Hickenlooper merits praise for repealing software tax

A positive step.

Gov. John Hickenlooper and the Colorado General Assembly deserve praise for repealing a sales and use tax on nonpackaged computer software purchased by Colorado companies. The governor signed House Bill 1293 into law June 7, and the measure becomes law in July 2012.

House Republican Majority Leader Amy Stephens, R-Monument, served as prime sponsor of the bill, along with Sen. Cheri Jahn, D-Wheat Ridge; Rep. Carole Murray, R-Castle Rock; and Sen. Linda Newell, D-Littleton.

Exemption of software purchased online from the state sales-and-use tax was eliminated in 2010 under the administration of former governor Bill Ritter, who sought to balance an out-of-kilter state budget.

While difficult decisions are necessary in difficult times, we opposed the measure because of the damage it would have done to one of Colorado’s most important industries and the economy overall.

Officials from the software industry, including representatives from the Colorado Software & Internet Association, argued that repealing the exemption – first put in place under former governor Bill Owens – made the state’s software companies less competitive.

We agreed, as did companies in the Boulder Valley, which boasts a wealth of software developers. They lobbied hard to maintain the exemption, and its repeal last year prompted Amazon.com to eliminate its affiliates program in Colorado.

Now, after a year of lobbying, arguing and presentation of facts, the industry has emerged victorious. Hickenlooper and the General Assembly have listened. The end result is that software companies and consumers are expected to save more than $21 million in the next fiscal year by having the exemption restored.

With the restoration of the exemption, Colorado has stepped back from the brink. The tax was a job-killing measure – high-paying jobs at that. Although balancing the state budget will continue to be a challenge, measures that detract from economic growth will only make the budget problems worse, as tax revenues decline.

So, thank you, Governor and legislators, for listening to reason.

Now, about that business personal-property tax …

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