An effort to phase out Colorado’s much-reviled tax on business equipment failed again this year for the same reason it has in the past — there’s no money to reimburse local governments for lost funds.
“I’m open to this, but no one is saying simultaneously we need a replacement tax,” said Sen. Bob Bacon, D-Fort Collins.
“Until we find the political will” to do that, Bacon said, he couldn’t support a bill phasing the tax out.
Senate Bill 85, by Sen. Mark Scheffel, R-Parker, failed Friday on a tie vote that crossed party lines in the Senate Appropriations Committee.
The measure, as amended, would have phased out the business personal-property tax over a 40-year period starting in 2011.
Passing the bill, Scheffel said, would have signaled that Colorado is “open for business.”
The tax is separate from the property tax that businesses pay for land and buildings.
Any business that owns property worth more than $4,000 is assessed the business personal-property tax, which is 29 percent of the market value of the equipment, ranging from computers to heavy equipment.
Business owners have complained for years the tax is unfair. Lawmakers agree, but haven’t been clear on how to resolve the problem, even in years when the state had a $1 billion surplus.
“I’ve been told ever so many times by ever so many people that they ran this bill,” Scheffel said.
Sen. Moe Keller, D-Wheat Ridge, said part of the problem is that the tax funds local governments and school districts. Under the constitution, the state would be required to backfill the money for schools, and it can’t afford to do that, she said.
“I think the front-end risk is minimal,” said Sen. Mike Kopp, R-Littleton.
Counties with power plants, mines and railroads are the most dependent on the tax because of the millions it generates for local government.
The business personal-property tax accounts for 63 percent of Sedgwick County’s total county revenue, and 48 percent of Moffat’s, according to legislative figures. But it accounts for only 9 percent of Jefferson County’s total county revenues.
Lynn Bartels: 303-954-5327 or lbartels@denverpost.com
