An Inside Look at Lobbying in Colorado with Jenn Penn
Hosts & Guests
Jenn Penn, Contract Lobbyist at Dome Strategies
Meredith Smith, State and Local Tax Senior Manager
Judy Vordran, Leader, Educator, Advocate, J.D., CPA
Topics Discussed in this Episode:
- The formation of the sales tax coalition
- Legislative sessions and lobbying
- The SUTS System
What You Will Discover:
- [01:21] Jenn’s professional journey
- [11:45] The Sales Tax Coalition
- [19:22] Creating a competitive economic environment in Colorado
- “Lobbyists are really an integral part of the process. We are targeted communications. A lot of businesses hire PR. Lobbyists really help businesses, non-profits, and other organizations communicate with the state legislator.” – Jenn Penn [02:37]
- “The mission of the sales tax coalition is to reform Colorado’s complicated sales tax system with the goal of making it fair, simple, and predictable for businesses in a way that is revenue neutral to have any adverse impacts on local and state public services and create a competitive economic environment for Colorado that will attract additional employers and trade organizations.” – Jenn Penn [18:53]
- “The general view of taxpayers isn’t such that they won’t file. They just need to know how to file and they need to have a mechanism that is easy enough to understand to make it happen.” – Meredith Smith [21:16]
- “People are starting to see with technology getting better and better, there is more compliance. This is good for business. Because it is meant to be a voluntary system, not an extractive system. It is a win-win for business and governments. ” – Judy Vorndran [17:13]
TaxOps Home – www.taxops.com
Welcome to SALTovation. This SALTovation show is a podcast series featuring the leading voices in salt, where we talk about the issues and strategies to help you make sense of state and local tax. In this episode of Saltation, we talk with Jen Penn, a contract lobbyist at Dome Strategies in Colorado. Jen works with businesses to simplify tax and builds coalitions for other special interest groups.
Listen in. All right, Jen. Well, thank you so much for joining our saltation podcast today. We look really forward to this conversation, so thank you for being here. Great. Thank you so much for having me. So just to get started, what is your background and how did you actually get into lobbying? Great. That's a fun question.
I'm a Colorado native and I really did not anticipate a career in legislative lobbying at the state level. So, I went to CSU from. Uh, 1995 to 1999 and go Rams. Go Rams. So, during that time I got involved in the university government and I originally wanted to be a, um, physical therapist. And realized I'm really terrible at science.
And so, um, I decided to go open option and take a bunch of tests about what I was good at and, um, at one point in time decided to switch to political science and, um, did an internship in 1998 at the state capitol and fell in love with the state. Uh, you know, legislative process and the rest is history. I basically never left the capitol and here I am.
Mm-hmm. You know, almost, you know, 25, 30 years later. So yeah. I love it. Wow. Um, so then not, we'll even, we'll take a step back from there, but not everyone knows what a state lobbyist does, so how do you describe what you do? That's also a great question. So, I'd like to say that it's about policy and not politics.
Um, the state legislature is very different than everything you hear and see on your national media. Uh, our state legislators get along really well, and party is not as important as it is at the federal level. So, lobbyists are really an integral part of the process. We are, um, what I would call targeted communications and.
Like a lot of businesses hire communications or PR folks to help them communicate with the press lobbyists, uh, really help businesses, nonprofits, other organizations communicate with the state legislature. And so, we are helping deliver those messages to those 100 legislators. Um, 35 in the Senate, 65 in the house, the governor, his staff, and the executive branch of, of the government.
So, it's really just targeted communication and there are two types of lobbyists. Um, there's what we call in-house lobbyists, so those folks work for a specific. Organization or company. Um, most lobbyists, you know, maybe a nonprofit or a specific company. Those are in-house lobbyists. And then they're what we call contract lobbyists like me, who have a variety of different clients representing those different organizations on a contract basis.
Um, like myself. So, if you were an in-house lobbyist, like say for Coors Brewery, I mean the only way to support someone like you at an in-house level is to have a fairly large budget. Right? And it'll be a larger company that's dealing with more issues. Plus, you're one state specific. Are you lobbying across anywhere besides the state of Colorado?
I am not at this time. At, uh, at particular times in my career, I had. Um, other clients that had a regional presence. Um, at one point in my career, I, I was in house, um, at two different points in my career. I started out with a nonprofit representing people with intellectual and developmental disabilities.
Uh, and I did that for about four and a half years. And then I was also in house with Coors Brewing Company, and I did state. And local government affairs for them. Um, so there's a lot of companies that have state and local government. Affairs and there's a lot of, uh, companies and organizations that have somebody in that in-house role that might have multiple states.
Um, so I report in, I still have Mosen cores as a client, and I report into someone in-house in that company who has multiple states. I think he has like 11 states now. Um, and they don't have a contract lobbyist in every one of those states. They. You know, some state legislatures maybe aren't as active, or they don't have a footprint in those states.
And so those, um, in-house lobbyists can monitor those states, um, digitally. I was going to say like North Dakota, there's, they're, um, legislators only meet every other year is my understanding. So, they don't even legislate annually like we do in Colorado. Correct. And then the s windows of legislation are different across the different states.
So, some, like ours is what, January through May. But then still stuff's happening in what? The lame duck section, but. There's still stuff happening. Lame duck, duck session, is that the right word? And then some don't, you know, you're planting the seeds all along, even to get stuff happening for next year, right?
Yeah. So fascinating. In Colorado, we have what we call citizens legislature. So, by constitution, the legislature can only meet for 120 days, but they meet annually, and so they start in January, usually the second week in January. And then they meet for a hundred and, uh, 20 consecutive days. Um, if they want to meet, um, more than that, the governor can call what we call a special session, or if two thirds of both the House and the Senate agree and call a special session.
But those special sessions would have to be on a predetermined, um, agenda or uh, topic. So, it's a set. Policy conversation. It can't just be about anything. Um, but you're right, a lot of other states only meet every other year, but Colorado meets every year. And then that period of time that is not during the legislative session is what we call the interim.
And during the interim in Colorado, we have, um, interim committees. So, there are, there are committees that meet only during the legislative session. There are. Committees that meet during only the interim. And then we have committees that meet all year round. And so, we'll talk about the legislative sales and use tax simplification task force, which only meets during the interim.
Right. And that's how I know Jen, because I've been on this coalition to simplify Colorado sales tax for the last however many years. And you've been instrumental in that? Mm-hmm. And you've gotten some significant laws changes. Uh, maid. And I remember when Tammy McCoy, who was the original person who asked me to get involved, she was in the Colorado Automobile Dealer Association, which started seated our organization.
Mm-hmm. Because it wanted to make some meaningful law changes. She says, it's going to drive you crazy. It takes so long. And I thought, no, we'll figure it out. It'll be fine. And boy was I, was she Right? And, and you have been so. Steadfast and consistent, and you've had to deal with new legislators, like, oh my gosh.
Starting over with a brand-new set of people to keep informing them of all that you've taught. Right. Our prior, uh, Tracy Kraft Tharp, constantly instrumental in getting things done because she was there so long. Right. We're so lucky to have her. Well, that brings up a really good point. Colorado also has what we call term limits, so legislators in the house can serve.
Up to eight years. So, uh, four, two-year terms. And that's only if the, uh, voters continually elect those folks to serve those terms. And then the same in the Senate, so two four-year terms. So, eight years in the Senate. And so, what we see sometimes, um, is that we'll see some folks serve. Eight years in the house and then move over to the Senate or vice versa for, um, 16 total years.
And we're lucky if we see somebody, you know, serve those full 16 years. But in the case of representative Tracy Kraft Tharp, who was amazing for us, um, in the business community and on these simplifying sales and use tax issue, she. Decided to serve her eight years in the house and now she is, um, a commissioner in, in Jefferson County.
And so, um, huge loss to us at the legislature, but she continues to work on policy goals at the county level. Right. And then you had to come in and educate. I mean, you had to make sure on our coalition. Mm-hmm. We had continuity. Mm-hmm. Even though we had to bring in new people, but we needed some people to kind of carry the torch and then while the new people got educated.
And you did that. Yes. For us. Yes. Well, and this next session is going to be, continue to be a challenge. So, you know, we've been able to, you know, continually ongoing, always educating new elected officials. And this past election cycle we saw a ton of new electees. Um, so I believe we have a. You know, o I know it's over 30 electives.
I believe it's 36. And then with a couple of, um, you know, unfortunate, uh, the death of, of representative Hugh McKeean, who is being replaced through vacancy committee. And then the recent resignation of Senator Bob Rankin, who will officially resign in January. And then his replacement will be filled through vacancy.
That gets up to like 38, so over a third of the legislature. Are completely new legislators. So you know, they're still learning the legislative process and all of the issues and all of the people and the players and those, those players include the people inside the glass as far as the electees, and then outside the glass is what we call the folks that are, um, non-electees, like the lobbyists and the legislative liaison staff for the departments and the staff within the departments.
Like the executive directors and navigating that process, the governor's office staff, and then of course all of the other advocacy folks that impact the legislative process. Yeah, and I've been really kind of anti-term limits a little bit now that I've heard this, because I think it takes you a good year to figure out what you're doing before you're effective, right?
Not you, but the legislators, you know? And. So I just had no idea. It's been such a blessing to serve on this task force and work beside you because I just really had no idea and I have a better appreciation for our system of laws, even as a lawyer who, you know, deals with the writings of them, but not always the, the implementation of them until now.
So, can we just go back a Yeah. A little bit and just talk about the formation of the Sales Tax Coalition and like how it got started, and then Jen, how you got involved. Because it sounds like just from, you know, being a RAM at C S U. Tax wasn't really what you were going for yet. Here we are. I know. Let's see, not-for-profit, learning whatever.
And then beer. Beer. And then tax. And then tax. And I have to be honest, I'm still not a tax expert. For, I don't know that I will ever master tax. Um, don't worry. There are disclaimers all over this thing that we are not offering tax advice and to consultants. Hey, thank you. Consult a professional, because I think I call my CPA, you know, especially around tax time, you know, daily.
So, let's see. Your, your question was, okay, the sale, the simplification, the sales. Tax Coalition, which we call our sale selves, simplify Colorado Sales and Use Tax Coalition. We were established in, I think, 2014 and I started lobbying for the group around that time, maybe 14 or 15. And, um, we'll put a link to our, our website, uh, with this podcast.
So, simplify Colorado Sales and Use Tax Coalition. Um, we'd love for more organizations to get involved. So, we have been, um, you know, working on trying to simplify Colorado's overly complicated sales and use tax, uh, system since then. And one of the biggest successes that we have had, um, and we'll talk about a couple of those, is in 20.
16, we created the legislative sales and use tax simplification task force, which is a mouthful, right? Um, cause you got to have a group, you got to have something, and then you got to have a group within the something to make the things happen. Right. Yeah. To teach the people. Yep. And honestly, in like 20 14, 15, 16, when we started doing all of this, there were a lot of people who said, I've been working on this for 20, 30 years, and good luck.
You're never going to get anywhere, never going to happen. Never going to happen. Yep. And now if you go to our website, we have made significant progress, but we still have a long way to go and. That's okay because how do you eat an elephant? One bite at a time, and we got a lot more of an elephant to go. So, in 2016, we created what we call the Legislative Simplification Task Force, and it created a task force with the leadership of Representative Tracy Kraft pulling together, um, legislators.
So, two, uh, legislators from the house, two from the Senate, so a Republican and Democrat from east each chamber, and then members from the business community, CPAs, um, local governments. Uh, including, um, you know, the, the municipal level as, uh, local governments and county governments. And when we first pulled these groups together, it was like firecrackers.
These folks did not want to have that conversation. We did not want to be in the same room together. But you know what? We have finally started getting, everybody gets along now. We're having really great conversations. We have passed some really significant legislative reforms, including, um, one of the biggest things we've passed is the creation of the set system, and, uh, we can talk a little bit about that.
Uh, in 2019, in 2019, Senate bill 19 0 0 6, uh, we created the SU system. So, for those of you who don't know what that is, it's the sales and use tax. Filing system within the, the Colorado Department of Revenue, which is creating a system for businesses and local governments to work together. Kind of our vision is to have this online, um, portal or hub for.
Local governments, the state and businesses to all have one place to file their sales and use taxes. And we created that in 2019, uh, through an R F P process. And that process, um, we're continuing to enhance that even in 2023 with legislation. So, well, it's taken the city, so we have just. Maybe for our guests.
Mm-hmm. Our, um, we have 70 home rule cities. Right. They all have a separate government and that's by our constitution, which is why nobody really wanted to dungeon. But we, you know, if you look at America, there's 50 states, 46 have a sales tax, and the largest states in our nation do not have a home rule.
California, Illinois, New York, Florida, Texas, they are all state filed. So, all the cities and counties are collected and remitted. The numbers are put into the state system and then the state is in charge of getting that money to all those local governments. They still have a tax structure, it's just not a separate filing.
And so, it is being done in, you know, the largest populated states in their nation. Now, mind you, that may have something to do with, they have more resources, they can build it. There's a lot of humans they got to deal with it. We're a very small state population wise, and, and we have some of this wild west mentality, but.
You know, I think people said, ah, I can't be done. There's no trust. We don't trust the state. But people are starting to see with technology getting better and better. Mm-hmm. They are seeing it happen and there are some hiccups, but we're seeing more compliance, which makes it better for business because it's supposed to be a voluntary system, not an extractive system.
So, I feel like this is just huge for business and governments. It's a win-win. So. Anyway. Absolutely. That's just my plug for it in case people don't know. I mean, I, I've been cracking that for a long time because I don't just work in Colorado. We work across the nation and so we look at these other systems and are like, they're doing it.
And Texas has 1,714 jurisdictions, so certainly Colorado can handle it. So, um, but you know, its technology, its mentality, it's how things were. Set up. It's how things were done. It's hard to pivot, but we're getting that pivot because of the set system. I remember sitting in these meetings because I was part of that evaluation process.
So, one of our cities, um, uh, representatives like, I thought you hated us. He says to me, and I'm like, I don't, I'm on your side. I'm trying to get people compliant. He goes, I didn't know that. And now I think he sees me very differently. Not as an adversary, but as a collaborator. And I think that, I think it's exactly what you said.
Do you remember in the beginning, I don't know, you've sat through all the meetings. I've been there. I heard a bunch of mayors coming in. Remember all the mayors were like, please don't change it. We rely on our home rules. We need this, we need this. And now we're like, no, it's not going to take away your authority.
It's just going to make you have more resources. Mm-hmm. So, um, cool. And not hit people over the head for not complying. Yep. And that's a really good point, and I should have mentioned this earlier. You know, the mission of our coalition is to re reform Colorado's complicated sales tax system, um, with these goals to ma fairness, simplicity, and predictability for business, um, in a way that is revenue neutral for, um, to have any.
Adverse impacts on local and state public services and create a competitive economic environment for Colorado that will attract additional employers. Um, the coalition as a business, you know, is comprised of businesses and trade organizations and other interested taxpayers that want to reform and enhance, um, business in the state of Colorado.
So, you know, when we created such, I think there was a lot of cons. Concern, but ultimately some of the same municipalities and mayors that came and voiced those concerns at the task force have now seen revenue increases and are totally on-board mm-hmm. With what we're doing. You know, and we have, you know, told them we're, we're not trying to take away, we're trying to make it easier for businesses to comply with remitting their sales and use taxes.
Right. So that. We all can, you know, see, you know, reap the benefits, right? And the money is owed. Mm-hmm. It's just that the system of remittance is so darn difficult. People just give up, you know, they don't care about $7 to a population of less than 10,000 people that happens to be a home rural city, so they just can't possibly know that.
And even out state. In state and out-of-state, people don't even know that we are a home roll. I mean, people living here don't know it. And unfortunately, some people don't know that they owe taxes until they're getting audited, and that's unfortunate. And so, we're trying to make the system less complicated and easier for people to comply so that.
So that people do comply. Right. And realistically what this does too is, is yes, it's the in-state constituents that are paying the tax, but like you said, it is due regardless. But also, it's those, you know, out-of-state vendors that, you know, Colorado gets a piece of and there's, and there's trickle down.
So, the, uh, to the extent that we can just, you know, make it easier, the general. The general view of taxpayers isn't such that they won't do it, but they just need to know how, and they need to have a mechanism that's easy enough to understand to make it happen. Absolutely, and they're not going to do it if it costs them hundreds of dollars to remit $7.
That just doesn't make business sense. But the problem is that a hundred dollars or $5 or $7 adds up of 20 years of not filing. So, there's your big contradiction of like, I didn't do it for a long time, didn't think I'd have any trouble. And so, it does add up. And so, this is where we want to make some mitigation so that people can be compliant and do what they need to do and not have a huge stick hit them over the head.
This podcast is for educational purposes only and is not intended, nor should it be relied upon as legal tax. Accounting or investment advice. You should consult with a competent professional to discuss specifics of your situation and the applicability of the information presented.
Sign up to receive email updates
Enter your name and email address below and I'll send you periodic updates about the podcast.