Vail Valley Partnership is the regional chamber of commerce, with over 900 members throughout Eagle County who collectively represent over 80% of the local workforce. We are dedicated to the economic vitality of the valley, and as such are opposed to legislation that negatively impacts our business community and our economic recovery.
I write today to express my opposition to House Bill 1420. Just when employers need relief most, this bill complicates Colorado’s tax laws and drives up the cost of doing business. This will slow the economic recovery for Colorado, particularly for the hundreds of thousands who are searching for work today.
It makes no sense to close a budget gap by slowing the very engine that puts Coloradans to work and in return generates tax revenue. But, that is exactly what this legislation will do.
House Bill 1420 will:
– Remove the 2017 deduction for pass-through, impacting nearly every small business in the state of Colorado, including sole proprietors. The deduction was implemented to ensure more parity between corporate tax rates and those for small businesses. Many sole proprietors, S corps and LLCs have pass-through income. Changes like these in business tax credits hurt them the most.
– Cap net operating loss deductions, discouraging innovation and making Colorado less attractive for startup businesses.
– Drive up prices for consumers by removing sales tax exemptions on the supplies needed for manufacturing goods.
– Offset the benefits of other state assistance being proposed this legislative session, such as the CLIMBER Act.
– Dedicate the bulk of funding to the general fund, not education. Less than half, $750 million, will go to education. Then after four years, none of the revenue is committed to education.
– Come with a cost. To eliminate those tax breaks from our tax system, the Colorado Department of Revenue anticipates it will have to spend $4 million a year for the next four years to hire 45 full-time staff.
– Repeal the tax breaks permanently. When legislators repealed tax breaks during the Great Recession in 2010, the repeal was temporary. However, House Bill 1420 repeals many tax breaks permanently.
History has shown us that our state budget is largest when the economy is strong and unemployment is low. Just think back to the last two or three years. If we want to solve our budget challenges, we have to get the economy back on track.
House Bill 1420 would also remove the tax relief that small businesses need to hire or retain employees, and it would make Colorado less attractive to employers who are considering bringing jobs here, delaying our economic recovery. We need to focus on getting the more than 517,000 people who have filed for unemployment back to work. That means not putting roadblocks in front of the businesses trying to hire them.
I urge you to vote no on House Bill 1420. It puts Coloradans’ jobs at risk, slows economic recovery and hurts small businesses. As a business community, we need you to work with us at this time, not against us by adding costs and burdens that we can’t cover.
Sincerely,
Vail Valley Partnership