Jeffco Commissioners Quietly Eliminate the County’s Portion of a Business Tax

[This column appeared only in the Jefferson County editions of YourHub and in four Jeffco weekly newspapers.]

Real_Estate_Today_bylineIf you haven’t already mailed in your ballot, consider this tax giveaway to Jefferson County’s biggest businesses by our current Board of County Commissioners (BCC).  By a vote of 2-to-1, with the lone Democratic commissioner opposing it, the BCC voted to eliminate the county portion of the Business Personal Property Tax (or BPPT). Depending on where in the county a business is located, this represents a 10 to 20 percent reduction in the total mill levy that is applied to business personal property.

What is “business personal property”? It’s the equipment and other non-real estate owned by businesses. Utilities like Xcel Energy pay the bulk of this tax on such items as generating equipment and high-tension power lines. In our case, the tax applies to the current (depreciated) value of the copy machines, solar panels, and office furniture owned by our business. If you have a home business, the tax applies to your business equipment and furniture, although the first $7,700 of such value is exempt. This means that small businesses pay little or no tax – although it is a headache to fill out the declaration.

I do agree that this tax is an annoyance and could discourage businesses from relocating to Colorado — if they are aware of it ahead of time, which I wasn’t when I moved a company from New York City to Denver in 1991. We were shocked to receive a property tax bill for the equipment and furniture we brought with us.  (New York City has high taxes, but not a business personal property tax.)  I have learned that the BPPT is a big contributor to the revenue of local tax districts, big and small, around the state. These include fire districts, school districts, parks and recreation districts, counties and municipalities — the exact same tax jurisdictions that benefit from real estate taxes, because it’s from the same set of mill levies. Now that Jefferson County has eliminated that source of revenue, one might reasonably ask how the county will make up that lost revenue.

Although this tax is not part of the State’s revenue stream, only the State can amend or abolish it. Thus far, because the BPPT is a major component of local jurisdictions’ income, the General Assembly has only been willing to increase the exemption noted above, which benefits smaller businesses but maintains the tax as a source of revenue from big businesses.

BPPT_chart_with_insetJust as with Trump’s federal tax cut, the BPPT cut was put forth as primarily benefiting smaller taxpayers, which is simply not true.  What prompted me to devote this week’s column to this subject, however, was that the document used by the County Commissioners to claim the cut primarily benefits small businesses includes a chart showing exactly the opposite!  Above is the top half of that one-page document.

Only Commissioner Casey Tighe seemed to recognize that the document disproves its own headline and that the tax cut would primarily benefit larger taxpayers, so he voted against it.

The first line under the headline is accurate. The information in the next one is not, as the chart that makes up the rest of the one-page document clearly shows. Instead of stating that “68% of the BPPT revenue[s] are from schedules under $100,000,” it should have read, “53% of BPPT revenue is from tax schedules over $10,000.”

If Lesley Dahlkemper, a Democrat well-known from her tenure on the Jeffco School Board, defeats the Republican commissioner who is up for election this year, the BCC will be controlled by Democrats. Then I hope the Board will reverse this tax giveaway and do something else that the Republican-controlled Board wouldn’t do, which is to put on next year’s ballot a referendum to change the Board of County Commissioners from a 3-member board to a 5-member board. A 5-member board, with commissioners elected by district, would be a great improvement over the current 3-member board, all of whom are elected at large. And if more locally-focused representation isn’t reason enough for the change, consider that the state’s Open Meetings Law makes it illegal for any two commissioners (because they would constitute a quorum) to meet privately without that meeting being announced in advance and opened to the public.

 

Author: Golden Real Estate, Inc.

Golden Real Estate is a prominent member of the Denver/Jefferson County real estate scene. Based in Golden, we service both Denver and Jeffco, representing both buyers and sellers. We're well known for Broker Jim Smith's weekly "Real Estate Today" column published in the Denver and Jeffco editions of the Denver Post's YourHub section each Thursday. The column also appears in several weekly newspapers and is archived at www.JimSmithColumns.com. We have nine agents, all of whom are Realtors and EcoBrokers. Our office is solar powered and several of us drive electrics cars. Known for our sustainable practices, we accept polystyrene (aka "Styrofoam") for recycling, keeping 200 cubic yards per year out of area landfills.

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