One week after lawmakers eliminated a slew of tax exemptions, a House committee on Tuesday approved a new one — thanks to a Democratic lawmaker’s vote.
The bill, sponsored by Rep. Larry Liston, R-Colorado Springs, would phase in a sales-tax exemption on equipment worth more than $500 that is purchased by telecommunications companies. The tax exemption would be worth 25 percent of the purchase price of the machinery in 2012-13, the first year it takes effect, and, according to legislative analysts, would cost the state at least $1.8 million.
By 2015-16, when the tax exemption is fully phased in, the bill would cost the state at least $7.9 million a year, estimates showed.
The House Finance Committee approved House Bill 1289 on a 6-5 vote, with Rep. Jerry Frangas of Denver casting the lone Democratic vote in favor.
Frangas said he liked the fact that the exemption didn’t take effect for several years, adding that he thought the bill would have positive economic consequences sooner than that.
But Frangas’ vote bewildered Democrats and Republicans.
Rep. Joel Judd, D-Denver, the chairman of the House Finance Committee, said he was surprised by Frangas’ vote.
“I think it (the bill) spends money we don’t have,” Judd said. “I consider it a special-interest giveaway.”
That was a sentiment a number of Democrats, who control both houses, expressed weeks earlier when they voted to eliminate or suspend more than $100 million in tax exemptions for various industries. The bills await the signature of Gov. Bill Ritter, a Democrat.
Among those supporting the bills to end tax exemptions for products that included soda, candy, software and pesticides was Frangas.
Frangas said he believed the tax exemptions he voted to cut, unlike the one he supported Tuesday, would “have little or no impact on job retention.”
Republicans, though, said there was a disconnect in that thinking.
“Democrat economic policy is completely bipolar,” said Rep. Cory Gardner, R-Yuma.
Liston’s bill could face a tough road, though. It heads next to the House Appropriations Committee, where several Democrats said it likely will die.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
