Aspenites offered annual rebate on disputed food tax |

Aspenites offered annual rebate on disputed food tax

John Colson

It’s time once again for Aspen residents to get a little bit of cash back from their city government.Between now and April 15, officials at Aspen’s City Hall are accepting applications from city residents who qualify for the city’s 30-year-old food-tax refund policy.The embattled policy remains in place, despite a lawsuit filed by nonresidents who claim the tax is illegal.The lawsuit, filed by Steven A. Martino of Mobile, Ala.; Jon Ronay of Basalt; and Martha L. Sommers Ronay of Basalt, has not seen a lot of activity recently, according to City Attorney John Worcester.But the refund policy is being continued until a judge gets a chance to rule on the suit.This year’s refund is $50 and to be eligible, a person must be able to prove that he or she lived in the city of Aspen for the entire 1999 calendar year.Applications are available at City Hall, and refunds will be paid to every eligible resident of the city. According to city officials, there were more than 1,800 applications filed for 1998. The city’s finance department sent out a total of 2,962 of the $50 payments last year, including extra amounts for children, senior citizens and the blind.The food-tax rebate program, which began in 1970 as an enticement to get voters to pass a sales tax, has for 30 years offered Aspen residents a bit of relief from the city’s food tax. To qualify, a resident must live in Aspen for an entire year and apply for a rebate by April 15 of the following year.The sales tax passed by the voters in 1970, known as the “sixth penny,” was to raise money for the city’s parks and open space fund. In 1972, voters were asked to pass a “seventh penny” tax for a newly created “transportation/mall fund,” and the rebate was increased to win voter approval of the new tax.According to a history of the tax, compiled by the finance department, it originally offered a rebate of $7 per person per year, which was raised to $21 in 1972 and to $39 in 1981. The refund was raised to $50 in 1999.The rationale behind the program was recognition of the fact that many municipalities do not collect sales taxes on food items, and to offer a rebate to city residents already strapped by the high cost of living in Aspen.The city also offers a separate rebate to local senior citizens.The lawsuit against the refund policy was filed last year on behalf of “all nonresident persons of the city of Aspen subjected to the discriminatory sales tax of the city of Aspen,” according to the documents received at City Hall.The suit admits that the number of the “members of the class” cannot be known, “but it is estimated that there are thousands of members of the class.”Claiming the “members of the class” have been “unconstitutionally denied access to a refund,” the suit argues that the relevant city codes “arbitrarily and capriciously discriminate” against nonresidents who buy goods in Aspen and pay the sales taxes. The suit also cites the “equal protection clause of the Constitution of the United States” and other portions of the Constitution as forbidding such taxes.Attorney Ted Trauernicht of Denver, representing the Ronays, said last year that the purpose of the suit is to erase “an unjust enrichment for Aspen residents,” although he conceded that $50 per person per year is “not a lot of money.”But, he said, “It creates a constitutional issue of unfair taxation.”Trauernicht indicated that the suit originated as a complaint from the Mobile, Ala., resident. He said the Sharbrough law firm from Mobile contacted his office, Futro & Trauernicht of Denver, about filing the lawsuit, and that his office had been talking with the Ronays about the fairness of the tax.Worcester said his office and the attorneys behind the suit have gone through some of the “discovery” process, in which the two sides reveal certain aspects of their respective cases, including witness lists.But beyond that, Worcester said, the case has not been very active.

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