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TABOR keeps Colorado from millions of potential rideshare tax dollars

Posted at 6:45 PM, Mar 02, 2018
and last updated 2018-03-02 21:25:30-05

DENVER — If any service best reflects the new economy, it's app-based services like Uber and Lyft, but unlike old-economy taxicab companies the new ridesharing services aren't taxed the same.

However, that's changing fast. And while an increasing number of cities and states are cashing in on new ridesharing taxes and fees, Colorado can't dip its hands into the tip jar just yet.

Experts blame Colorado's Taxpayer Bill of Rights, commonly known as TABOR, for why passing a new tax hike is more difficult.

"In Colorado, we have to go to a voter approval to raise something like these taxes as fees," said Chris Stiffler, an economist with Colorado Fiscal Institute.

TABOR was passed by voters in 1992 and is an amendment to the state constitution.

Stiffler said lawmakers could pass a fee increase, but that's not a simple solution either.

"There's a limit on how much fees they can raise because TABOR also caps how much revenue the government can get each year," said Stiffler.

Meanwhile, cities like Philadelphia and Chicago are imposing new taxes and fees on the thriving ridesharing industry, generating millions for the municipalities.

The New York Times reports through a 1.4 percent tax, Philadelphia is expected to raise $2.6 million this year for the city's public schools while also generating more than $1 million for enforcement and oversight of the industry.

South Carolina passed a 1 percent tax on ridesharing companies, and it has already brought in more than a million dollars, which cities can choose how to spend.

Uber drivers in Denver do not support the idea of a tax increase and raised concerns about the hike only impacting ridesharing companies and not taxis.

"I can barely pay my bills with what I make — that's all I need is another tax," said Randy, an Uber driver who asked us not use his last name. "I think it's another way to attack the independent contractor. We're already taxed to death anyway."

For now, Colorado is on the sidelines, but economists think at some point something has to give and the bigger question is how the state deals with the TABOR issue down the road.

"We have to pay for our roads. I think people are getting really irritated about that. And I think as more people learn you can't get something for nothing and you have to modernize today's world, I think you could see a fee on Uber in the several few years," said Stiffler.