By Gene Davis, DENVER DAILY NEWS
Candy, soda, Amazon purchases and select software will now be taxed after Gov. Bill Ritter Wednesday signed into law a group of controversial bills that will suspend or eliminate a series of tax credits and exemptions.
Ritter’s signature caps a month-long legislative process that pitted Republicans vs. Democrats in a heated and often bitter partisan battle. Republicans have consistently positioned the nine bills as business-killing measures, while Democrats say they are showing the leadership that’s necessary in the worst fiscal environment since the Great Depression. The nine bills are expected to generate $15.6 million in revenue this fiscal year and $132.6 million next fiscal year.
“Signing these bills was not something I wanted to do,” Ritter said in a statement. “But it was something that was necessary in order to keep the budget balanced and to continue positioning Colorado for a strong and healthy recovery. My sincere thanks to those lawmakers who supported this package of bills and made the difficult but right decision for the future of Colorado.”
However, Republican lawmakers say the right decision by the government would be to cut bureaucracy, not to implement so-called tax hikes on businesses. The GOP this month proposed an alternative budget-balancing plan that includes a .24-percent reduction in state payroll spending for the current fiscal year and a 4.39-percent reduction for next fiscal year. The Republican senators said their budget plan would have eliminated the need for the bills Ritter signed into law Wednesday
“It is appalling that Democrats can’t find a way to balance the budget that doesn’t involve raising taxes by hundreds of millions of dollars,” said a statement issued Wednesday by Sen. Greg Brophy, R-Wray.
Ritter spokesman Evan Dreyer said earlier this month that the Republican budget balancing plan looks like something the lawmakers put together on the back of a cocktail napkin without much thought. He pointed out that Ritter’s administration is reducing personnel costs by more than $100 million. Additionally, the executive branch workforce has shed 1,000 employees since the economy started to decline in 2008, according to Dreyer.
“The Senate Republicans fail to grasp the magnitude of the $2 billion shortfall we’ve already closed and the $1 billion shortfall we still face,” he said earlier this month.
The new taxes signed into law Wednesday include:
— House Bill 1191 will levy the 2.9-percent state sales tax on candy and soda;
— House Bill 1192 will change the so-called loophole created by the 2006 Department of Revenue rule that exempted Internet downloads or load-and-leave software form the state sales tax. Republicans and representatives from a group of software companies say that taxing the “off the shelf” part of “modified off the shelf software” would send high paying jobs out of the state. But supporters say the state tax would merely mirror the tax that most other states implement on such software;
— House Bill 1193 will force out-of-state online businesses that do more than $100,000 in Colorado to either collect the state sales tax or send a letter to customers detailing their purchases and how much sales tax they owe the state.
The tax exemption bills will go into effect March 1.
Distributed by Colorado Capitol Reporters
In other coverage:
The Denver Post: Thousands of businesses will be getting letters over the next few days from the Colorado Department of Revenue with an important message: Sales of items ranging from soda to farm pesticide are no longer tax-free starting as soon as Monday. Gov. Bill Ritter signed nine bills into law Wednesday eliminating or suspending tax exemptions and credits, and six of the bills take effect March 1. A measure that would impose the state’s 2.9 percent sales tax on candy and soda, items that previously had been tax-free like all food purchased for home consumption, goes into effect May 1.
The Durango Herald: Coloradans’ days of shopping tax-free on the Internet are coming to an end. Gov. Bill Ritter on Tuesday signed the so-called Amazon tax and eight other bills that repeal income-tax credits. Ritter said he pushed for the taxes to avoid even deeper cuts to schools and programs for senior citizens.
Associated Press: Gov. Bill Ritter said he had no choice when he signed a package of bills taxing everything from candy and soda to online sales on Wednesday to help close a $1.5 billion shortfall in next year`s $18 billion budget. The new laws are expected to raise about $148 million over the next two years. “Signing these bills was not something I wanted to do, but it was something that was necessary in order to keep the budget balanced and to continue positioning Colorado for a strong and healthy recovery,” said Ritter.
