House panel fixes propane tax error
DENVER — A House committee approved a bill Wednesday designed to repair a goof the Colorado Legislature put into law two years ago over propane taxes.
The mistake occurred in 2013 when the Legislature approved a new law aimed at ensuring that those motorists who use propane to propel their vehicles are paying into the Highway Users Tax Fund, which goes toward repairing and building roads.
But because the law was written too broadly, the tax was being applied to all propane users, said Rep. Diane Mitsch Bush, D-Steamboat Springs.
“This bill is needed to fix some confusion, red tape and especially to end an unintended tax on those who use propane,” she told the House Transportation & Energy Committee, which approved HB1228 unanimously. “The actual intent of (the law) was to ensure that those who power their motor vehicles with special fuels pay their fair share into HUTF. (But) this led the special fuel excise tax to be applied to all propane users, and this created a tax burden when that was not intended.”
Under that law, people who paid the tax but didn’t use the propane to power a vehicle are eligible to get a refund, but that’s become somewhat of an onerous process, said Rep. Jon Becker, R-Fort Morgan, who is sponsoring the measure with Mitsch Bush.
“What this (bill) does is just say, when it’s put into something that used as a special fuel on the road, then it will be taxed,” Becker said. “It’s that simple.”
Under the current law, maintained in the bill, that excise tax is equal to 5 cents a gallon this year, increasing to 9 cents a gallon by 2017.
The measure heads to the House Finance Committee next. It’s Senate sponsor is Sen. Ray Scott, R-Grand Junction.
In an unrelated matter, the House approved a routine supplemental bill Wednesday that Democrats had tried to use to allocate more money on helping the Colorado Bureau of Investigations reduce wait times for conceal-carry permit background checks.
A dispute over the measure started last month when Republicans in the Colorado Senate declined to spend the money on shortening those wait times, saying it was not necessary.
Democrats in the House tried to tack that funding onto the bill, but receded from that position because of other needed funding in it, including money to help CBI reduce a backlog in rape-test kits.
The measure now heads to Gov. John Hickenlooper for his signature.