As Governors across the United States set out their policy initiatives for 2019, many are taking a close look at the impact of federal tax reform measures on their state, and how other states are coping.
In Colorado, Governor Jared Polis presented his first State of the State address, calling the State of Colorado “solid”, “daring” and “bold”. The State’s economy continues to be strong in agriculture, outdoor recreation, aerospace, bioscience, energy, and cannabis.
In forging forward, Polis set forth a series of major policy goals for a fairer tax code, one he said that “reflects today’s realities rather than yesterday’s distortions.” In this, he is referring to special interests and a loss of control over tax expenditures he said are on “autopilot, some since the 1930s.”
He set forth three tax reform initiatives in his address:
- Fair share. Close loopholes for large corporations and special interests
- With this, Polis indicated that the State of Colorado will not “blindly” conform to federal tax reform changes. Instead, the State is to look at each change and asses whether to adopt based on the impact to families and small businesses in the state.
- Cap vendor fees.
- A retailer that collects sales tax is currently allowed to retain 3 1/3% of the tax reported to cover the expense of collecting and remitting the tax. This amount is know as the ‘vendor’s fee’. Nine in 10 retailers in Colorado are small businesses. By capping the vendor fee, which Polis called “a giveaway to the largest and most profitable retailers in the nation,” the State can use the savings to lower rates, benefiting small businesses and residents.
- Reduce taxes for middle-class Coloradans by lowering the income tax
Polis ended his remarks on tax reform with intent. “Our tax reform proposal will not change how much money the state collects or affect investment in public priorities one way or the other. It simply asks the largest, most influential corporations to start paying their fair share so that individuals, families, and small businesses can pay less.”
What’s done in one state is being watched closely by governments in other states. According to Jared Walczak with the Tax Foundation, states often adopt policies after watching peers address similar issues. Notable trends in tax policy have emerged across states in recent years, and policymakers are taking notes (see highlights in Tax Trends Heading Into 2019).
We’ll keep you posted on state tax reform measures rolling out across the nation.
What do you owe?
Check out our infographic to find out.
Let’s talk tax
Subscribe to Our Blog
[ai_taxops_blogs limit=’100′ layout=’minimal’ post_ids=’1014′]
Specialties: #statetax, #taxreform, #Wayfair