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Marshall Fire To Generate $20 Million In Tax Revenue As Homeowners Skimp: 'Cobbling Together Dollar By Dollar'

BOULDER COUNTY, Colo. (CBS4) - As Marshall Fire victims struggle to scrape together enough money to rebuild, the state, Boulder County, City of Louisville and RTD will all see a tax windfall from the disaster. Together, they will receive some $20 million in use taxes, which are taxes applied to materials and appliances used to build or, in the case of fire victims, rebuild homes.

It's tax revenue that homeowners say governments didn't expect before the disaster and should now refund.

Marshall Together and Superior Rising, organizations made up of fire victims, are now asking for a waiver or refund of use taxes. Of the nearly 1,100 homes destroyed in the Marshall Fire, only about 90 have enough insurance to rebuild.

"People are cobbling dollar by dollar how to do this," said Tawnya Samauroo, whose home in Louisville was among those burned. Because of factors out of homeowners control, like inflation, the cost to rebuild has skyrocketed.

Samauroo says it will take $840,000 to replace her 1,700 square foot home even though she's downgrading some things.

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"Everybody has to make a gamble, even in the best case situation. Will you have enough money when you get to 80% for the project or 90%? You're trying to imagine where all these pots of money are," she said.

Use taxes are one of those pots of money. Superior is refunding its use tax but Louisville, Boulder County, RTD and the state are not. Marshall Together and Superior Rising sent letters asking them to follow Superior's lead.

"They weren't budgeting to have this money in the first place because they weren't budgeting for 1,000 homes to burn down in the Marshall Fire," said Samouroo.

Depending on where homeowners live, the combined use taxes could run as high as 8.5%, which is about $25,000 for a $550,000 home.

Louisville would not comment on whether it would refund its use tax because it said it had not received the letter as of our story deadline. RTD said it would look into the request. Boulder County says its use taxes are earmarked for a specific purpose so it would have to consult with its attorney.

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Superior Trustee Neal Shah says where there's a will, there's a way. The county, he notes, could backfill the money from its general fund.

"We all have to get a little more creative. There are plenty of lawyers out here ready to roll up their sleeves and find a way to make it work," Shah said.

After all, Samauroo notes, homeowners have no choice but to make it work.

"We as homeowners, we have to take a lot of risks right now. We don't know if the price of lumber is going to double or if the cabinets are going to be 30% more," she said.

A spokesperson for Gov. Jared Polis says he "supports tax relief for victims of the Marshall Fire" and "welcomes the state legislature continuing to work on suspending taxes for fire victims either through an interim committee or in the future legislative sessions."

In the last week of the 2022 legislative session, the House Appropriations Committee stripped an amendment from a bill that would have waived use taxes for fire victims, noting it would negatively impact the budget. Samouroo says many homeowners already paid a use tax when they built their homes and shouldn't have to pay it again for a rebuild they didn't want.

She says they can't wait until next legislative session for a decision. Most insurance policies only cover living expenses for two years and rebuilds will take at least that long.

"Everything helps, and knowing sooner rather than later, so people can make decisions and move forward."

Marshall Together and Superior Rising are asking the legislature to pass a bill next session that automatically waives use taxes in future disasters. Shah says California, Oregon and Washington already do so.

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