We find ourselves in the middle of one of the greatest wealth transfer periods of all time. Those with wealth must decide whether they want to make transfers, and if they do, they must decide how much, to whom, when and in what structure?
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House Bill 1279, sponsored by Reps. Dave Young, D-Greeley, and Dianne Primavera, D-Broomfield, creates a tax credit for small businesses with as much as $25,000 business personal property value annually. The measure passed the House Finance Committee by an 11-2 vote Wednesday.
Governments annually tax businesses’ equipment, including machinery, furniture, security devices, computers and signs. Lawmakers estimate that about two thirds of small businesses in Colorado have less than $25,000 in business personal property, making them eligible for the credit.
“This is an important bill for small businesses,” Young said.
The tax credit is refundable, so any portion of the credit exceeding a taxpayer’s income tax liability would be refunded. The amount of the credit claimed locally will vary depending on mill levies in various local tax districts, Young said.
The bill would reduce the state general fund by as much as $82.7 million through fiscal 2018 assuming that every qualifying business claims the credit, according to a fiscal analysis by the Colorado Legislative Council.
The first $7,000 in actual value of business personal property is exempt from property tax under current law.
Lawmakers have introduced multiple bills to reduce the tax through the years, though only a few have passed.
Sarah MacQuiddy, president of the Greeley Chamber of Commerce, said the chamber supported the bill, but it wants the tax repealed one day.
“Any small incremental steps we can take, that’s great,” she said. But, “It’s not enough: We would hope for larger leaps instead of smaller steps.”
Also supporting the measure are the Colorado Association of Commerce & Industry, Denver Metro Chamber, South Metro Denver Chamber, Northern Colorado Legislative Alliance, National Federation of Independent Business, Colorado Municipal League, Colorado Counties Inc., Economic Development Council of Colorado and Early Childhood Education Association of Colorado.