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A proposal to cut Colorado's corporate (and individual) income-tax rates

Senate Bill 20 is getting its first hearing before a committee on Wednesday.
Credit: Getty Images/iStockphoto

DENVER — In his Jan. 8 State of the State Address, Colorado Gov. Jared Polis crowed about the temporary Taxpayer’s Bill of Rights rebate that will reduce the corporate and individual income-tax rate this year from 4.63% to 4.5%, then announced he is creating a bipartisan study group to look at ways to lower the income-tax rate permanently. All signs pointed to this being a good year for employers hoping to keep more of their own tax money.

And in that spirit, Senate Bill 20 — an effort from Republican Sen. Jerry Sonnenberg of Sterling to cut the income-tax rate from 4.63% to 4.49% permanently — is getting its first hearing before a committee on Wednesday. The problem: It’s the Senate State, Veterans and Military Affairs Committee, the so-called “kill committee” where unwanted bills from the minority party go to die.

Its imminent demise isn’t stopping business organizations from getting behind it. Tony Gagliardi, state director for the National Federation of Independent Business, said his members support an across-the-board tax cut that they believe will have effects similar to the federal tax reform of 2017, which led businesses to buy needed equipment, hire a new employee and increase their optimism about the economy.

But the bill’s assignment to the kill committee clearly shows that even if legislative Democrats may be more willing to talk about income-tax cuts this year after shutting down Polis’ efforts to move forward with any last year, this isn’t the way it’s going to happen. Senate Majority Leader Steve Fenberg, D-Boulder, said last week when asked about the concept that any cuts will have to come as part of a revenue-neutral package in which the state eliminates some targeted tax credits or exemptions that have yet to be identified in order to offset the loss of revenue from the income-tax cut, which the nonpartisan Legislative Council estimated as reaching $308.2 million by the 2021-22 fiscal year.

>>>Read more at the Denver Business Journal.

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