Colorado lawmakers back phasing out business tax |

Colorado lawmakers back phasing out business tax

Colleen SlevinThe Associated PressAspen, CO Colorado

DENVER A plan to phase out an unpopular Colorado business tax got bipartisan support Monday in its first hearing at the state Capitol.The Senate Business, Labor & Technology Committee voted 6-1 to back the measure (Senate Bill 85). Next it must get the approval of two other committees, which will take a closer look at the millions of dollars it will cost the state to get rid of the tax over 20 years.Under the business personal property tax, companies must calculate the value of their equipment, from office furniture and computers to pipelines, and pay a tax on that amount each year. Lawmakers have resisted persistent calls to get rid of the tax because it brings in about $800 million a year to local governments and school districts.Sen. Mark Scheffel, R-Parker, has proposed phasing out the tax over 20 years to give cities and counties time to adjust to that loss of revenue. Each year an increasing amount of equipment would be exempt from the tax until 2027, when all of it would be.The state would have to backfill the amount lost to school districts, which would be an estimated $1.3 million in the first year. In the 20th year, the state would have to come up with $202 million to replace the lost revenue.Coming up with a way to make up that lost revenue has killed previous attempts to get rid of the tax. But this year, Senate President Peter Groff, D-Denver, said he was interested in considering the measure as lawmakers look for new ways to boost the economy and create jobs.”I think it’s really the economy that is driving it,” Scheffel said of support for the bill.However, because of the $1 billion budget shortfall the state is facing between this year and next year, the bill may not end up doing anything to create jobs in the near term. Scheffel said he may ask to delay the start of the phase-out by a year or two because the state would have to find money to give to school districts. He said another option is exempting only new equipment. Equipment already on the tax rolls would stay there.

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