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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We have long argued for elimination of Colorado’s business personal-property tax, which taxes businesses on the value of personal property – furniture, fixtures and other equipment. The tax is hated by the state’s business community, which wonders, rightly, how voters would feel if they were taxed on the value of their own personal property. (Hint: They wouldn’t like it much.)
But somehow, it’s been considered OK to impose just such a tax on the business community, creating an accounting and financial burden and discouraging expansion or upgrades.
Efforts to kill the tax have failed repeatedly in the General Assembly over the years, as legislators fretted over how to make up what would be a shortfall in revenue. When the economy was in the doldrums, eliminating the tax was a pipe dream. Today, as the economy improves, it’s still a tough sell.
While the tax has not been eliminated, a bill signed into law by Gov. John Hickenlooper does provide some relief to small businesses. House Bill 1279, sponsored by Reps. Dave Young, D-Greeley, and Dianne Primavera, D-Broomfield, provides for a tax credit of the full amount of personal property tax paid for businesses owning from $7,001 to $15,000 in equipment, an amount that will be adjusted annually for inflation. (Those with $7,000 or less in such property already are exempt.)
The bill was sponsored in the state Senate by Sens. Rollie Heath, D-Boulder, and Mark Scheffel, R-Parker. It will cost the state about $5.5 million in revenue per year for five years.
Thankfully, the bill passed overwhelmingly in both the House and Senate – but it did not go far enough: A full repeal of the business personal property tax remains our strong desire.
But it’s a start.