Guest column: Rifle’s dirty little sales tax secret
Ryan Summerlin July 24, 2013
A lot of the hoopla over the proposed sales tax increase focuses on the size of the tax increase. The larger question shouldn’t be about the sales tax increase, but rather why a recreation center can’t be built with the existing tax base with no change in rates. You see, the dirty little secret about Rifle’s municipal sales tax is that you are paying much more compared to virtually any other city in our state.
Much of the debate I’ve read focuses on the total sales tax rate, which stands at 8.15 percent for a sale in Rifle. That 8.15 percent breaks down as follows: 2.9 percent for the state of Colorado, 1 percent for Garfield County, and the lion’s share of 4.25 percent for the city of Rifle. That’s right, the city collects more of every sales tax dollar than the state of Colorado and Garfield County combined. Well, that’s not so bad, you say, but just like on those late-night infomercials: Wait, there’s more.
It turns out that at 4.25 percent, Rifle beats out 99 percent1 of all municipal sales tax rates in Colorado. Yup, that’s right folks, pick any city in the state and chances are nearly perfect that Rifle will collect more, even much more, of your purchasing power.
Let’s take just a few towns that are around Rifle2:
If you average out these 12 towns, it comes out to 2.07 percent, which means that the city of Rifle, on average, collects double the sales tax per dollar spent than surrounding towns. That’s right, double, even without passing the proposed sales tax. If the sales tax increase passes, Rifle might be nearly the undisputed national king of sales tax rates, surpassing even New York City (4.5 percent). The informed reader may wish to note the following other major metropolitan sales tax rates, all of which are considerably below Rifle’s3:
The facts are clear: Rifle already collects much more of every retail sales dollar than virtually any other municipality in our state and nation. So why are they asking for more money? Take Fruita, for example, with its lovely recreation center. Those enterprising folks are getting it done with what would amount to 40 percent less of each sales tax dollar4. Glenwood Springs is 26 percent less4, and Meeker doesn’t even collect sales tax5 to fund its nice recreation center.
The truth is the city already collects an abundance of your retail dollars spent in Rifle, and funding a recreation center would be possible, but it would mean running the city in a more efficient manner. More like, for example, Fruita or Glenwood Springs or Meeker or … you get the point. I hope.
Informed voters should say no to the proposed tax hike. Rather than voting yes, voters should ask the newly formed City Council to balance the city budget, make prudent cuts where/if necessary, and use the last 1 percent sales tax voters approved in 2005 to fund the recreation center.
Do you remember that last recreation-based sales tax pitch? I think it was “A Penny for the Parks,” a sales tax specifically to fund recreation programs and facilities, parks, trails and open spaces. You see, we have already passed a tax that could be used to fund a recreation center; let’s demand they use that money for what it was intended and not ask for even a three-quarter penny more.
Kevin Rider is an owner of Timberline Sporting Goods in Rifle.
(1) Source: colorado.gov/cms/forms/dor-tax/dr1002.pdf
This shows the municipal tax rate for home rule towns and those that have their sales tax collected by the Colorado Department of Revenue. There are six towns on the list that have municipal tax rates equal to or higher than Rifle. This list, however, is not exhaustive, since it does not include towns that do not have a municipal sales tax. For a more complete list, go to sale-tax.com, which shows all towns that collect some form of sales tax, even if there is no municipal sales tax. The list tallies 558 towns. Therefore, 100 – ((7/558) * 100) = 98.74 percent, or 99 percent rounding up.
(2) These rates are taken from source 1 or the municipality or county websites where the town resides.
(3) These are taken from the respective municipality website.
(4) If passed, the new city sales tax for Rifle would be 5 percent. Therefore, for Fruita: (.03 – .05)/.05 * 100 = –40 percent and for Glenwood Springs: (.037 – .05)/.05 * 100 = –26 percent.
(5) This article compares municipal sales tax rates, not total sales tax rates. The analysis is intended to be an “apples-to-apples” comparison of how much each individual town takes from a sale for its own uses. A purchase in a town with zero municipal sales tax will still have state and possibly county sales taxes. For example, while the city of Meeker charges no sales tax, Rio Blanco County takes 3.6 percent and the state of Colorado takes 2.9 percent. So a purchase in a store in Meeker is subject to 6.5 percent sales tax, although none of those collected taxes go directly to the city of Meeker.