Denver Direct: Pay a Fee to Register to Pay a Tax? No Thanks, I'll OPT Out

In his never ending search for additional tax revenue, Mayor Hickenlooper has invented a new fee. If you want to pay the so-called Occupational Privilege Tax (OPT), you will have to pay a registration fee first to then pay a tax for the privilege of working in Denver. (Hickenlooper himself called the fee "crazy" and the tax "wrong-headed" on the Mike Rosen show.)

Council to mull fee cut

Bill would reduce OPT fee in half for small business owners

Gene Davis, DDN Staff Writer

Monday, May 17, 2010

The Denver City Council today will consider a bill that would reduce a fee the city placed on Denver’s smallest business owners.

The council bill would reduce by half the $50 biennial registration fee one-person business owners now have to pay the city to process their occupational privilege tax (OPT). The bill comes after small business owners protested having to pay the same flat registration fee as large corporations.

The measure up for consideration this evening would allow the estimated 7,000 one-person businesses in Denver to pay a $25 OPT registration fee every other year.

One of those small business owners who would have their fee cut in half is Gerald Trumbule. Trumbule believes the proposed bill is a step in the right direction, though he remains opposed to the idea of having to pay any kind of a fee for the city to process a tax. “If they need to raise the tax for the privilege of working in Denver, then let’s do that,” he said.

The OPT requires employers to annually pay the city $48 for every worker they employ. When trying to generate extra revenue for the city this year, Mayor John Hickenlooper told his budget department to only consider raising fees in areas that hadn’t been raised in a while. The OPT has not been raised since 1983, and any attempt to raise the tax would have to go through the voters because of the Taxpayer’s Bill of Rights.

But after Hickenlooper’s administration implemented the OPT registration fee and small business owners objected to having to pay the same amount as large corporations, the mayor and gubernatorial candidate promised on the Mike Rosen Show in March to look into the issue. “I went to the revenue folks and said, ‘Why are the little guys paying the same thing that the large guys are?” he said on the following Mike Rosen Show that aired last month. “They went back and said, ‘Well, it looks like you’re right.’”

Denver City Councilwoman Jeanne Faatz responded in March by saying she was shocked that Hickenlooper seemingly didn’t fully understand a budget measure that was pushed by his administration.

“It never occurred to me that he did not know about it or understand it or anything like this,” she said. “I’m beginning to think that any fee increase like this, perhaps (Hickenlooper) should come and present himself so we’re absolutely sure that everybody is in sync here.”

Around the same time that Hickenlooper promised to move quickly on the flat OPT registration fee, Denver City Councilwomen Jeanne Robb and Faatz approached Hickenlooper about the issue, Robb said.

Faatz, who opposes the OPT fee in general, said Hickenlooper’s decision to cut the registration fee in half for a one-person business is a “small step in the right direction.” “It is an improvement over what it was,” she said last month.

Meanwhile, Trumbule is considering disbanding his largely inactive one-person business because he doesn’t want to deal with the hassle of having to pay an extra fee. He believes that some of the estimated 7,000 one-person business owners that aren’t generating much revenue might do the same.