A Colorado Public Improvement Fee, usually shown on your receipt as “PIF,” is a private charge that a developer adds to every purchase at certain shopping centers to help pay for roads, parking, drainage, and other infrastructure inside the development. It is not a tax, and no part of it goes to the state or city. The developer created the fee through a covenant recorded against the property, and every store that leases space there is contractually required to collect it from customers.
Why It Looks Like a Tax but Isn’t
A PIF sits on your receipt next to the sales tax line, which is exactly why it causes confusion. The Colorado Department of Revenue describes it as “a private fee imposed on consumers making purchases at certain shopping complexes across the state by the developer or landlord of the property.”1Colorado Department of Revenue. GIL 25-005 – Taxability of Public Improvement Fees The money flows to the developer or a designated trustee, never to a government treasury.
Because the fee is contractual rather than governmental, it sits outside the Taxpayer’s Bill of Rights. TABOR requires voter approval for new taxes, but a PIF needs no public vote because the city and developer created it through a private agreement. The City of Colorado Springs has stated plainly that a PIF “is not a fee which voters approved, nor does it have anything to do with the city’s government.”2FOX21 News. What’s a PIF and Why Am I Paying for It?
Do You Have to Pay It?
Practically, yes. The covenant is recorded against the property title, so every tenant in the development is bound to collect the fee through their lease. The cashier has no discretion to waive it. Refusing to pay the PIF means refusing the transaction. Your only real option is to shop at a store outside a PIF development.
You can tell whether you’re inside one by looking for a “PIF” line on your receipt, and in some cities by a placard posted at the register. Rates and disclosure practices vary by development because each one is governed by its own agreement.
Credit PIF vs. Add-On PIF: What You Actually Pay Extra
Not every PIF increases your total cost by the full percentage shown. There are two structures, and the difference matters:
- Credit PIF. The city reduces its own sales tax rate at the development, and the developer’s PIF roughly fills the gap. Belmar in Lakewood works this way: a 2.5% PIF applies, but Lakewood dropped its city sales tax at Belmar from 3% to 1%. The combined rate shoppers pay is close to what it would be without the PIF, but a portion of it goes to the developer instead of the city.3City of Lakewood, CO. Belmar Public Improvement Fee
- Add-on PIF. The city charges full sales tax and the PIF is layered on top. Here, every dollar of PIF is a real increase in your out-of-pocket cost compared to shopping elsewhere.
Your receipt won’t tell you which structure applies. If you want to know, check the city’s finance or sales tax page for the specific development.
How Much PIFs Cost in Colorado
Rates run from roughly 0.5% up to 2.5% depending on the development. Belmar sits at the top end at 2.5%.3City of Lakewood, CO. Belmar Public Improvement Fee Loveland has developments charging a 1.25% PIF alongside a separate 1.0% Retail Sales Fee on the same purchases.4City of Loveland. PIF and RSF Fees Pueblo-area developments have rates as low as 0.5%.
The rate is written into the recorded covenants and doesn’t move with city tax changes. There’s no statewide cap and no uniformity. A store on one side of the street can charge a PIF while the store directly across the street charges nothing, because they sit in different developments.
You Pay Sales Tax on the PIF Itself
This is the detail most shoppers miss. Because a PIF is not a federal, state, local, or special district tax, the Colorado Department of Revenue treats it as part of the purchase price, and sales tax is calculated on that total. The Department put it this way in a 2025 general information letter: “a PIF is included in the purchase price and is subject to sales tax.”1Colorado Department of Revenue. GIL 25-005 – Taxability of Public Improvement Fees
On a $100 purchase with a 2.5% PIF, sales tax is figured on $102.50, not $100. The compounding is small per transaction and more noticeable on large purchases like furniture or appliances.
Where the Money Goes
PIF revenue is dedicated to infrastructure inside the development. Typical uses include internal roadways, parking structures, drainage, sidewalks, storm water systems, and sanitary sewer lines.5Town of Johnstown, CO. Public Improvement Fee (PIF) In mixed-use projects like Belmar, the money also funds plazas, landscaping, lighting, and benches that are open to the public even though they were paid for privately.
The retailer remits what it collects to the developer or to a third-party trustee. PIF revenues “are not collected by or remitted to” the local government.5Town of Johnstown, CO. Public Improvement Fee (PIF) The trustee typically applies the funds to debt service on the bonds that financed construction, or to ongoing maintenance of what was built. Oversight comes from the covenants and from the lenders, not from a public budget process.
You Can’t Deduct a PIF on Your Federal Return
If you itemize and claim the state and local sales tax deduction, leave the PIF out of your total. The IRS allows a deduction for general sales taxes, defined as “a tax imposed at one rate on retail sales of a broad range of items.”6Internal Revenue Service. Deductible Taxes A PIF doesn’t qualify. It isn’t a tax, it isn’t imposed by a government, it applies only within a specific development, and the IRS treats charges for local benefits as nondeductible outside narrow exceptions. Only the actual sales tax line on your receipt counts.
Not the Same as a Metro District Tax
If you live in a newer Colorado community, you may also see a metropolitan district charge on your property tax bill and wonder if it’s the same thing. It isn’t. A metropolitan district is a unit of local government that can levy property taxes and issue bonds, its budgets are public, and its tax increases are subject to TABOR voter approval. Belmar actually has both: three metropolitan districts were established on the site alongside the PIF.7Colorado Brownfields Partnership. Case Study: Belmar A PIF is a private contractual fee on purchases with no comparable public oversight. The two can exist in the same development, funding different pieces of the same infrastructure through different legal structures.
How Long a PIF Lasts
A PIF is not permanent. The duration is set in the original development agreement and generally lines up with the time needed to pay off the bonds or construction debt it was designed to cover. Lakewood describes the Belmar sales tax reduction as lasting “while the PIF is in effect,” which implies a defined endpoint.3City of Lakewood, CO. Belmar Public Improvement Fee In practice these terms often run 20 to 30 years, matching typical bond repayment schedules. Ongoing maintenance obligations can extend the timeline past the debt payoff.
If you want the specific expiration for a development, the recorded covenants are on file with the county clerk and recorder for the county where the property sits. The documents are public record.