A vendor fee is retained by retailers to cover the vendor’s expense in the collection and remittance of city sales tax. To retain the fee, sales tax must be remitted to the city in a timely fashion. Prior to the RSE program, the vendor’s fee was three and one-third percent of the tax collected.
The RSE program began in 1990 after Montrose merchants approached the Montrose City Council about establishing a fund that would be used to increase retail sales in the city. The RSE fund, supported by withholding 60% of the Vendor’s Fee, was created to fulfill this request.
RSE funds are reserved for a specific purpose. The City of Montrose Municipal Code, Section 5-15-33, requires that RSE funds be “used by the City only for purposes reasonably related to the enhancement of retail sales within the City.”
RSE funds are held separate from the city’s General Fund, and unexpended funds build on the RSE account balance that is carried forward from year to year.