On February 24th, the Governor of Colorado signed nine pieces of legislation that suspend or eliminate several special tax breaks in order to help balance the state’s budget by generating $15.6 million in revenue this fiscal year and $132.6 million next fiscal year.
According to the PRESS RELEASE, the Governor did not want to sign the nine pieces of legislation, but felt he had no choice.
Gov. Ritter signed the following bills:
- House Bill 1189, Eliminate Sales Tax Exemption for Direct Mail
- House Bill 1190, Suspend Industrial Fuel Sales and Use Tax Exemption
- House Bill 1191, Eliminate Candy and Soda Sales Tax Exemption
- House Bill 1192, Repeal Sales and Use Tax Exemption of Standardized Software
- House Bill 1193, Sales Tax Out-of-State Retailers
- House Bill 1194, Eliminate Non-Essential Articles Sales Tax Exemption
- House Bill 1195, Suspend Ag Sales & Use Tax Exemption
- House Bill 1196, Income Tax Credit Vehicles Using Alternative Fuels
- House Bill 1199, Limit the Net Operating Loss Deduction Temporary Limit
Two additional bills are pending:
- House Bill 1197, Reduce Conservation Easement Cap Amount
- House Bill 1200, Limit Enterprise Zone Investment Tax Credit
Tax Increases in Colorado - Will it Spread?
As you can see, Colorado has balanced their budget by raising taxes (eliminating or suspending exemptions, etc.) and asking everyone, or atleast several groups of taxpayers to share the pain.
Based on legislative proposals being discussed around the country in several states, I think you can expect to see other states finally reach a breaking point where they are forced to raise taxes to balance their budgets as well.