A House committee Tuesday approved a bill that would take some of the sting out of what many small businesses described as the most irritating state tax on the books.
Businesses, especially small ones, have complained for years about the business personal-property tax, which applies to equipment, furnishings and machinery. Every water cooler, computer and office chair is subject to the tax, and calculating what is owed and how much property has depreciated is a maddening undertaking, business owners complain.
“It’s a very complicated, silly tax that nobody can make sense of,” said Rep. Joe Rice, D-Littleton, the sponsor of the bill.
Tony Gagliardi, director of the Colorado branch of the National Federal of Independent Businesses, said many small businesses have to hire people just to figure out how much personal-property tax they owe.
“It’s like if you bought a new living-room set, and after you paid the sales tax, we’re going to tax you every year for that living-room set,” Gagliardi said.
Rice’s legislation — which would be phased in over three years — would allow business owners to exempt up to $7,000 of business personal property, raising the current exemption of $2,500. The exemption ultimately would allow some 30,000 businesses to avoid paying the tax.
It would cost the state $178,000 in the first year of the phase-in, and $638,000 when fully phased in by the third year. The House Finance Committee passed the legislation, House Bill 1225, unanimously, and it heads to the full House.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
