Raising the Bottom Line: How Fort Collins, CO is Transforming Tax Filing for Community Impact

Situated along the Cache La Poudre River and the Front Range, the City of Fort Collins frequently makes the list of best places to live due to its amenities, access to education (Colorado State University), and proximity to outdoor recreation.

Jennifer Poznanovic, Senior Manager of Sales Tax & Revenue in Fort Collins, has been with the City for nearly six years and cites the community’s active local government as one of the driving forces behind her initial desire to work there. Today, she heads up the tax department, overseeing seven other full-time staff members. As a home rule city, Fort Collins has its own tax code, administers licenses, and collects sales and use tax—as well as lodging, short-term rental, and outdoor vending taxes.

To efficiently manage tax and licensing and improve compliance, the tax department launched an online portal. Providing a simpler and more streamlined experience to filers has improved the overall experience and compliance levels for local business owners and freed up staff time. This, in turn, has enabled staff to focus on more strategic reporting and forecasting, auditing, and rolling out a rebate program aimed at offsetting the cost of living for lower-income residents.

The Need

Local sales tax in Fort Collins—which amounted to $155 million in 2023—plays an important role in helping fund community programs and priorities. Representing more than 50% of the governmental revenue stream in the City, sales tax is also a critical source of revenue for many departments.

“Sales tax is by far the biggest revenue stream,” explains Poznanovic. “But we have a lot of other license fees and taxes we manage as well—such as the outdoor vendor licenses, lodging tax licenses, and a liquor occupation tax.” Ensuring businesses not only have access to resources to help them understand the tax requirements but also have the means to easily register and remit is essential.

The Solution

The taxpayer experience and ensuring the community has access to a variety of resources is a priority for Poznanovic. Since implementing the GovOS tax filing system in 2020, the department has seen a continual rise in the number of businesses filing online. “We have a lot of license fees and tax types that flow through GovOS, and what’s nice about that is that it’s all in one system. So, someone who needs to log on to pay their outdoor vendor fee can also get their sales tax license through the same portal.”

The Results

The higher the number of taxpayers who file online, the smaller the administrative burden on the tax department. Having more businesses online means staff can focus on other priorities. “Since moving from our old provider to GovOS, we have seen a significant increase in folks who file online. The online tax filing system definitely saves the department time.”

Other activities and initiatives led by the tax department include:

Reporting & Forecasting

The department tracks sales tax collections in 18 different categories to monitor economic health. “The data is very important to help us compare trends and keep a pulse on the economic health of the community. We have a two-year budget cycle, so it also helps us forecast when preparing budgets.”

Many departments—particularly those that have a revenue stream coming from sales tax—have a vested interest in how collections are going. Poznanovic prepares a series of reports, including a monthly sales and use tax report, available to the public via the City’s website.

Data Upkeep

The department uses the GovOS system to run periodic audits to deactivate licenses for businesses that are no longer operating. “We ran an audit with GovOS this year, which involves pulling a report in the system that our team then spot-checks in case there are any exceptions we want to remove from the list. After we complete our review of the report, GovOS will do a mass deactivation for us. Having the ability to do that within the system definitely saves us time.”

Grocery Taxes & Rebate Program

Fort Collins has a lower sales tax rate on groceries at 2.25% compared to the overall sales tax rate of 4.35%. “City Council has been working hard to ensure that new dedicated taxes do not apply to the grocery tax to help keep the rate down. Even the additional half-cent tax increase recently approved by voters does not apply to groceries.”

In 2017, the department expanded eligibility for the City’s Grocery Tax Rebate Program, which has seen increased participation in recent years. “The program reimburses income-qualified households for the portion they would have paid in sales tax. It is a great initiative to be a part of as it has a direct positive impact on members of the community.”

Taxpayer Education

The City’s website houses many resources, including guides, FAQs, and educational videos. The tax department also offers in-person classes and community outreach to help businesses understand sales tax compliance. “We hold Sales Tax 101 classes with an auditor present to help answer any questions citizens have.” Ensuring the community has access to these resources has a trickle-down effect that ultimately impacts compliance while making the department more accessible. “We like to stay involved in the community—we’re here to help.”

When looking ahead at the priorities for the City and what she is most keen to accomplish, Poznanovic cites further increasing the number of those filing and paying taxes online, and continuing to offer taxpayer education.

For more information about GovOS solutions, visit govos.com/solutions/