the best way to apply the use taxes being collected from the Marshall Fire victims is to offer a rebate. After all, we are one community — so let’s share the burden.