NewsMarshall Fire


After months of delays, Boulder County and Louisville waive use taxes, paving way for wildfire rebuilding

Boulder County also approves ADUs and accessory dwelling units for fire survivors who are rebuilding
Marshall Fire victim rebuilding his Louisville home himself
Posted at 3:48 PM, Nov 17, 2022
and last updated 2022-11-18 00:28:24-05

SUPERIOR, Colo. — In the wake of the Marshall Fire, all of the construction in the Town of Superior is a sight for sore eyes.

“The electrician is running cable right now,” said Jason Serbu, who is rebuilding his home after the Marshall Fire destroyed it and more than 1,000 others on Dec. 30, 2021. “As soon as I got a set of drawings, I got a contractor, and I moved forward quickly.”

Delays associated with rebuilding after the catastrophic wildfire have been more complicated and challenging than most anticipated.

“So many people realized they were underinsured,” Serbu said.

Neah Shah, a newly re-elected trustee with the Town of Superior, is also the co-founder of Superior Rising, a website dedicated to residents and business owners who were impacted by the blaze.

“I think the challenge is that cleanup took as long as it did,” Shah said.

When the Marshall Fire ripped through Boulder County two days before the new year, the destruction was mind-boggling. Residents remembered the fast-moving flames and desperate feeling of needing to escape.

Then, there was the torturous bureaucracy and red tape around recovery, including expensive green building codes, debris removal arguments amongst city and county leaders, and a debate about charging victims use taxes on construction materials.

“This is going to be an awfully difficult recovery,” said Christian Dino, who lost his home in fire.

Joseph Reid also lost his house.

“No one should have ever written such a badly underfunded policy,” he said.

While Superior moved quickly to waive use taxes, Louisville and Boulder County seemed to drag their feet.

“If people really wanted something to happen, they could have done it and could have done it quickly,” Shah said.

It even led to a protest in Louisville this past summer. Fire survivors demanded the city follow Superior’s lead and waive the thousands of dollars in use taxes homeowners would have to pay to rebuild.

“Either council can do something and pass an ordinance to rebate them, or we can go to the voters ourselves directly,” said fire survivor and protest organizer Tawnya Somauroo.

In the most basic terms, use taxes are like a sales tax on construction materials such as lumber, drywall and carpet. In Louisville, the use tax is about 3.6% on new construction. So, if a homeowner is rebuilding a $700,000 home, that’s $25,200 in taxes.

“Sales and use — it’s interchangeable,” Shah explained. “We call it a use tax only because of when the tax is paid, and it’s paid when you buy that permit.”

The argument for waiving the tax for fire survivors is that Louisville and Superior, as well as Boulder County, never expected more than 1,000 homes to burn to the ground in a single day, all needing to be rebuilt.

It would be a windfall of new construction tax revenue that no one saw coming, so why not just rebate it for fire survivors?

Superior saw it that way from the beginning.

“We don’t need that money,” Shah said. “The town doesn’t need that money, so let’s let the homeowners have it. Use taxes were something we waived back in February.”

Finally, after months of debate and growing frustrations, both Boulder County and Louisville folded to public pressure in just the past few weeks, waiving those taxes as well.

“Boulder County is refunding up to $3,500 of the use tax,” said Boulder County commissioner Claire Levy.

It's still not a full rebate for some fire survivors in Boulder County — like the full rebate in Superior — but most argue it’s better than nothing.

It also came very late in the year. Some argue it took so long, it will end up costing homeowners in Boulder County and Louisville more out of pocket because they are paying much more now for construction materials than they would have six months ago due to inflation.

“I think people approach these disasters very differently,” Shah said. “And some just sort of believe it will take time, and I don’t want it to take time. And I don’t want the government to be in the way. I want the homeowner to own their schedule and not be reliant on us to do something for them.”

Levy argues Boulder County took so much longer to approve the rebates because of a complicated bond structure that didn’t allow them to move as quickly as Superior, requiring the county to collect the tax and then rebate it.

“Whether it’s a windfall or not, legally we have to collect it,” Levy said. “(Superior’s) use tax is just a general, all-purpose use tax. It’s not voter-approved and earmarked. They had greater latitude than we did.”

In response, Shah said she had heard about that, but disagreed.

“By law, we had to collect the tax, as well," Shah said. "But we made a commitment to refunding it within 30 days. I think we’re averaging about five days per refund. So, it didn’t necessarily take nine months to do this. It could have been solved in April.”

Shah said it took community protests to make it happen.

“It really took the community demanding this for Boulder to truly come back and say, ‘OK, we will do it,’” he said.

The good news is things seem to be rolling now. New construction in the burn zones is well underway in Boulder County, Louisville and Superior. Boulder County is even allowing those who are rebuilding to add accessory dwelling units (ADUs) in their backyards, something most new home builds in Boulder aren’t allowed to do.

“Boulder County is very restrictive,” Levy said. “These are regulations that will just apply in the Marshall Fire rebuilding area to allow accessory dwelling units.”

Levy sees a lot of retirees opting to do this — people who are perhaps looking to have family close by.

“They want a place to maybe age-in-place and have a caregiver,” Levy said.

It could also provide rental income to fire survivors who choose to add an ADU.

“If we’re rebuilding and we’re starting all over again, let’s do this differently,” Levy said. “And we really wanted to support that.”

Superior has already refunded more than $500,000 in use taxes to date.

“It’s been actually a tremendous help because if you know you can submit for a permit and then you’re going to get half that permit fee back once they approve your permit, that’s some money you can put directly into your build,” Serbu said. “$10,000, $15,000, $20,000 — that could be someone’s kitchen. That could be someone’s finished basement.”

And Serbu is also offering his architectural services at deeply discounted prices to fellow fire survivors.

“Something like this can only make the town stronger,” Serbu said. “It can make the residents more resilient.”