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The Ralph L. Carr Colorado Judicial Center in downtown Denver is the home of the Colorado Supreme Court, the state Court of Appeals and the office of the state attorney general.

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The National Federation of Independent Business said its state Supreme Court case has exposed licensing fees for what they are: Taxes.

And as taxes, they should be covered by the state constitutional Taxpayer's Bill of Rights, meaning the government can't raise them without a vote of the people.

The five-year-old lawsuit was heard by the state's high court Tuesday.

"We are confident in our position in this case and are anxiously awaiting the court’s decision," Serena Woods, spokesperson for the Colorado Secretary of State's Office, said Tuesday afternoon.

A win for the NFIB could put Colorado's governing funds in a bind. Since taxpayers rarely approve new taxes on the statewide ballot, state government often turns to fees to pay its bills.

Voters this November are set to change TABOR, allowing the state to keep refunds when tax revenue exceeds the provision state spending cap.

Another proposed ballot question would eliminate TABOR completely.

“Colorado’s small-business owners should not be the honeypot for the secretary of state and the non-business programs it administers, like statewide elections,” Karen Harned, executive director of the NFIB Small Business Legal Center, said in a statement after Tuesday's hearing.

NFIB filed the suit in 2014, alleging the secretary of state's office was collecting about $20 million a year in fees, far more than the cost to provide the service.

NFIB appealed the case to the state Supreme Court in 2017. Then-Secretary of State Wayne Williams also filed a request for a high-court ruling, noting the office had the “authority to charge business filing fees long before TABOR” was put in the state Constitution by voters in 1992.

The case was first heard in a Denver District Court in 2014, which dismissed NFIB’s suit. It was later taken up by the Court of Appeals for further review. The Court of Appeals held that the case was improperly dismissed, but nonetheless declined to rule on the fundamental tax question at issue.

“The Department collects over $20 million annually from these charges,” according to NFIB’s lawsuit “However, only a small portion of that revenue is used to cover the Department’s costs in collecting and managing these filings. Instead, the vast majority of the revenue – as much as 90% -- is used to fund other unrelated functions within the Department, most notably coordinating state elections and directly funding some local elections … these ‘fees’ are in reality a tax – money raised and spent for the general expenses of government. And, as such, the Colorado Constitution … requires that voters authorize this tax. Because no such approval was obtained, the charge amounts beyond that necessary to cover the costs of managing the business filings, along with their authorizing statutes are unconstitutional.”

The case was previously captioned as NFIB v. Gessler and, more recently, Wayne W. Williams v. National Federation of Independent Business. But the defendant’s name has changed to reflect the current Colorado secretary of state, Jenna Griswold, who took office in January.

Contact Joey Bunch at joey.bunch@coloradopolitics.com or follow him on Twitter @joeybunch.

Colorado Politics senior political reporter

Joey Bunch is the senior correspondent and deputy managing editor of Colorado Politics. His 32-year career includes the last 16 in Colorado. He was part of the Denver Post team that won the Pulitzer Prize in 2013 and he is a two-time finalist.

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