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Why the 27-cent delivery fee is actually 28 cents in certain parts of Colorado

Turns out Colorado's month-old 27-cent delivery fee also gets taxed, and it is not the only one.

DENVER — Colorado has a long history of debating whether or not a fee is a tax.

The Taxpayer Bill of Rights (TABOR) requires voters to approve every new tax increase.

Lawmakers came up with fees that do not need your approval.

Like the month-old 27-cent delivery fee.

It turns out that fee also gets taxed.

And it is not the only one.

"We have found a couple of other fees," said Aurora City Councilman Dustin Zvonek.

Zvonek first brought up the discovery that the delivery fee is added into the total purchase price before tax is calculated. That means the fee gets taxed.

"I don't think that this tax on a fee is defensible. You're not taxing a service, you're not taxing a product, you're taxing a government fee," said Zvonek.

RELATED: How your income impacts your overall TABOR refund

RELATED: Confusion, frustration over Colorado's 27 cent retail delivery fee

And he found out that the city has one other fee, and an upcoming fee, that could be taxed as well.

"There's another fee that we pay for waste tires. So, when you get a new set of tires, you pay a fee for, basically, recycling your old tire. That fee is subject to sales tax," said Zvonek. "The tax on the waste tire fee is about $10,000 a year."

He has a proposal in front of Aurora city council's study session on Monday night that would exempt government fees from the city sales tax.

The city of Denver has a similar proposal, but only to exempt the delivery fee and bag fee from being taxed.

"We want to respect the intent of that [bag] fee, but we recognize that taxing the fee is not part of the intention," said Denver Department of Finance Communications Director Kiki Turner.

Denver's bag fee, which went into effect in July 2021, charges 10 cents for a paper or plastic bag. Of that, four cents stay with the retailer and the other six cents goes back to the city.

Denver sold 28 million bags in the last year. For every six cents that Denver gets, that totaled $1.7 million. The city does not know if every retailer taxed the fee, but if they did, that would have brought in an extra $81,000 to the general fund.

RELATED: This is how Denver uses money earned from its 10-cent bag fee

"It also was looping in the fee into the total purchase price which was being taxed," said Turner.

She said that based on the math, the city believes that for every bag purchased, a customer is paying an extra half cent, and for every delivery, the consumer is paying an extra penny.

Denver's proposal to change the tax policy has its first hearing on Tuesday and will take at least three weeks to go through city council.

Self-collecting home rule municipalities are the areas that might be taxing the fees. These are cities and towns that collect their own city sales taxes.

Here are the 69 self-collecting home rule municipalities:

1. Arvada

2. Aspen

3. Aurora

4. Avon

5. Black Hawk

6. Boulder

7. Breckenridge

8. Brighton

9. Broomfield

10. Carbondale

11. Castle Rock

12. Castle Pines

13. Centennial

14. Central City

15. Cherry Hills Village

16. Colorado Springs

17. Commerce City

18. Cortez

19. Craig

20. Crested Butte

21. Dacono

22. Delta

23. Denver

24. Durango

25. Edgewater

26. Englewood

27. Evans

28. Federal Heights

29. Fort Collins

30. Frisco

31. Glendale

32. Glenwood Springs

33. Golden

34. Grand Junction

35. Greeley

36. Greenwood Village

37. Gunnison

38. Gypsum

39. Lafayette

40. La Junta

41. Lakewood

42. Lamar

43. Littleton

44. Lone Tree

45. Longmont

46. Louisville

47. Loveland

48. Montrose

49. Mountain Village

50. Mt. Crested Butte

51. Northglenn

52. Parker

53. Pueblo

54. Ridgway

55. Rifle

56. Sheridan

57. Silverthorne

58. Snowmass Village

59. Steamboat Springs

60. Sterling

61. Telluride

62. Thornton

63. Timnath

64. Vail

65. Westminster

66. Wheat Ridge

67. Windsor

68. Winter Park

69. Woodland Park

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