Dolores County will ask voters for a 2.9% sales tax and 2% lodgers tax in the Nov. 8 general election.
The proposed sales tax would be countywide and apply to the same goods as the state sales tax, plus have the same state exemptions.
The tax would be collected on general purchases ranging from restaurant meals, fuel and vehicles to clothing, alcohol, household goods, hardware, construction materials, ready-to-eat foods and more. It also applies to purchases made online.
Exemptions to the sales tax include agricultural equipment, supplies and livestock; groceries purchased for consumption at home; food purchases with food stamps; gas and electricity and fuels for residential use; sales for benefit of schools; charitable organizations; and other exemptions.
Based on state data, in 2021, a 2.9% county sales tax in Dolores County would have generated $924,187 in government revenue. Currently, the county does not have a sales tax.
According to a tax brochure on its website, the county is requesting the sales tax to offset declining revenues from the depressed oil and gas industry, which makes up 62% of the county tax base. The funding is relied on for government operations and public services.
The tax also is seen as a way to capture taxes from tourism, nonlocal hunters, recreation users and travelers conducting business transactions in the county.
“We have had a steady downward spiral in oil and gas revenues. A sales tax is a way to offset that by collecting revenues from tourists and travelers who use our roads and services,” said Dolores County Commissioner Julie Kibel in an interview Wednesday with The Journal. “We’re not asking for this because we overspent, it is because our main source of operating revenues keeps dropping, and we want to avoid making cuts to services in the long term.”
A sales tax allows revenues to be collected from the wider public, rather than only relying on property taxes, she said.
Collecting a sales tax from store purchases as well as online purchases should be able to replace revenues lost from the declining oil and gas industry, the county tax brochure states.
In 2021, Dolores County businesses generated $12.9 million in taxable sales. Online purchases for the same year generated $18.9 million.
The sales tax would apply to stores and online purchases in the entire county, including Dove Creek and Rico.
In a community letter about the tax proposal, Dolores County commissioners stated that from 2015 to 2021, the county has lost $1.6 million in tax revenues from reduced oil and gas production.
“We have already been notified by our Assessor’s Office that we will lose another $10 million to $13 million dollars in our assessed value this year from oil and gas,” the letter states. “The thought process behind a sales tax is it taps into the tourism industry, online sales, nonlocal hunters, recreation users, individuals traveling through doing business transactions, businesses being built outside of Dove Creek city limits, and the burden of the tax is not just to our local Dolores County residents.”
The county stated the sales tax revenues would go toward the county general fund and departments that have lost operating revenues since 2015.
The additional revenues would go toward supporting county operations in general, including county commissioners, administrative offices, county attorney, the clerk and recorder, elections, treasurer, assessor, maintenance of buildings, district attorney, sheriff, undersheriff, jail, coroner, emergency management, mapping and addressing, CSU Agricultural Extension, Dolores County Television, veterans, Dolores County fair, public health, road and bridge, senior services, Dove’s Nest, Rico Center, Dove Creek schools and special districts.
“It has been suggested that we make cuts in these departments. This would only lead to laying people off and cutting the much-needed services provided by the county,” the community letter states. “You cannot sustain growth if this is the business approach that is taken.”
Of the 64 counties in Colorado, 10 do not have county sales tax.
According to county research, seven of those counties have viable oil and gas property tax revenues because of high production.
The other three counties, including Dolores County, are seeing a drop in oil and gas production and revenues and are therefore considering a county sales tax to offset the revenue losses.
“We need to start investing in Dolores County,” the county tax brochure states. “Dolores County is a beautiful place and is growing, which will bring added revenue as well as expense.”
Dolores County also will ask voters in November to decide on implementing a 2% lodgers tax.
The lodgers tax would be charged for any short-term rentals less than 30 consecutive days, including hotel rooms, bed-and-breakfasts, RV parks and vacation homes.
Collected revenues from the lodger’s tax would generate $234,250 annually, according to ballot language.
The collected tax revenues from lodging would be earmarked specifically to provide for marketing of tourism to the county, child care and affordable housing for local workers and for enhancing the visitor’s experience.
The county lodger’s tax would be limited to unincorporated areas of Dolores County and Dove Creek. It would not apply to the town of Rico, which already has a lodgers tax.
Previously, lodgers taxes could be used only for marketing tourism, but House Bill 22-1117 allows the tax to also go toward affordable housing projects for local workers, child care and expenditures to enhance visitors’ experience.
According to the lodging tax ballot language, if passed, 10% of the tax revenues generated would go toward advertising and marketing of local tourism; 30% would be used toward housing needs and child care for the tourism-related workforce and other workers in the community; and 60% would go toward enhancement of the visitor’s experience, which would include funding of road maintenance, emergency services, development of signage, trails and trailheads.
The county has held monthly sales tax forums both in person and via Zoom to educate the public about the tax proposals on the Nov. 8 ballot.
For more information on both ballot questions, visit the Dolores County website at dolocnty.colorado.gov