Democratic Convention Committee Got Tax-Free Gasoline in Denver

Published October 8, 2008

Leading Democratic Party officials may want higher energy taxes, but Democrats apparently believe they should not have to pay them—at least when they’re working on the Democratic National Convention.

One month before the August 25-28 convention was to begin, Denver residents learned the host committee was using the city’s gas pumps and public works department to fuel their vehicles and have them washed. By using the city gas pumps, the committee members avoided paying state and federal fuel taxes totaling 40.4 cents a gallon.

Colorado Attorney General John Suthers told reporters the practice appeared to be illegal and referred the matter to the state’s Department of Revenue. The department requires private nonprofits such as the Denver 2008 Convention Host Committee to pay taxes on motor fuels. Only local and state governments may purchase fuel tax-free.

“State law is clear that nonprofits do not qualify for the governmental exemption from fuel taxes,” said department spokesman Mark Couch in an email. However, he declined to discuss the specifics of the actions of Denver officials or the convention host committee.

Contract Not Executed

The matter arose at a Denver City Council meeting in July, when public works official Christine Downs said the city needed a signed contract to be reimbursed for the use of the city’s tax-free gas pumps and car washes. A contract had been written but not signed.

Several council members were shocked to learn convention committee members had been fueling up vehicles and getting cars washed at city facilities since last March.

City Councilman Charlie Brown asked, “Does the [Democratic] Party want to accept tax-free fuel? This money goes to our state highway system. Why shouldn’t the DNC be willing to help our roads and our maintenance and our construction?”

Party Backed Down

Denver Post reporter Chuck Plunkett quoted Councilwoman Jeanne Faatz complaining it was unfair for committee members to buy gasoline without paying taxes like everyone else. “I pay taxes on my fuel when I fill up my own car,” she said.

Soon after the matter became public knowledge, the Democratic National Convention Committee issued a statement saying, “The City of Denver and the Denver Host Committee informed us late this afternoon about this matter and told us that the Denver Host Committee will pay all applicable taxes and fees related to their fuel contract, as they should.”

Steve Stanek ([email protected]) is a research fellow of The Heartland Institute and managing editor of Budget & Tax News.