Dolores County is proposing two tax questions in the Nov. 8 ballot. Pictured is Dove Creek, the county seat. (Photo from newspaper file)

The sales tax would offset oil and gas revenues; tenant tax would go to tourism and support housing and childcare

Dolores County will ask voters for a 2.9 percent sales tax and a 2 percent tenant tax in the Nov. 8 general election.

The proposed sales tax would apply countywide and apply to the same goods as state sales tax, plus the same state exemptions.

The tax would be levied on general purchases ranging from restaurant meals, fuel and vehicles to clothing, alcohol, household goods, hardware, building materials, ready-to-eat foods and more. It also applies to purchases made online.

Sales tax exemptions include farm 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 the 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 has no sales tax.

According to a tax brochure on its website, the county is asking for the sales tax to offset declining revenue from the depressed oil and gas industry, which accounts for 62% of the county’s tax base. Funding is used for government operations and public services.

A sales tax proposed by Dolores County would bring revenue to non-local hunters. (log file)

A proposed sales tax in Dolores County would capture revenue from purchases made by recreational users in the county. (Photo from newspaper file)

The tax is also seen as a way to collect taxes on tourism, non-local hunters, recreational users, and travelers transacting business in the county.

“We have seen a steady downward spiral in oil and gas revenues. A sales tax is a way to offset that by collecting revenue from tourists and travelers who use our roads and services,” Dolores County Commissioner Julie Kibel said in an interview Wednesday with The newspaper. “We’re not asking this because we’ve overspent, it’s because our primary source of operating revenue continues to decline and we want to avoid cutting long-term services.

A sales tax collects revenue from the general public, rather than relying solely on property taxes, she said.

Collecting a sales tax on in-store purchases as well as online purchases should be able to replace revenue lost from the decline of the oil and gas industry, the county’s tax pamphlet says.

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 throughout the county, including Dove Creek and Rico.

In a community letter Regarding the tax proposal, Dolores County Commissioners said that between 2015 and 2021, the county lost $1.6 million in tax revenue due to reduced oil and gas production.

“We have already been advised by our appraiser’s office that we will lose an additional $10-13 million in our assessed value this year to oil and gas,” the letter said. “The thought process behind a sales tax is that it taps into the tourism industry, online sales, non-local hunters, leisure users, people traveling through commercial transactions, businesses built in outside the city limits of Dove Creek, and the tax burden is not fair to our local Dolores County residents.

The county said sales tax revenue would go to the county general fund and departments that have lost operating revenue since 2015.

Additional revenue would be used to support county operations in general, including county commissioners, administrative offices, county attorney, clerk and recorder, elections, treasurer, assessor, maintenance of Buildings, District Attorney, Sheriff, Deputy Sheriff, Jail, Coroner, Emergency Management, Mapping and Addressing, CSU Agricultural Extension, Dolores County Television, Veterans Affairs, Dolores County Fair, Health Public, Roads and Bridges, Senior Services, Dove’s Nest, Rico Center, Dove Creek Schools and Special Districts.

“It has been suggested that we make cuts in these departments. It would only lay off people and cut off much-needed services provided by the county,” the letter from the community said. “You can’t sustain growth if that’s the business approach that’s taken.”

Of Colorado’s 64 counties, 10 have no county sales tax.

According to county research, seven of these counties have viable oil and gas property tax revenues due to high production.

The other three counties, including Dolores County, are experiencing declining oil and gas production and revenue and are therefore considering a county sales tax to offset lost revenue.

“We need to start investing in Dolores County,” the county’s tax pamphlet reads. “Dolores County is a beautiful and growing place, which will bring additional revenue as well as expenses.”

Proposed tourist tax

Dolores County will also ask voters in November to decide whether to implement a 2% tax on renters.

Tenant tax would be charged for any short-term rentals of less than 30 consecutive days, including hotel rooms, bed and breakfasts, RV parks, and vacation homes.

Revenue collected from tenant tax would generate $234,250 a year, according to the wording of the ballot.

Tax revenue collected from lodging would be earmarked specifically for marketing tourism in the county, childcare and affordable housing for local workers and improving the visitor experience.

The county tenant tax would be limited to the unincorporated areas of Dolores County and Dove Creek. It would not apply to the city of Rico, which already has a tax on tenants.

Previously, tenant taxes could only be used for tourism marketing, but Bill 22-1117 allows the tax to also be earmarked for affordable housing projects for local workers, child care children and spending to improve the visitor experience.

According to the wording of the lodging tax vote, if passed, 10% of the tax revenue generated would go to local tourism advertising and marketing; 30% would be used to meet the housing and childcare needs of the tourism-related workforce and other community workers; and 60% would go towards improving the visitor experience, which would include funding for road maintenance, emergency services, signage development, trails and trailheads.

The county has held monthly sales tax forums in person and via Zoom to educate the public about tax proposals in the Nov. 8 ballot.

For more information on both voting questions, visit the Dolores County website at dolocnty.colorado.gov

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