A suit before the Colorado Court of Appeals today sought to reclaim revenue the state now uses to pay for its elections — leaving its future funding in question.

The case, filed by the National Federation of Independent Business , claims that businesses carry an unfair burden of the cost of funding the state’s elections, including costs carried by counties.

Attorneys for NFIB point out that business filings, which range from $5 to $125, make up nearly the entirety of the Department of State’s approximate $20 million-plus annual budget.

Only a very small portion of the department’s operations has anything to do with managing business documents and filings or providing services to those who pay the various required filing charges, according to the lawsuit. Only about 10 percent of the charges pay for business-related services, according to attorneys for NFIB.

The other 90 percent of the charges collected each year pay for general government expenses overseen by the department. The largest portion goes to the department’s elections division, which accounts for approximately 65 percent of the department’s total annual budget.

“The stipulated facts establish that the dominant purpose of the Business Charges is to fund various general governmental services that bear no relation to those paying the charges,” the lawsuit states.

“You have a situation here where businesses are paying for the entire election operations of the state,” said Jason Dunn , an attorney representing NFIB.

The three-judge appellate panel at times appeared worried about setting a precedent that could cripple funding behind core government services.

“What about the argument that they’ve had these traditional functions… that they have to continue to support. It’s been sort of a big push of our current governor to make sure government is more accessible to the public… What’s problematic about that?” asked Judge Terry Fox.

Dunn responded, “NFIB is not trying to disable the function of government. We’re merely asking that functions of government that we all share in the benefit of, we all share in the cost of.”

A lower court in November 2015 tossed NFIB’s lawsuit, which brought the case to the Court of Appeals after attorneys for NFIB filed a challenge. The case started under former Secretary of State Scott Gessler , a Republican.

At the heart of the case is whether the filings collected by the department qualify as a “fee” or a “tax.” NFIB contends that the filings are no different than a “tax” since the filings fund general operations rather than a particular service. Assuming the filings amount to a “tax,” then the revenue would have to be approved by voters under the Taxpayer’s Bill of Rights , attorneys argue.

Attorneys for the state, however, point out that the charges were enacted in 1983 — well before TABOR  — and the legislature required the department to set and adjust fees for all department work.

It’s an interesting position for Republican Secretary of State Wayne Williams to be in, as the “fee” versus “tax” question is one that Republicans in Colorado usually advance. Republicans tend to lean in the direction that a “tax” is often disguised as a “fee.”

The state points out that a charge is a “fee” under TABOR when it funds a particular function or service. Because the fees charged by the secretary of state are placed in a segregated account and may be used only to fund the department’s operations, it is defined as a “fee,” the state argues.

Furthermore, TABOR requires voter approval of a tax rate increase or policy change when there is a net revenue gain to the state. But the increased revenue for the Secretary of State’s Office are due to and offset by an equal increase in business filings, with the fiscal policy the same for more than 30 years. The state points out that there is no evidence of a net revenue gain, which exempts it from a vote under TABOR.

“The arrangement NFIB suggests would make the operation of government fundamentally unworkable,” state attorneys argue in the lawsuit.

“If a vote is required for each appropriation from a cash fund or each change to a fee schedule, the state government would grind to a halt. NFIB’s interpretation should be rejected… because it would cripple the government’s ability to function.”

Judge Laurie A. Booras seemed concerned that the state was trying to frame the revenue as appropriate for general department spending.

“Is it enough just to say it covers the official work of the agency when the agency has so many different functions?” she asked. “Here you’ve got a business fee or tax. If it’s a tax, then it’s being used for elections and it’s being used for administrative functions of the agency.”

It could take months before the Court of Appeals issues a ruling.