Wednesday, March 2, 2011

Are you paying your Denver OPT Tax and Fee? or are you "hiding in your home"?

If you don't remember the details of my previous stand against paying a newly disquised-as-a-fee tax called the Denver Occupational Priviledge Tax Registraion Fee you should go here first.

I became curious as to how many of the people who have started businesses in Denver are actually registered and paying the tax itself and then also paying the fee on the tax. I called the number on the notice I had received, and spoke (for about 20 mins) with a somewhat irritated lady, who was not used to answering my kind of questions. I learned that:

1. They find new start-ups by sending inspectors to office buildings to look at the directory. My own little building used to get regular visits (when I had a directory on the outside of the building). Inspectors also watch local newspapers, notices, etc.

2. Sales tax license (in which you pay for the privilege of collect tax for the State) and other license applications automatically result in signing up for the OPT tax.

3. They can't be sure what percentage pay because so many new entrepreneurs are "hiding in their homes" and doing their business out of an extra bedroom. Yep, that's actually what she said.

I told her I had met quite a few people who do business in Denver and who had not even heard of the tax. She wanted to know their names.

Further research led me to this Audit from 2010. If you are not into reading audits, here's the take-away:
However, it appears that the Division can enhance its tax collection processes and possibly bring additional revenues into the City. Specifically, the Division does not actively enforce OPT compliance for companies located outside of Denver, but who have employees occasionally working in Denver. Additionally, the Division does not actively audit and collect OPT taxes from all companies operating within Denver and relies on a risk-based methodology focused on auditing companies paying the highest amount of taxes to the City.
In short, The Treasury Division wasn't doing enough to collect the tax. So what is the solution? Institute a "registration" fee to make those who are paying the tax pay more? As then-mayor Hickenlooper said, "That's crazy!".

And that's why I refuse to pay the fee on the tax on a privilege. It's just too damn crazy. There has to be a limit as to how much crazy one will tolerate, and I reached mine.

I said I would keep you informed as the saga unfolds. I have received another notice that the $50 fee is due, and I still haven't paid it. There is no late fee or interest due. I do still pay the tax itself, which comes to $48 dollars a year. My point is that I am obviously already registered because they are accepting my tax payments.

What are they going to do? If they say I can no longer do business in Denver, I will go out of business. Then I won't be paying any business taxes or made-up fees.

Denver, the "business-friendly" city. Stay tuned.


  1. Christian Mannhood10:25 AM

    I pay the OPT for our part time nanny. Signing up for the Denver OPT and Federal Taxes was infinitely easier than getting a CO TaxID, or figuring out the CO Unemployment insurance.