Local governments in Colorado charge sales tax, in addition to county sales taxes.
Some Denver suburbs will offer economic development incentives for retailers, in the form of sales tax kickbacks. Let's say ... oh, Arapahoe County gets 4% and Centennial* gets 4% of sales tax revenues. Centennial might offer a large, prestigous retailer a 1% sales tax kickback, or 25% of the tax revenue it gets from them. A municipality may also use TIFs to finance improvements in the area, paying for those improvements with some earmarked sales tax revenue from the development.
What case were you reading about? If it's the Wal-Mart on Parker Road in Pioneer Hills, I may be able to offer some additional insight outside the Forums.
* or Aurora, or Greenwood Village, or wherever.