Colorado law requires businesses to start collecting bag fees
Consumers should expect a small increase in costs when going to the grocery store and certain restaurants and retail establishments in 2023.
Beginning New Year’s Day through January 1, 2024, stores and retail food establishments with more than three locations will be mandated to charge a fee of 10 cents for each recycled paper carryout bag or single-use plastic carryout bag due to a law passed in 2021 by the Colorado General Assembly, HB House Bill 21-1162. Then, on New Year’s Day 2024, the same establishments can only provide recyclable paper bags for the 10 cent fee.
This legislation is intended to curtail and ultimately end the use of non-biodegradable bags that are widely considered to be harmful to the environment.
Each store or restaurant with more than three locations will collect the 10 cent per-bag fee, retaining 40% of the revenue, and the municipality or county in which the retailer conducts business is set to receive the remaining 60% of that revenue.
Mike Farina, finance director for The City of Castle Pines, said he has been tracking the rollout of the new law for about six months and has paid close attention to discussions among cities and counties about the requirements. The Castle Pines City Council passed an ordinance in August exempting the bag fee from sales and use tax, as many other surrounding cities have done.
“Part of the discussion was about keeping in line with what cities were doing and staying consistent with sales tax collection with cities that were talking about this,” Farina said.
Farina expects the city to collect between $30,000 and $50,000 in revenue each year from its share of the bag fee, for which there is no opportunity to opt out. City leaders have not yet decided how to direct the funds, which will be collected from businesses on a quarterly basis.
Several cities in Colorado, such as Denver and Telluride, have already instituted a bag fee collection in recent years, with some putting restrictions on how the revenue can be used.
The City will soon begin discussions with businesses about the new requirement. It will affect companies differently, with some of them, like major chains, not eligible for an exemption, Farina said.
The carryout bag fee does not apply to customers who provide evidence to the establishment that they are a participant in a federal or state food assistance program. The law also does not apply to materials used in the packaging of pharmaceutical drugs, medical devices or dietary supplements, according to the state’s website.
Douglas County created a web page for consumers and business owners to learn more details, and the City is considering doing the same.
For more information, visit the Douglas County resource page at https://www.douglas.co.us/finance/carryout-bag-fee/ or the state’s webpage at https://tax.colorado.gov/carryout-bag-fee.
By Chris Michlewicz; photo courtesy of Douglas County
