Department of Finance
Reference: Tax and licensing code updates
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Catrina Asher, Finance Director
Ana LeScoezec, Revenue Manager
Date Prepared: October 20, 2022
PURPOSE
To provide City Council with recommended updates to the tax and licensing code that will ensure consistency and allow for more flexibility to better serve the business community.
STRATEGIC FOCUS AREAS
- Financially Responsible
- Strong Regional Relationships and Partnerships
BACKGROUND
The City of Brighton is in the process of transitioning to a new tax and licensing system that will allow businesses to apply for licenses online and for taxpayers to file electronically. This system will also integrate with the State of Colorado's Sales and Use Tax System (SUTS). As part of the transition process City staff has reviewed the tax and licensing code and has identified several areas where updates or clarification is needed to better serve the business community.
In addition, the Colorado General Assembly recently passed a new retail delivery fee as well as a carryout bag fee, both of which would be taxable under the City's current Code. City staff is addressing the taxability of these new fees as part of these proposed updates.
RECOMMENDED TAX AND LICENSING CODE CHANGES
Colorado delivery fee and carryout bag fee
The Colorado retail delivery ($0.27 per delivery) as well the carryout bag fee ($0.10 per plastic bag) are not expected to generate a significant amount of revenue for the City of Brighton. The retail delivery fee became effective July 1, 2022, and the carryout bag fee is effective January 1, 2023. Since these fees are new, the City has not received any significant amount of tax revenue from these fees. Additionally, sales tax generated from these fees is expected to be very small ($0.01 per delivery fee and $0.004 per bag fee). City staff recommends adding an exemption...
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