Less than a week after sending a notice to Colorado liquor license holders that annual fees would be going up because of lost revenue during the coronavirus pandemic, the Liquor Enforcement Division of the Colorado Department of Revenue reversed its decision.
The original notice stated that "The LED has been experiencing a drastic reduction in the amount of fees collected due to the pandemic, and this fee adjustment is necessary in order to maintain operations and our current levels of productivity and responsiveness."
The intention, according to the LED, was to raise "application fees and certain other fees" beginning July 1, 2020 — just a couple of days after the announcement went out — but now that won't happen.
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Here's the new decision from the department, which was sent out on July 1:
Dear Liquor Stakeholders and Clerks,
The Liquor Enforcement Division (LED) is postponing the fee increase that was originally scheduled for July 1, 2020. Due to a number of factors, we have seen a substantial decrease in both new liquor license applications and renewals over the past several months. We are carefully monitoring the as of yet unknown influence of Executive Order 20-123 (Safer at Home and in the Vast, Great Outdoors) on various sectors of the liquor industry, and critically analyzing the effects of various other Executive and Public Health orders on our budgetary and operational needs. The Division is funded through a cash fund mechanism that is tied directly to these new and renewal applications, and we are statutorily mandated to keep our reserves at or below 16.5%. A fee increase is necessary in order to maintain our reserves at the necessary level and sustain LED’s operations at the current level that we strive to provide.
We would like to assure you that LED is ever mindful of the financial and business constraints that the COVID-19 pandemic has had on the liquor industry, as well as the effect the associated decrease in applications has had on our budgetary operations. We are working hard to provide meaningful relief to our stakeholders at every opportunity. We will keep you informed as to when the fee increase will be occurring as soon as we have a definitive date. Thank you for your continued support and partnership.
Colorado Liquor Enforcement Division
Chris Zacher, captain of Colorado's branch of the National Independent Venue Association and executive director of Levitt Pavilion Denver, says that lobbyists with NIVA are working with state legislators to push fee increases further down the road. But in the meantime, he notes, the postponement of scheduled hikes offers a little relief for bars, clubs and music venues (those establishments that don't serve food or haven't arranged to offer outside food under current coronavirus guidelines) that were ordered to close again on June 30, after being allowed to open at limited capacity only two weeks earlier.
While the dollar amount of the increases likely wouldn't have been make-or-break money for most bars, the message from the state felt "tone deaf," according to Zacher and others representing businesses trying to stay afloat. Now that message has at least shifted to one of understanding and cooperation.