Colo. miners dispute Suthers' logic on coal-tax changes

Legal News Line Oct. 4, 2007, 9:00am

John Suthers

DENVER -- Colorado's powerful coal lobby is trying to stop the unfreezing of a coal tax rate that was supported in summer by Attorney General John Suthers. Suthers wrote in July (opinion# 07-07) in an opinion request from the Colorado Department of Revenue (DoR) that a former DoR head did not have authority to apply provisions of the Taxpayers Bill of Rights (TABOR) to coal severance taxes. The rate has stayed frozen since 1993. Coal industry representatives this week lobbied DoR officials to drop the plan, arguing it could significantly increase their tax burden. The general manager of the ColoWyo coal mine, Colorado's largest, said any tax rise would "negatively impact Colowyo's ability to market and sell its coal." Suthers' opinion argued that the coal severance tax rate was set by statute with a mandate to alter the rate based on producer prices. "[Vo]ter approval is not required prior to [the DoR] calculating and assessing the coal severance tax as required by law," Suthers wrote. In future, he added, DoR should "calculate the current coal tax rate using the increase or decrease in the index of producers' prices based on...January, 1978." Colorado Mining Association (CMA) President Stuart A Sanderson disagreed, arguing TABOR supersedes all other tax statutes and can only be altered by referendum. But Suthers' representative did not question Sanderson on his charges. "Unfortunately, the Attorney General has chosen not to engage in a dialogue here today over some legal arguments and questions," Sanderson said. "There are substantial questions about the opinion's validity. Colorado has 10 coal mines and coal accounts for 26 percent of the state's electricity.

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