Why Colorado Should Review Its Tax Credits, Exemptions

Date: September 01, 2015

Are small businesses benefiting enough from the $4.6 billion in tax credits and exemptions?

A bill to study the effects of Colorado’s numerous tax credits, deductions and exemptions died last legislative session. Now, NFIB and state legislators want to see it reintroduced.

NFIB members have varied views on the tax breaks, but “where we do agree is the fact that we need to know if these are effective, because the business owners pay for them, and oftentimes can’t take advantage of them because they’re not big enough,” says Tony Gagliardi, NFIB Colorado state director.

The bill would have allowed for the review of tax breaks that cost the state $4.6 billion in revenue every year. “Some of these go back close to a hundred years, and at no time have we ever had a study that says if they’re effective or not,” says Gagliardi.

Senate Republicans were concerned the bill would threaten existing exemptions business owners rely on, but the sole purpose of the study was to see if they are effective or a waste of state revenue.

“As legislators think about the importance of a simplified tax structure going forward, it’s important to know who is using these tax exemptions and what the implications are on our state economy,” says state Sen. Owen Hill, who sponsored the bill.

“Bottom line is I believe the taxpayer has a right to know, are these tax credits doing what they’re supposed to do?” says Gagliardi. “Not to know the effectiveness of what $4.6 billion is being used for, I think it’s a disservice to the taxpayer.”

The bill is expected to be back next session. “We are looking to reintroduce a version of this study of exemptions that can garner more support,” says Hill. “It didn’t pass the first time around because some were concerned it will unnecessarily threaten the tax exemptions they depend on, but my whole goal in all of this is to simplify the tax code in such a way that promotes free enterprise and entrepreneurship.”


Related Content: Small Business News | Colorado | Economy

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