Colorado’s Democratic governor proposes ending property taxes on business equipment
Colorado’s Democratic Gov. Jared Polis presented his State of the State address this week. In the speech, Polis proposed to make his state the latest to scrap personal property taxes on business equipment.
A proposal moving in the same general direction is being considered this session in Montana, where the exemption would be doubled to $200,000, meaning businesses that don’t own that much equipment wouldn’t have to file for the tax.
Currently in Nebraska, there is no personal property tax exemption. The previous exemption applied only to the first $10,000 of property value, but was eliminated as part of last year’s new property tax relief program. Unlike the property tax on real estate, where the county assessor calculates how much your property is worth, businesses must submit a tax return to counties each year with the value of every piece of equipment they own that has not yet depreciated past its taxable age. That taxable value then has property tax levied on it from every local taxing subdivision, just like homes, buildings, and farmland.
Colorado’s chapter of the National Federation of Independent Business praised their governor’s proposal for eliminating the tax, telling media outlets the change would provide relief to businesses that were among the hardest hit by the pandemic:
“For too long, this has been a highly annoying and needless paperwork heartache for small business owners,” Gagliardi said. “I don’t think local governments are going to suffer because of the income they’ll lose over some restauranteur’s no longer needing to calculate the depreciation on his 10-year-old potato peeler.”
This latest effort comes after Colorado voters approved a cut to the state’s flat personal and corporate income taxes at the polls in November, which Polis also supported. In his State of the State speech, Polis called the package of tax changes “the most substantial and comprehensive tax relief in decades for hardworking Coloradans and small businesses.”
“By eliminating the business personal property tax, we’ll save small businesses time, and money, and let them focus on what matters — their customers, their service, their products, competing in the marketplace,” Polis told state lawmakers.
Colorado has become much bluer as its population essentially doubled in recent decades, but the state’s political landscape is still competitive. Its current Democratic leaders seem to recognize the need to reach out on popular economic issues, and that the state’s current formula has won them economic opportunities at the expense of higher-tax states like California, and even ostensibly conservative states like Nebraska.
Of course, read any comments section on a Colorado-related article and you’ll find Nebraskans quick to point to marijuana as the reason for anything tax-related the state does. While the additional revenues certainly don’t hurt the state’s finances, the lead Colorado holds over Nebraska on tax policy started long before recreational marijuana legalization became a mainstream position or a state law anywhere.
It probably doesn’t hurt that Jared Polis also has a solid background in entrepreneurship and likely knows that issues like taxes do matter to people trying to start or run businesses. And with the Colorado gubernatorial election coming up next year, Polis may want to run again, or at least see his party hang onto the office he now holds, along with its legislative majority.
It may frustrate some of his party allies, but by governing on issues like eliminating personal property taxes, Polis provides a good example of a Democrat who is likely to get more done on issues progressives care about, while also advancing changes that voters of all viewpoints see as removing barriers for workers, entrepreneurs, and taxpayers.