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Colorado Ag Tax Break Change Advances In House

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(credit: CBS)

(credit: CBS)

DENVER (AP) - A measure to eliminate a tax break for small properties that aren’t being used for agriculture production got preliminary approval in the Colorado House Friday with some Republicans opposing the bill, saying it would hurt rural residents.

Supporters of the measure, which was approved on a voice vote, said it is necessary to close a loophole that allows some people to pay lower taxes for their land when it’s classified as agricultural, even if they’re not using it for that purpose.

“I think in our tight fiscal times, we need to look at all these loopholes — that’s how I take it,” said Rep. Matt Jones, a Louisville Democrat. He said the bill is a good start, but that there would still be “a lot of other folks out there that are getting a special break on your property tax that others aren’t and the rest of us are subsidizing that difference.”

That’s because House Bill 1146 would not cover larger properties. It would allow assessors to reclassify up to 2 acres to be taxed at a residential rate if the land isn’t integral to an agriculture operation. The lower-tax burden is aimed at helping farmers and ranchers, and those in favor of the bill said they want to make sure those are the people benefiting.

Rep. Tom Massey, a Republican from Poncha Springs who sponsored the legislation, said the bill is about ensuring landowners’ property is classified correctly so they pay what they owe. The bill will generate revenue for local governments and school districts, but the proposal’s fiscal note does not have a solid estimate of what that amount would be, because the number and value of properties subject to reclassification is unknown, he said.

Republicans opposing the bill said it unfairly raises taxes for rural residents who are following the rules to pay the lower agricultural tax rate.

“I think we’ve got people in the state, certainly my district, who are living by the rules, obeying the law, and now we’re going to change the rules and take more money out of their pocket,” said Rep. Chris Holbert, a Republican from Douglas County.

Rep. Marsha Looper, a Republican rancher from El Paso County, said the bill would affect constituents who have a couple of steers and chickens but may not be considered part of an agricultural operation.

“My two-acre families are not agricultural producers. They are blue-collar workers that have jobs in town,” she said. Looper and other Republicans also argued that assessors already have the ability to do what the bill outlines, making the proposal unnecessary.

Looper said she found out that some residents in her district would see a $242 increase on their property tax per year if the bill passes.

The bill must pass another formal vote before it can advance to the Senate.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)

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