How do the revised rules in the Bipartisan Budget Act of 2015 affect you and your business?
The Loveland Republican’s bill marks the latest attempt by lawmakers to reduce the tax. Between 2003 through 2012, Colorado lawmakers have introduced 29 bills aimed at altering the tax, according to the National Conference of State Legislatures.
Four of those bills succeeded. Notably, a bill passed last year authorizes Colorado counties, cities or special districts to negotiate an incentive payment or credit with businesses that establish a new facility. Avago Technologies will take advantage of the credit on equipment bought by the company for 10 years as part of its expansion in Fort Collins.
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County commissioners would likely see a jump in requests for exemptions if DelGrosso’s bill were to pass.
Commissioners may have to “develop their own criteria to decide when to give it and when not to,” said Bob Keister, Larimer County budget manager. “That would have to be a whole new policy development.”
DelGrosso called the tax one of the “most-hated” by businesses.
“We want to give the county one more tool to go to a business like Woodward and say, ‘Here’s one more tool we could potentially offer,” DelGrosso said.
Fort Collins-based energy and aerospace company Woodward announced last year that it was considering several possible locations for a new headquarters. It has submitted building plans to the city Planning and Zoning Board for redevelopment of the Link-N-Greens golf course, but has not settled on the site.
Under DelGrosso’s bill, companies and counties presumably would negotiate an exemption to the tax if a company was considering moving outside Colorado, said Sandra Solin, a lobbyist for the Northern Colorado Legislative Alliance.
Larimer County “had limited tools to retain (Woodward) from a business personal property tax perspective,” and because the company “is highly capital-intensive, their tax liability is significant,” she said.
The tax accounts for 7.5 percent of the Larimer County’s budget. Woodward, which ranks No. 7 in terms of its business personal property tax payment to the county, contributed $139,000 in 2011, said Ron Kerr of the Larimer County Assessor’s Department.
In all, businesses paid the county more than $6.9 million in personal property tax in 2011. The total assessed value of their personal property amounted to almost $308 million.
Opposition to DelGrosso’s proposal may not amount to much.
Sen. John Kefalas, D-Fort Collins, has supported two business personal property tax bills during his seven years in the Legislature. The bills passed with bipartisan support, he said.
“The issue with business personal property tax, a lot of people agree that it’s very difficult especially for small businesses to deal with that,” Kefalas said. “It’s kind of a peculiar thing that we have in Colorado.”
On the other hand, counties have trouble replacing the lost revenue from personal property tax exemptions, he said. Kefalas wasn’t sure yet whether he would support DelGrosso’s bill because it hasn’t been introduced.
DelGrosso believes his bill will garner bipartisan support because it “piggybacks” on last year’s bill, he said.
A key difference between DelGrosso’s and last year’s bill is that a business does not have to expand or relocate for a county to waive the personal property tax.
Additionally, the county also can choose what percentage of the tax it wants to waive for a company. It also can choose not to exempt companies from the tax.