Unfair sales-and-use tax system deserves to be tossed out door

Fort Collins city officials should move quickly to rework the city’s unfair sales and use tax. The outlook, thankfully, appears good.

City Manager John Fischbach has proposed tiered rates for use taxes paid by the area’s manufacturers. The proposal will be considered at a study session of the City Council Jan. 9. The proposal comes in the midst of a communitywide debate over how much tax should be paid by employers who create so-called “primary” jobs -essentially, those that earn higher-than-average wages and create additional spinoff jobs.

The tax was at the heart of Hyundai America’s decision to bypass Fort Collins for a $1.3 billion computer-chip fabrication plant. And the city’s willingness to consider changing the tax may well have tilted momentum in Fort Collins’ favor when Hyundai subsidiary Symbios Logic Inc. decided to remain in Fort Collins.

As Fischbach makes his proposal, Fort Collins’ business leaders have proposed changes of their own to the 3 percent tax. Fort Collins Inc. and the Northern Colorado Manufacturers Council proposed that the tax be capped at $1,000 per employee, but Fischbach takes a different approach. His tiered system would subject the first $5 million in purchases to a 1 percent tax rate, purchases from $5 million to $15 million to a 2 percent rate and purchases from $15 million to $50 million to a 3 percent rate. Purchases of more than $50 million would be subject to no taxes.

While the mechanics may differ, the goal remains the same: Relax the tax burden on manufacturers with a fair, equitable policy. That the debate now is how, not whether, to restructure the tax is a victory in itself. But greater victories lie ahead.

City officials undoubtedly are aware that while the tax pushes away some new business – ala Hyundai – it also might push existing business to relocate. Symbios wasn’t the first area manufacturer to consider moving to friendlier taxation climes, and it wouldn’t have been the last.

Fort Collins officials have a chance to make the use-tax debate a distant memory. Better that the issue fades from view than we lose one more company to bad policy.

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The Northern Colorado Business Report is getting caught in the Web. Type your way onto the Internet at http://www.ncbr.com, and you’ll encounter the Business Report, complete with information about the paper and the latest in business news from around Northern Colorado. We’ll update the Web page with new stories from our paper every month, and it will serve as an important resource for anyone seeking to learn about Northern Colorado business.

We hope eventually to include linkages to the Web pages of area chambers of commerce, city and county governments and, of course, area businesses.Companies advertising in our newspaper’s Internet and World Wide Web directories, for example, will be granted free linkages from our Web page to theirs. We’ll also be linked to the home page of our sister paper, The Boulder County Business Report.

If you haven’t made it onto the World Wide Web – either as an Internet sightseer or a company seeking to market itself – you might want to check it out. The Web is the graphic-oriented element of the Internet, where companies display information, graphics and photographs relevant to their business. We believe the technology will continue to evolve, and we intend to be part of that evolution.

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As promised, the Business Report has begun one-half of its foray into radio. Catch our business news update daily at 7:12 a.m. on KCOL 1410 AM.

Also as promised, we’ll soon be up and running on KFKA 1310 AM in Greeley. We’ll provide local business news and stock-market information, including an expanded Northern Colorado Business Report Index. With the help of Nordby International, the Business Report indexes the stock of about 66 public companies with local operations, creating the region’s best gauge of the local economy. The index has run on a monthly basis in our newspaper, but we’ll update it daily for radio.

Christopher Wood can be reached at (970) 221-5400, (970) 356-1683, or via e-mail at ncbr@aol.com. The Business Report’s Web page is at http://www.ncbr.com.