Limiting tax credit on large business wins first approval
A measure to place a three-year cap on tax credits that large businesses located inside enterprise zones can claim won preliminary approval in the Colorado House on Monday.
House Bill 1200 would cap those credits to $250,000 a year, which means it affects companies that have more than $5 million in annual profits, said Rep. Dickey Lee Hullinghorst, D-Niwot.
As a result, only 30 of the 5,500 businesses in enterprise zones around the state would be affected, she said.
Regardless, Republicans said those businesses need the credit or they will end up laying off more Colorado workers. They said the bill was just one more imposition on businesses.
“We’ve seen a legislative session where taxes have been increased on businesses,” said Rep. Cory Gardner, R-Yuma. “We’ve seen fees increased. We’ve seen an economy that still isn’t recovering. Enterprise zones do create jobs. If the passage of this bill does indeed occur, we’re simply pushing a boulder down a mountain that’s already falling.”
Democrats, however, said that of the $75 million the state gives away in credits each year, this affects less than $12 million.
Rep. Jack Pommer, D-Boulder, said Qwest Communications International suggested the state impose a sales tax on food rather than drop the credit.
Otherwise, the telecommunications company would be forced to lay off workers.
Pommer criticized Qwest for making that suggestion, saying it laid off workers long before the Legislature considered suspending the credit. Last week, the Denver-based company announced its sale to Louisiana-based Century Tel Inc.
“If you want to defend the millions and millions of dollars we gave Qwest so that Qwest could lay off 8,500 people, pay their CEO $12 million and sell their company to an out-of-state firm ... tell me why that was a good investment of hard-earned Colorado dollars,” Pommer said.