Business owners won’t get tax relief this year

By Ed Sealover

Colorado Springs Gazette

4/30/07

      DENVER - Small-business owners anxious for relief from the business personal property tax will have to wait at least one more year.
      The Senate State, Veterans and Military Affairs Committee on Monday killed a bill that would have exempted nearly 30,000 businesses from paying the tax. The measure passed through the House last week without a dissenting vote.

      Monday, though, Sen. Sue Windels, D-Arvada, said she is concerned about the money the state would have to pay to cover losses by local school districts from the tax cut, even if the amount was expected to be just $43,960 next year.

      And Sen. Chris Romer, D-Denver, said that while he supports cutting business taxes, this bill could hurt larger efforts to reform business tax law. He said he hopes that business organizations that pushed for this bill will work even harder for a tax cut that benefits both small and large businesses.

      “It’s not just about this bill. It’s about keeping the coalition together to do bigger things,” Romer said before siding with the 3-1 majority to kill House Bill 1325.

      Companies pay the business personal property tax annually on the value of their equipment, from vehicles and machinery to desks and computers. John Brackney, president of the South Metro Denver Chamber of Commerce, said the tax is as hated by businesses as the former personal property tax on such things as cars and televisions was hated by state residents.

      Since 1996, businesses that own $2,500 or less of personal property have been exempted from paying the tax. The new measure would have increased that exemption incrementally to $7,000 during the next five years.

      Sponsoring Sen. Steve Ward, R-Littleton, emphasized that would cost the state only $1.8 million when fully implemented. Thirty percent of all state businesses would have been exempted. And the $600 million the tax generates annually, largely from big businesses, would have been reduced by only 0.33 percent.

      Ward added that because of the lengthy reporting requirements of the tax, the cost of compliance exceeds the tax amount for many businesses, and it costs some counties more to administer the tax than they bring in from revenues.

      “I hate this tax worse than any tax we have in the state or in the United States,” said Sen. Ron May, R-Colorado Springs, who was the committee’s only backer of the bill.

      Despite such impassioned talk, the measure may have been killed somewhat by apathy. Romer said the Colorado Association of Commerce and Industry, arguably the state’s leading business organization, had recently moved from supporting the measure to remaining neutral on it because it felt changes were needed to benefit large businesses as well.