Taxpayers’ group claims 20-cent fee on paper bags is a tax
An anti-tax group is suing the city of Aspen over its plastic bag ban, asserting that the policy’s 20-cent fee on paper bags at the grocery store is a tax, and violates a state law requiring voter approval of all tax increases.
The suit was filed Tuesday in Pitkin County District Court by the Mountain States Legal Foundation on behalf of the plaintiffs, the Colorado Union of Taxpayers Foundation.
Aspen City Council in September 2011 passed legislation instituting a ban on plastic bags handed out by grocers at check out, and a 20-cent fee for paper bags, in an attempt to get people to bring reusable bags to the store.
The policy took effect May 1 and only applies to grocery stores. Carbondale passed a similar policy, and put it to an April voter referendum, which passed.
The lawsuit says the 20-cent charge on paper bags is a tax because “grocers must remit the proceeds to the city” and “the bag tax revenue funds the general expenses of government, including ... public education campaigns, infrastructure, pollution reduction equipment and community clean-up events.”
The city violated the Colorado Taxpayer’s Bill of Rights (TABOR) because it did not seek voter approval for the bag tax, the lawsuit says. TABOR requires voter approval of all tax increases.
The suit seeks “declaratory and permanent injunctive relief against continued enforcement and maintenance of the bag tax,” as well as a refund of all government-collected proceeds since the policy took effect. It’s unknown how much the city has collected from grocery stores that charge for paper bags.
“Colorado Union of Taxpayers members have been forced to pay the bag tax,” the lawsuit adds.
Aspen City Attorney Jim True said city officials investigated whether the bag fee qualified as a tax, and found that it did not. Proceeds from the 20-cent fee do not go into the city’s general fund, and must be used for specific waste reduction purposes, he said.
Jim Manley, an attorney with the Lakewood-based Mountain States Legal Foundation, said the city government is playing a “semantic game.”
“They’re calling it a fee and collecting it as a tax,” he said.
Mayor Mick Ireland said the plaintiffs are engaging in “typical obstruction of any progressive action by a municipality.”
“I think we are within our rights to charge a fee to regulate a nuisance, which plastic bags are,” Ireland said. He added that unlike a tax, raising revenue is not the point of the bag ban and fee.
“If we don’t collect any money, we would reach our aims,” he said.