Gov. Bill Ritter has signed a package of bills taxing everything from candy and soda to online sales.
The governor says the money is needed to help close a $1.5 billion shortfall this year and next.
The new laws signed by the governor on Wednesday are expected to raise about $118 million over the next two years.
The bills became law despite a concentrated effort by statewide leaders representing 3,800 businesses and 168,000 jobs to stop the legislation.
“Given the current economically challenging situations are families are going through, we are surprised that the legislature is coming across so cavalier about jobs,” said Diane Schwekne, CEO of the Grand Junction Chamber of Commerce. “A family’s quality of life starts with a job, and when those jobs are endangered, all Colorado residents should be concerned.”
Business leaders say they understand the state’s fiscal woes and know business has to be a part of the solution – but these new taxes will place an undue burden on small business.
“If the marketplace is discouraged from purchasing software because of additional costs driven by this tax increase, software companies sell less, software companies earn less, software companies hire less and the state of Colorado collects less,” said Laura McGuire, CEO of SmartTracks Inc., a start up software company in Colorado Springs.
Colorado’s business community has already given up more than $350 million in cash funds and revenue when the state repealed the vendor fee – and businesses now collect sales tax at their own expense, leaders said. Businesses are also concerned that the $800 million deficit in unemployment insurance fund will have to be replenished by business.
The chambers say that once the tax bills are signed, the total cost borne by the state’s businesses will be beyond $1 billion during the last three years.
“Business is paying more and more for government, which will be at the expense of private sector jobs,” said David May, CEO of the Fort Collins Chamber of Commerce. “Given their strong stakeholder position in government now, perhaps businesses should be a larger part of the conversation. … In recent weeks innovative business owners have offered the state leadership many creative solutions for dealing with limited recourses. A proposal to save $400 million in the state IT services, along with a better way to approach procurement, have been rejected by the legislature.”