Colorado’s only major effort to cut taxes on business equipment this legislative session was voted down by the state’s legislative committee.
According to the Denver Business Journal, House Bill 1063 would have increased the exemption level to businesses from $7,300 to $50,000 worth of equipment or less which would allow more businesses to avoid filing personal property tax schedules. It would have eliminated the tax for about 44,000 businesses statewide. HB 1063 would also have reduced property tax revenue going to local governments by about $13.8 million a year.
The bill, which was sponsored by Rep. Tim Leonard, would have also modified how public utilities valuation is assessed statewide.
Supporters of the tax break believed that the positive benefits of the move would more than offset the reduced revenues because the $13.8 million loss would be spread across the state–since only small businesses would see lower tax bills.
Last year, Colorado legislature passed the omnibus Senate Bill 267, which refunded personal property taxes paid to local governments by all businesses on the first $18,000 worth of property they own.
Those who voted down the bill did so in preference of discussing taxes in the greater context of comprehensive budget reform that would also look at the revenue-limiting Taxpayer’s Bill of Rights, the school-funding mandate of Amendment 23 and the Gallagher Amendment that cuts residential property tax revenues, according to the Denver Business Journal.
“Colorado is a very low-tax state compared to our competitors. However, it is not a low-tax state for business, and that is partly because of the business personal property tax,” said Patrick Boyle, lobbyist for the Colorado Competitive Council. “It is a tax on investment. It is a tax on the tools…that businesses and employees need to be more efficient, to create more wealth and to generate other taxes.”