133-year-old business tax facing phaseout
DENVER — Voting to end a revenue stream that has been flowing since statehood in 1876, the state Senate on Monday began the process of dismantling Colorado’s business personal property tax.
When private citizens buy a desk, a computer or any other equipment, they pay sales tax and that’s the end of it. All businesses, regardless of size, are required to pay tax on their non-exempt equipment.
Senate Bill 85, sponsored by Sen. Mark Scheffel, R-Parker, would phase out the tax over 40 years, beginning in 2011. The bill, which barely survived committee hearings earlier in the session, received initial voice-vote approval in the Senate on Monday.
The nonpartisan Legislative Council estimated the phaseout would reduce state revenue by $2.2 million in its first year and $350 million a year in 2047, when the phaseout would be complete.
Democrats who opposed the bill said that unless some substitute revenue was found, phasing out the business personal property tax would hurt local governments, especially school districts, which get a slice of that pie.
Scheffel said his bill would end an onerous tax that has scared businesses away from Colorado. But Sen. Moe Keller, D-Wheat Ridge, defended the tax, saying 40 states have similar taxes. “It is not an economic disadvantage when the other states have it as well,” she said.
Sen. Morgan Carroll, D-Aurora, argued that the phaseout should be coupled with some new compensatory revenue-producer.
“Doing one half without the other really is gambling with Colorado’s future,” she said. “We create a problem in Senate Bill 85, and last I checked we had no shortage of problems.”
Scheffel was unperturbed. “We’ll have a 40-year period to adjust to this,” he said.
Scheffel’s district includes Teller County as well as Douglas. The Pikes Peak region’s other three Republican senators backed the bill, as did Sen. John Morse, D-Colorado Springs.
Opponents managed to tack on an amendment to create a committee to further study to the tax phaseout.
Contact the writer: 476-1654
