Chronos Builders, LLC v. Department of Labor.

2022 CO 29. No. 22SC78. Taxpayer’s Bill of Rights—Constitutional Interpretation.

June 21, 2022

The Paid Family and Medical Leave Insurance Act (Act) authorizes the Division of Family Medical Leave Insurance (Division) to collect a premium from employers and employees to fund a state-run paid family and medical leave insurance program. The premium is calculated as a percentage of an employee’s taxable wages. The Supreme Court reviewed whether the Division’s collection of such a premium is unconstitutional under section (8)(a) of the Taxpayer’s Bill of Rights, which provides that “[a]ny income tax law change . . . shall also require all taxable net income to be taxed at one rate, . . . with no added tax or surcharge.” The Court held that this language of section (8)(a) precludes only added taxes and comparable tax-like surcharges to taxable net income imposed in connection with a change to income tax law. Because the Act is not an income tax law, and because in any event, the premium collected is a fee and not an impermissible added tax or tax-like surcharge, the Division’s collection of the premium does not violate section (8)(a).

The Court affirmed the district court’s order granting a motion to dismiss for failure to state a claim.