Why Punish Businesses For The State’s Budget Mismanagement?

Today, we start the week with HB26-1221, 1222, and 1223 in the Finance Committee. Combined, these bills carry a financial impact of about $1.25 billion during TABOR (Taxpayer Bill of Rights) surplus years. In other words, taxpayers will lose out on refunds. Businesses in Colorado can barely come up for air before the Legislature adds more costs and burdens. Who could ever guess why businesses might leave the 6th most regulated state in the nation?

There are numerous detrimental aspects in the legislation to small businesses and startup companies. HB26-1221 removes state level alternative minimum tax credit (AMT) from the federal AMT. The net result is a higher tax, and contributing to the state producing a business unfriendly environment. Common Sense Institute found that Over most of the last two decades, fee revenue has grown faster than the state’s General Fund. For every $1 increase in General Fund revenue per Coloradan since 2008, total fee collections per Coloradan rose by $2.69.

In addition, HB26-1221 cuts in half the carry forward period for net operating business losses. This means businesses that sustain losses in their first few years or in bad years such as COVID, will have less than 10 years to write off their losses, changing from the current 20 year period. It also reduces the percentage of net operating losses from 80% down to 70%.

All in all, it is a significant blow, increasing the tax burden to businesses and consumers alike. Costs will rise, and jobs will be lost. These changes coupled with the high rate of regulation, extended time to get through permitting, high cost of labor, high cost of energy, and overall bureaucracy, will continue to suffocate anyone trying to make a living in Colorado. In 2025, the state’s trade, transportation, and utilities industry experienced the largest decline among all sectors, declining by 1,200 jobs, this trend will continue with this type of legislation.