Governments ponder the deferring of tax payments

Expecting tax revenue losses for the year

By Mark Reaman, Kendra Walker, Katherine Nettles

In an effort to assist local businesses hit hard by the coronavirus pandemic, the county and local municipalities are considering ways to defer certain tax payments.

The town of Crested Butte will be allowing local businesses to defer their sales tax payments due in a couple of days. Town manager Dara MacDonald said she and finance director Rob Zillioux are informing businesses that February sales tax due in March can be put off until April. The hope is to give at least a small cash flow boost to businesses that aren’t even allowed to be open.

“It buys some time and hopefully gives some relief to small businesses struck by this coronavirus outbreak that has shut many businesses down,” MacDonald explained to the Town Council during the Monday, March 16 meeting.

MacDonald said she also sent an email to Amazon asking them to not prioritize their deliveries to the Crested Butte post office and instead use carriers like UPS and FedEx that deliver directly to people’s homes. She said a response was received that the mega-corporation will try to do that. Staff is also starting to relook at the 2020 budget. Some trimming is inevitable.

The council will hold a special meeting on March 30 to consider other relief options. Its next regular meeting is scheduled for April 6.

Mt. Crested Butte gathering data

The Mt. Crested Butte Town Council held a special meeting March 24 and agreed to discuss during the next regular council meeting on April 7 the potential economic impact of COVID-19 on the town and possible approaches to be put in place. This will allow town staff to gather information and data of estimated tax revenue losses and council to put on its thinking caps before determining certain actions, including whether to defer tax payments or stick with a case-by-case basis.

“I know there’s been some discussion out there about what we can do to help our constituents as we work our way through what’s happening,” said Mt. Crested Butte mayor Janet Farmer.

“I think I’m safe in saying that all of us are very concerned about the health and safety of everyone but also the economic development impacts on the town,” she told council. “We need facts from town staff, estimates on financial impact on town budget and how long we can maintain without being put in financial danger… I think we need a little more time to have a better understanding of what the impacts will be.”

“I think one of the reasons to wait are some of the things we’re talking about depend on what happens nationally,” said council member Nicholas Kempin, referencing potential mortgage and rent forgiveness orders on a national level.

Town manager Joe Fitzpatrick addressed the council on the finances. “Karl [Trujillo] and I have spent quite a bit of time working on the budget. It’s extremely difficult to estimate summer revenues but we’ve taken a stab at it. We project a loss in sales tax revenue of approximately half a million dollars. We’re putting tighter controls on all purchasing and eliminated some things out of the budget.”

One elimination includes summer roadwork, with the exception of work on Gothic Road coming from a different funding pool.

“We just don’t know when we might reopen and we certainly don’t want to reopen and have folks start a new cycle of the virus in the community,” Fitzpatrick concluded. He will be sending council members more information and data detailing projected revenues and budget cuts before their meeting on April 7.

County looking at property taxes

Meanwhile, Gunnison County is taking a cue from state executive orders and suspending or waiving interest on delinquent property taxes through April 20. Any decisions beyond that are yet to be determined. In a meeting with Gunnison County commissioners on March 24, Gunnison County treasurer Debbie Dunbar brought the idea forward.

”I would like to discuss the section on property taxes,” she said, and noted that on March 20, Colorado Governor Polis issued an executive order authorizing county treasurers to suspend or waive  interest that may accrue as a result of delinquent tax payments for the next 30 days.

“I would like to request to a degree that we would—that I would—waive interest on any delinquent payments, which would basically be a first half payment… and agree that we waive any delinquent interest on any payment made between now and April 20. And then if the governor issues another executive order for another 30 days, then we would reassess it…We just want to take it part by part so we can stay on deadlines,” she said.

Dunbar emphasized that fees and interest will once again accrue after April 20, and that if the governor issues another executive order for the period from April 20 to May 20, the county will reevaluate before following suit. “This allows our taxing authorities to get some money through all of this,” she said of payments that will come in without penalty.

The commissioners did not need to authorize this decision, but commissioner John Messner expressed his support. County manager Matthew Birnie called it a “good, balanced approach” as well.

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