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Passenger-Mile Tax 

Table of Contents

Background

Colorado’s passenger-mile tax was enacted in 1931.1  In Colorado, passenger miles traveled by a commercial vehicle designed for 15 or more passengers when operating intrastate or interstate are subject to the passenger-mile tax.  Passenger-mile tax revenue is subject to the spending and revenue limitations of TABOR.

 

Tax Rate

The passenger-mile tax rate is assessed at a rate of one mill for each passenger mile traveled ($0.001 multiplied by the number of passengers, multiplied by the number of miles traveled in Colorado).  A commercial passenger vehicle that is registered in another state and makes occasional trips to Colorado may pay a fee of $25 or the actual tax, whichever is greater, on a trip-by-trip basis.  In cases where both the International Fuel Tax Agreement (IFTA) and the passenger-mile tax apply, returns must be filed for both.

 

Tax Exemptions

The tax does not apply to passenger services rendered within a city, city and county, or incorporated town by a company that engages in mass transit.  Commercial passenger carriers operated by public school districts, churches, Boy/Girl Scout troops or similar organizations are also exempt if no direct charge is made for transportation to the user of the service.2  Vehicles registered and utilized as recreational vehicles are not subject to the tax.  Finally, the tax only applies to miles driven on federal or state highways or in unincorporated areas.  Miles driven within a city or incorporated town are not taxed.

 

Distribution

Revenue from the passenger-mile tax is deposited in the Highway Users Tax Fund for spending on transportation-related projects.  This amounted to $0.3 million in FY 2017-18.

 

State Comparisons

A small number of states impose a mileage tax on commercial vehicles designed for 15 or more passengers.  For example, Oregon imposes a weight-mileage tax on vehicles over 26,000 pounds, including vehicles designed to transport 16 or more passengers.  New Mexico and Wyoming impose similar weight-mileage taxes on high-capacity passenger commercial vehicles.  Unlike the fixed tax rate in Colorado, in all three states mentioned previously, tax rates vary based on the vehicle’s weight.

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1 Section 42-3-304 (13), C.R.S.
2 1 CCR 201-9
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