HB1263 Compensation Caps: Tell Business to Leave CO

HB1263 by Rep. Jack Pommer (D) and Sen. Betty Boyd (D)

A LIMIT ON THE STATE INCOME TAX BENEFIT FOR COMPENSATION PAID BY A BUSINESS FOR PERSONAL SERVICES RENDERED
Status: 2/4/2010 Introduced in House; assigned to Finance Committee

CRBC Position: oppose

House Bill 10-1263 would not allow a business to deduct the total amount of salary and other compensation (ie - benefits of any kind such as health care, retirement plan contributions, and all others) paid to any individual in excess of $250,000. It would apply to the tax returns of all businesses which file in Colorado, whether located in Colorado or outside the state, including “C” corporations, “Sub-S’ corporations, Schedule C sole proprietors, partnerships, LLC’s, and all other business entities.

This bill, if passed, would actively discourage most businesses from relocating their corporate headquarters to Colorado, and would discourage other high-tech and high paying industries from locating facilities in Colorado. After the Democrat-party-controlled legislature recently passed hundreds of millions of dollars of sales tax increases on Colorado businesses, this bill would further seriously damage Colorado’s reputation as one of the most business friendly states in the country.

Now with HB-1263 the CRBC seriously questions why some members of the Democrat party deem such measures appropriate when the State is now starting to work its way out of a serious economic downturn.

This bill is sponsored by Rep. Jack Pommer, D-Boulder and 12 other members of the House, and Sen. Betty Boyd, D-Jefferson County plus 4 other senators. Representative Pommer is infamous for his recent comment on the House floor saying that “businesses don’t care about Colorado”. This Bill would seem to strongly indidcate that Rep. Pommer feels likewise about businesses.

HB1263 complicates CO income tax law by creating a significant difference between CO and Federal income tax law (with a limit of $1 million deductibility on compensation). It imposes an unusual and unnecessary cost on businesses in Colorado.

ACTION: Contact your representative and explain to them how socialist mandates discourage business, which decreases revenue and taxes available to pay for public sector programs.