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 October 8, 1999

Business personal property tax archaic barrier

For the first time ever, Colorado business taxpayers are receiving some tax relief for the onerous business personal property tax that they pay to local governments.

The passage of HB 1311 by the Colorado General Assembly and Gov. Bill Owens’ signing of the bill is a long overdue recognition that the business personal property tax (BPPT) is a severe drag on the economic engine of our state.

HB 1311 will provide up to $100 million in refunds this year to businesses from the TABOR surplus. The deadline for firms to apply for the refunds was Aug. 31. HB 1311, however, only represents the first step in a long-term effort by local chambers of commerce and Colorado Association of Commerce and Industry (CACI) to eliminate the BPPT.

Many employers across the state, according to a recent CACI study, believe the BPPT to be the most inequitable, counterproductive tax in Colorado’s tax system. Although the BPPT amounts to more than $525 million per year, most of the burden falls on the companies in a few industries that heavily invest in machinery and equipment.

We have long recognized that primary jobs are, or should be, our focus because of their importance in economic vitality for Colorado.

But the nature of primary jobs is changing. Manufacturing is no longer a smokestack industry. Rather, it has become a technology-rich, capital-intensive endeavor for those manufacturers who must be globally competitive. Information technology, biotechnology and telecommunications are major growth industries for primary jobs. These companies are our best hope for long-term prosperity and are the economic base that we should be trying to recruit to, and retain in, Colorado.

Capital investments by these companies enable them to increase productivity in a global economy and, in turn, earn greater profits and thus pay higher wages to their employees, which allows workers and their families to attain a higher standard of living.

While the nature of our economy has changed, Colorado’s tax code has not. We are left with a disconnect — a tax policy that penalizes the very capital investment we must have to survive in an increasingly competitive world.

In Colorado, the ultimate elimination of this tax is the long-term objective of the local chambers of commerce and CACI. But elimination of the BPPT means that other revenue sources will have to be found to replace the BPPT revenues that go to local governments and schools.

City and county governments, local schools and special taxing districts are, in some instances, heavily dependent on BPPT revenues to fund services that the business community considers essential infrastructure for commerce.

The challenge for Colorado will be, therefore, to design a major tax reform package that eliminates the BPPT without decimating revenue streams to local governments and schools and which, of course, is appealing to voters who must approve the concept.

Many contend that a solution is politically impracticable. We say that “no solution” is economically impracticable. Colorado must be strategic, which means comprehensive tax reform that encourages capital investment in the primary industry sectors, which in turn promise prosperity for future generations of Colorado citizens.

Sam Cassidy is the president and chief executive of the Colorado Association of Commerce & Industry.

For the first time ever, Colorado business taxpayers are receiving some tax relief for the onerous business personal property tax that they pay to local governments.

The passage of HB 1311 by the Colorado General Assembly and Gov. Bill Owens’ signing of the bill is a long overdue recognition that the business personal property tax (BPPT) is a severe drag on the economic engine of our state.

HB 1311 will provide up to $100 million in refunds this year to businesses from the TABOR surplus. The deadline for firms to apply for the refunds was Aug. 31. HB 1311, however, only represents…

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