Official drops filing fee to lure outside firms
Secretary of state says move will send message that Colorado is a business-friendly state
Secretary of State Scott Gessler hopes to send a message to out-of-state companies that Colorado is a good place to do business.
That’s why the Republican temporarily is lowering the foreign-business filing fee his office charges non-Colorado companies.
The state charges $125 to out-of-state firms to do business in Colorado. For three months, starting Sept. 1, Gessler will drop that fee to $1.
“My aim with this initiative is to send a message that Colorado is making bold strides to create a more user-friendly, intuitive system that saves our customers time and money, while keeping our fees among the lowest in the country,” he said.
A check of the foreign company filing fees for all 50 states, however, shows Colorado already is among the lowest.
Currently, 30 states charge foreign companies between $100 and $150 to register in those states. Three states charge less than $50, with Arizona coming in at the bottom at $22. Seventeen states charge twice as much as Colorado or more, with Texas being the highest at $750.
Rep. Mark Ferrandino, D-Denver and a ranking member of the Legislature’s Joint Budget Committee, said he understands what Gessler is trying to say by lowering the fee, but he questioned what good it will do.
Out-of-state companies don’t decide to do business in a state based on its foreign-corporation filing fees, and certainly not when it’s already among the lowest in the nation, Ferrandino said.
He said Gessler seems motivated by a false premise, that Colorado’s fees are driving businesses away.
“If you look at most of the reports from independent sources like CNBC and Forbes, we’re always in the top five or six states in the country in terms of business friendliness,” Ferrandino said. “A lot of the problems companies have is not with our tax and fee system, it’s the lack of funding for education, the lack of support for higher education and a bad transportation system. Those are the things they are looking at.”
He said the state could reduce all of its fees to zero, and it still wouldn’t help.
“If we don’t have a population with a trained workforce or a transportation system that can get goods to market, it doesn’t matter what those fees are,” he said.
As a member of the legislative panel that writes the state’s annual spending plan, including that for the Secretary of State’s Office, Ferrandino said Gessler better be able to afford cutting that fee.
Gessler says he can.
His office is almost exclusively funded through business filing fees, and only expects to lose about $120,000 in revenue by cutting it for out-of-state ones seeking to do business here, office spokesman Rich Coolidge said, adding 44,456 foreign companies already are registered with the state.
Last fiscal year, the state brought in about $576,000 in foreign filing fees. Overall, it gets about $17 million a year from all fees, Coolidge said.