Sidebar by Ed Quillen
Water – October 2003 – Colorado Central Magazine
In essence, it’s a sales tax that isn’t collected at the point of sale, and Chaffee County voters will decide about a use tax on motor vehicles at this election.
Let’s suppose you live in Chaffee County and buy a used pickup off of a local lot for $4,000. You would pay state sales tax, as well as the county’s 2% sales tax, which works out to $80.
If you bought that same pickup for the same price in, say, Pueblo, you wouldn’t have to pay $80 in Chaffee County sales tax, although you’d still pay state sales tax because the transaction occurred in Colorado.
But if the use tax passes, you would have to pay Chaffee County, too. You (or the lender if you borrowed part of the purchase price) would have to pay the use tax when you registered the vehicle: no tax to the county would mean no license plates from the county clerk.
Suppose it’s a private cash sale for this hypothetical used pickup, and the seller gives you a receipt for only $1,000. And that’s what you tell the clerk’s office that you paid, thereby reducing your county sales tax from $80 to $20. Some counties look up the Blue Book price for the vehicle, and apply the use tax to that, rather than what’s on the receipt. But Chaffee County won’t do it that way, according to County Clerk Joyce Reno.
“Generally, we don’t argue about the claimed price when somebody comes in for license plates,” she said, “although it has to pass the ‘laugh test.’ If somebody says he paid only $500 for a 2001 car in running condition, we’d be curious.”
Several years ago, county voters turned down a use tax on construction materials to build a new jail.
Why look at vehicles and construction materials for a use tax? Because they involve transactions that the county can keep track of. Building materials are connected to building permits, which the county issues. Vehicles have to be registered at the courthouse, so the county knows when you’ve bought one.
In theory, anything where sales tax applies could also fall under a use tax if voters approved, but the county has no easy way to keep track of computers, books, tools, and other items which are often purchased outside of the county by local residents.
Reno estimated that a use tax on motor vehicles purchased outside of Chaffee County but registered to county residents would produce about $500,000 a year.
— Ed Quillen
