Grassroots Effort to Simplify Colorado Sales Tax with Paul Archer

Paul Archer: 00:01:00

He said it can't be changed without a vote of the people, and we can refer a vote to the people, but that's a really heavy lift. And the president was looking at something simpler than a significant constitutional initiative. So they backed away.

But at that point my appetite was wet to fix the system.

Meredith: 00:01:23

Welcome to SALTovation.

The SALTovation show is a podcast series featuring the leading voices in SALT where we talk about the issues and strategies to help you make sense of state and local tax.

That's Paul Archer, a business owner of Automated Business Technologies and humanitarian who joins us today from Kenya where he is engaged in a senior mission. Paul has been instrumental in kickstarting efforts to simplify the infuriating state of sales tax in Colorado.

We start our discussion today with where Paul finds himself now, then circle back to his business story that transitioned into Paul's dedicated efforts in sales tax simplification and eventually sparked the Simplified Sales Tax Coalition in Colorado. Paul, thank you so much for joining us today on this Cultivation podcast. Let's start by bringing our audience up to speed.

Where are we talking to you from right now and from once you answer that question? What inspired your current mission and how is life treating you out there?

Paul Archer: 00:02:25

I'm in Nairobi, Kenya. Kenya is a country in Central Africa on the east side of the continent.

We're next to Tanzania or Tanzania, Uganda on the north, Democratic Republic on the Congo on the west, Sudan north of us, Ethiopia north of us. Beautiful country here. I didn't choose Kenya, so we're serving a mission for the Church of Jesus Christ of Latter Day Saints.

We've been here 15 months. We'll be here through about the end of January. We are what are called senior missionaries.

And when you serve a mission, this is something we've planned to do for most of our life, Carol and I, my wife been married for 45 years and when I was a young man I served a church mission in the state of Washington.

So as a 19 year old, I was knocking on doors for two years and teaching people about our church and had some marvelous experiences that if you haven't done that sort of thing, there's not really any way to replicate the experience. You leave home, you don't know where you're going to go. The church leadership calls you to wherever you go.

And that was the case in: 1976

It's actually now an online system and in the application process they have at the missionary portal a list of senior missionary Needs all around the world. So you can look at senior missionary needs all around the world.

There are, there's about 80,000 young missionaries in the world who are the 18 to 24, 25 year old young men and young women. There's, oh, probably five or six thousand senior missionaries like us. So there's lots of need.

There are leaders all over the world who want senior couples.

So you look through the portal and see all kinds of things that look interesting and you can create a list of eight areas that you would be interested in going. And in that process, we discovered a resource center that the church opened in Washington D.C. for refugees. And it's a really awesome resource center.

It teaches about 50 courses about living in America and not just basic skills like language skills, but also skills like business skills and how to improve your education, how to survive in the area, how to get housing, et cetera, et cetera. And so we actually thought we were going there because the leadership there had requested us specifically.

Now, we had Kenya on our list of eight, but thought that anything other than Washington D.C. was superfluous because we had been requested in Washington D.C.

in late March of: 2023

We, you know, all of our personal expenses, we pay for, and we serve with our church communication department. We serve with people who work in communications in our local congregations and the several countries that we're involved in.

And our whole purpose is Scripturally, we say the purpose is to bring the church out of obscurity and out of darkness. Obscurity is so that people know about it. Darkness is so that people don't understand it.

Bringing it out of darkness means a lot of people misunderstand the church. And so we work to help them understand it. So like I was telling Judy, today, we're in an event called Trees for Food.

We have significant humanitarian activity all around the world. Our church is well north of a billion dollars a year in humanitarian spend.

And there are in some areas, like here, humanitarian employees whose job is to go find need. And there's no shortage of need here. And then there are actually also humanitarian missionaries. So there's missionaries like us.

So our humanitarian activities focus on healthcare, food, Security, education, and clean water. So we've drilled hundreds and hundreds of boreholes all around Africa, maybe into the thousands of boreholes. There's no municipal water system here.

So you guys think in the United States of walking to a tap and turning on water. There's no municipal water system like that. So we live in an apartment building. The apartment building has a borehole, which is a well.

So our water into this apartment building comes right out of the well. It isn't purified as we know it. So we don't drink the water. We drink bottled water that we buy at stores and bottled water places.

But the church does a lot of drilling boreholes, which changes the whole lives of communities when they do that. We've built and expanded many, many, many healthcare facilities. We have expanded and remodeled many schools.

And we have done a lot in the area of food security, like trees for food.

Or just recently, we made a $12 million donation here to UNICEF, which is going to people who are experiencing food challenges as a result of the significant rainfall that we had in the long rain season last, what would be our spring. They don't really have seasons like we have them. Remember, we're right on the equator, so the weather's perfect almost every day.

Temperatures are 70 to 80 degrees Fahrenheit, low humidity, lovely. We have light rains for a few months, then we have long rains.

Well, we had long, hard rains back in March, April, May, which did a fair amount of flooding. So the church stepped up and donated a significant amount of money for food support for people who'd been displaced from the flooding.

And so we're often with the humanitarian people like we were today, because those are newsworthy things that we cover, write up and post.

And so we post stories in what's called the Church of Jesus Christ Latter Day Saints newsroom, and you can go to the church website and then click on Newsroom, and you can go find all kinds of news from Africa and some of that news from Africa. There's three couples like us here and the three areas of Africa. So about a third of those posts either were written by us or we edited them.

Someone who we trained wrote them, we edited them and posted them. So. And you know, we have a lovely experience working alongside the people in Africa. We've made just absolute dear friends here.

They are lovely people, big hearted, wonderful to us, and all the kind. We've been to four countries and all the countries we've been in, we've had the same experience. They're just fantastic.

So when we do go home we'll miss the people a lot. We're missing our 21 grandchildren and our five married children and lots of friends and the things that we had at home.

So anyway, that's what we're doing now.

Meredith: 00:10:16

What a wonderful opportunity and just kind of life experience that you get to take back with you.

And we can even kind of bring it back to sales tax, you know, by taxes that we pay in this country in these local jurisdictions is what pays for a lot of those things that we have access to in this country that others don't. And so, you know, as we kind of bring this back into a tax podcast. Right.

Can you walk us through your background and how did you first encounter the wonderful world of sales tax and what that felt like trying to figure out as a business owner?

Meredith: 00:10:59

Oh, and I want to step out and say there are 30,000 water districts in America.

Paul Archer: 00:11:04

Yeah.

Meredith: 00:11:05

So, yeah, you know that because we have a client that sells like the back end to the billing system system for them so they can get paid. And then you pay for your water separately. So I buy Denver water, Meredith, and Denver, too. We have Denver water, so it comes out of our tap.

But isn't that interesting that there was some type of reckoning done to organize that so you would have water and here you are with boreholes.

Paul Archer: 00:11:26

Yes.

Meredith: 00:11:26

There is no organization around the use of water in terms of all of it collectively.

Paul Archer: 00:11:32

Yes. We see every day lots of them trucks on the road called clean water trucks. So they're just big tankers with clean water and they take them to places.

And some places have these huge, like 10,000 liter containers that they pump water into, and that's the water for them. You'll see people where there's a borehole coming with like 15 liter containers that they fill with water and carry home. That's their water.

So you find living here, and Kenya is one of the more developed African countries. It's one of the wealthier African countries.

But you see so many things that we take for granted in the United States, like turning a faucet and clean water comes out. Right. Or very reliable electricity. Actually, we pay for electricity in arrears here. They pay for it in advance.

So you have to pay for electricity in advance. You get a meter and you watch it tick down and then you have to go add time to it. The roads.

We went back to Colorado briefly in August because we had our 21st grandchild and we wanted to be there for her birth.

And we landed at DIA and we're driving our son well, our whole Family that's in Colorado picked us up and we're driving to where we live and I'm looking around going, wow, this road's amazing. Look at this. This is incredible. And the traffic's moving and people are rational on the roads. It's awesome.

So we have countless things in the United States that we take for granted. One thing we could all do better in the United States is have a heavy dose of gratitude. So for what a remarkable, amazing country we live in.

So, okay, how sales tax and me and my business. So I've been in the, what we call today the office technology business. In the.

When I first got in the business, we called it simply the copier business. So I started as a 21 year old working for a company that my brother had founded.

And he and my other brother and a third guy were the owners of the company. And it was a go to school job.

So I was going to school, working on an accounting degree and actually started selling copiers while I was a student in college. And I thought, I think I like this a lot more than accounting. No offense, Judy. And you're accounting, Both of us are CPAs, yes.

Meredith: 00:14:07

Yeah, what were we thinking? It's way more fun to sell than actually compile the numbers.

Paul Archer: 00:14:11

Accounting is a necessary and virtuous profession. But anyway, I was in sales, so I finished with a undergraduate degree and then I went back and got an mba.

And at a very young age I was leading our sales team. And at 29, I was asked by my brother to be general manager of the company. And so as a 29 year old, the company with 160 employees reported to me.

And we were growing, we were doing well. We sold the business at that point in time and the company that acquired us, their operating philosophy was buy good companies and leave them alone.

Now that's really rare when somebody buys a company. Most people who buy companies, most companies who buy companies don't leave them alone. This company who bought us actually left us alone.

They left us completely alone. We were expected to do two things, achieve a business plan in revenue, profit and cash flow. And don't cheat.

So that was basically their imprimatur to us. Make your plan and don't cheat. And we were subject once a year to a brief two week audit and they'd make sure we weren't cheating.

So after being in that company we had sold to for a few years, they came to me and asked me to leave Utah and go to Colorado. The way that they would address problem companies is they would fire the President and bring in a new president.

So the headquarters staff was really small in this multibillion dollar company.

There were, I don't know, 30 or 40 people at headquarters and most of them frankly were auditors who would go out to audit us to make sure we were doing things according to GAAP and the company's high ethical standards and so on. So they wanted to make a change in Colorado.

Things weren't going well and the CEO of the company came to me and said, would you consider going to Colorado? He said, I'm not going to make you go if you don't want to go, I understand, but we'd love to have you go.

And it was clear it was going to be a turnaround. And so I agreed to do it for at least two, but no more than three years.

So I left Utah, I came to Colorado and the deal was they would pay to move me and they would pay to move me back and then I'd go back at least the level I left. And that was 31 years ago. So we are clearly never made the three year turnaround still in the same industry.

The industry has morphed through technological changes. So today where back in those early days we sold and serviced copiers, today we represent any infrastructure thing that goes into an office.

So printing and imaging networks, desktops, we have a managed IT section of our company that's growing rapidly.

We do Building Access, which is a digital solution these days we move people away from locks and keys and so on and turn the whole thing to a digital solution. We do digital displays, we do document management, you know, electronic filing and retrieval. So and we do VoIP phone systems.

tarted the company in July of: 2005

So I left that company that acquired us and went out and did a change the world startup which a whole different story is how we did change the world. But I didn't get rich doing it. But it was a really interesting experience and it has impacted our industry significantly.

I spent a couple of years at hp, realized they called me one day in the latter part of that Changed the World DL and said, hey, how would you feel about coming to work for hp? So I hadn't pursued them, I hadn't called them, I hadn't talked to anybody about that. They called me on the phone and offered me a job.

So I spent two and a half years at hp, decided that I really preferred working in a small business for a number of reasons. And so I came back to. I bought a company in Colorado, and we also have a company in Utah now.

So from a sales tax standpoint, sales taxes have always been a part of our lives. But I had the experience of living in Utah that has a very simple sales tax system. So the Utah sales tax system, you file one return a month.

You file it with the state tax commission, and you include to the state tax commission revenue that came from all of the cities and towns in the state. You don't have to be licensed with cities and towns all over kingdom come. You don't have to remit to cities and towns all over the state.

You simply have to report what you did in each city. The state pays them, we pay the state one return. Easy peasy. And then you're subject to.

I think they could audit you, like, every three years, something like that. But you're subject to audit from only one entity. So the only entity that could audit you as the state tax commission.

I knew people in the state tax commission when I was in Utah. They were a customer of ours.

I knew the director of the state tax commission, who was a really dynamic former partner at one of the big today four accounting firms, was recruited by a governor in the state who was asked to come out and lead the tax commission. And I was connected with a lot of cities who would say all the time, the state does a great job, and they're perfectly happy with the system in Utah.

Then I moved to Colorado, and, oh, my gosh, we took something that many states do very simply and made it one of the most complicated things that businesses have to deal with.

So at the same time I was in Colorado, my brother was CFO of the Utah company I'd been with, and I would complain to him regularly about sales tax, and he'd say, what are you complaining about? It's a piece of cake. And I'd say, oh, my gosh, Mike, we spend days a month on sales tax. And he said, I spend like an hour. He said, really?

He said, yeah, he spent like an hour on sales tax. And I said, no, not here. Not only do we spend days a month, but we get audits from all kinds of entities.

And so it just becomes this huge productivity drain for a business. And so, for a fair number of years, it was just kind of the way it was. And the catalyst that caused me to start thinking about it.

I had long thought that I knew from firsthand experience there was a better way to do it, but I hadn't thought about getting involved in Getting to the better way of doing it until the South Metro Denver Chamber came to me. And at the time, I was the chair of the south metro Denver Chamber's then healthcare policy task force.

They came to me and said, brandon Schaefer, who's the Senate president in Colorado, he was a Democrat, he wanted to sponsor some business friendly legislation.

And he approached the South Metro Denver chamber, which at the time was the third largest chamber of the state, and he said, can you give me some ideas for business friendly legislation that I could sponsor? So the president of the chamber called me and said, hey, do you have any ideas? Is there anything you'd like to advance?

And I said, yeah, we need to fix our sales tax system. I thought about it for about that long. And he said, well, will you write up something?

So I wrote a white paper on how to fix the Colorado sales tax system. And so I started with, what's the problem? And then I wrote, how would you fix it?

So I sent that to the president of the chamber, who took it to the board, and the board advanced my recommendation to senate president Schaeffer, who reached out to me and said, hey, I want to talk to you. So I went down and met with him in his office at the Capitol. And he said, this is great. And he said, you know, I don't. I think he's a lawyer.

So he didn't really have to deal much with sales tax. He said, I had no idea it was this big a headache. And I said, oh, yeah, huge. And he said, I'm going to sponsor this. Let's do it.

xcited about it. This is like: 2009

And then he hooked me up with his legislative chief counsel. So I went down and met with him, walked him through the white paper, and he said, okay, I'm going to draft legislation.

So this was looking like, wow, this is going to be a fast track to fixing this thing. And he said, I'm going to write legislation. President Schaeffer's going to sponsor it, and this is going to be great.

sh, maybe of heading into the: 2010

So he calls me back a couple of weeks later and he says, hey, we have a problem. And I said, what's the problem?

He said, well, it turns out that sales tax in Colorado is not statutory, meaning the legislature created it and the legislature could change it. He said, Sales tax in Colorado is constitutional. And he said, it can't be changed without a vote of the people.

And we can refer a vote to the people, but that's a really heavy lift. And the president was looking at something simpler than a significant constitutional initiative, so they backed away.

But at that point, my appetite was wet to fix the system. And so I would get invited to these meet a group of legislator things where they wanted to go talk to businesses.

And I'd go to meet with these groups of legislators, and they. It would be a bipartisan group, and they would basically say to us, what's challenging to you in the business community?

And what would you like to see fixed? And there were businesses from all across the spectrum, and the drum I would always beat was, we have to fix the sales tax system.

And I would walk them through in these. These panels where there might be 10 people from the business community, me being one of them, and four legislators.

And once they'd hear that it was constitutional, not statutory, they'd all just say, too heavy a lift. Don't want to do that.

And so this was about, like,: 2010

We had no lobbyists, no organization. It was just her and me. And we wrote a bill about common definitions because we knew this.

The same thing was defined 40 different ways around the state.

And so we wanted to be able to create a database of how complicated just the definitions were so that we would have that in our satchel to go to legislators and cities and towns and say, look how crazy this is.

So she and I wrote legislation to fund a study group to go to every city and town and get their whole set of definitions and create a book of definitions in the state and compare and contrast them.

And so the bill passed, and as expected, you had this very lengthy document that defined the same things multiple different ways all across the state.

So from that, she and I started going out and meeting with cities, and we'd go meet with the mayor and the finance manager, the revenue manager, and we'd always hear the same thing.

When we talk to cities, we know we have a really awful sales tax system, but we control sales tax in our city, and we don't want to give up that control. We trust ourselves more than we trust the state. And we would tell them the same Thing every time.

Why would you impose something this onerous on your whole business community? And we're not, you know, we disabuse them right away of the notion of we were trying to take money out of their pocket.

We told them, if anything, this is going to be revenue positive. And they would say, why? And we said, you have a lot of. There's a lot of tax cheats in the state who aren't tax cheats because they're cheats.

They're tax cheats because the system is so hard and they'd rather get caught, they'd rather run the risk of getting caught than have to comply. And if they got caught, they changed what they were doing.

But there were many of them who would tell me, yeah, we know we're not doing it right, but we're not going to do it. And so we would tell them, the cities about these tax cheats. And we said, if anything, fixing our sales tax system will be revenue positive to you.

But the answer was always the same. And you know, I was a small business owner with a state representative, one state representative who covered part of Centennial in Littleton.

And frankly, there were times that we were treated completely rudely and there were times we also, we met, went with the state tax commission and same. Or the state department of Revenue. The state Department of Revenue, same result. So one day Kathleen said to me, do you know Jake Jabs?

And I said, well, yeah, he has tigers on television, but I've never met him. And she said, well, I actually know Jake a little bit and I know that sales tax drives him crazy. Why don't you call him?

umber. So again, this is like: 2010

And Jake's still running American Furniture Warehouse, by the way. Now he has a really strong leadership team, but Jake's there every day.

In fact, when I was there in August for a couple weeks, I went out to American Furniture Warehouse and I saw Jake. So I called Jake and said, jake, I'm trying to get some momentum going to fix the state sales tax system. What do you think of joining me?

And he said, paul, I've been fighting this for 40 years that I've been in business in Colorado. And he said, I just don't know if I have any more fight in me. And I said, jake, this time, this time we could do it.

And he said, well, come see me at my office. So I went out to see Jake at his office. And I walked him through. I said, you know what the problem is, Jake?

And I think that we can build a coalition that could fix this. And he said, okay, I'm in. I'm going to give you my controller and assistant controller, and they'll work with you.

And so then when we'd go see a city, it was Paul Archer, Automated Business Technologies and American Furniture Warehouse. And American Furniture Warehouse is many, many times our size. They pay a lot of sales tax in every state or every city in the state.

They're one of the largest furniture retailers in the country. You know, it's a really wonderful Colorado success story. And so wherever we went, they had to be nice to us.

So we'd go in and meet with them, and it was Kathleen, me, the controller of American Furniture Warehouse, and they would be nice and we'd make our case and they'd all say, well, we agree it's a significant problem, but we don't want to give up control.

Meredith: 00:30:48

This podcast is for educational purposes only and is not intended, nor should it be relied upon, as legal, tax, accounting or investment advice. You should consult with a competent professional to discuss specifics of your situation and the applicability of the information presented.