Colorado Senate Proposes Legislative Package That Would Revise State Tax Code | Colorado

(The Center Square) – The Colorado Senate Finance Committee on Wednesday evening introduced two bills that combine to overhaul the state’s tax code – bills that have drawn criticism from businesses and groups of the free market.

Both bills advanced by a 4-3 vote. Republican Senators Paul Lundeen, R-Monument, Ray Scott, R-Grand Junction and Dennis Hisey, R-Fountain voted against the package.

Bill 21-1311 expand the child tax credit by limiting several common tax deductions for businesses. Some deductions that the ax would get include food and drink expenses at restaurants and capital gains tax limits.

According to analysis of the bill by staff of the Legislative Council, a non-partisan branch of the General Assembly, the bill could raise up to $ 57 million by fiscal year 2023.

In addition, Bill 21-1312 revamp the state property tax code by adjusting state insurance premiums, property, sales and use taxes, and severance pay.

Two examples include the phasing out of exemptions for coal-fired power plants and the requirement for net deductions for oil and gas installations which must be determined by the gross income of the business.

A tax note for HB21-1312, that could increase state revenue to $ 145 million by next year.

Both bills are sponsored by Senators Chris Hansen, D-Denver and Dominick Moreno, D-Commerce City, and Representatives Mike Weissman, D-Aurora and Emily Sirota, D-Denver.

“The pandemic has both exposed and exacerbated existing inequalities and created new ones,” Moreno said in a statement. “As we recover, we can either continue to operate as usual, with decades-old special interest tax loopholes benefiting a handful of entrenched interests, or we can reform our code.” tax and raising hard-working families, small businesses and the most vulnerable Coloradans. The choice is clear.

Critics have argued that the plan puts tax dollars in the wrong hands. Senator Paul Lundeen, R-Monument, sympathized with the legislative intent but argued for creating a more revenue neutral package that would put more money in the pockets of Coloradian workers, not in the coffers of the ‘State.

“It is a way of keeping more money in the active economy rather than in the state savings account,” he said during the committee hearing.

Some business owners are also opposed to the plan. Kelly Brough, CEO of the Denver Chamber of Commerce, said in a statement that the impact on business sales, use and property taxes is too heavy for small businesses at a time when they need it most. local support.

“This legislation will unnecessarily complicate Colorado state tax returns for multi-state corporations, negatively impact nonprofits, restaurants, and college economies, and dissociate Colorado from federal tax cuts aimed at helping small businesses, ”she said. in a report.

Chris Brown, vice president of policy and research at the Common Sense Institute, a free enterprise think tank, said it was important to ask why lawmakers see tax increases as necessary.

Earlier this week, Democrats unveiled their “plan” to spend $ 3.8 billion in federal stimulus dollars that Colorado would receive if the US jobs plan went through Congress. However, details of the plan were scarce.

At the same time, an analysis of the State’s tax revenues by Pew Trusts, a non-partisan think tank, found that Colorado’s tax revenue had returned to pre-pandemic levels.

“This is a net tax increase of about $ 200 million from an economic recovery with no clear reason for needing additional state revenue,” Brown told The Center Square in an emailed statement. “State taxes have more than clawed back and state and local governments still have billions of federal dollars to spend. “

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