DENVER, Colo. (CBS4) – State legislators are trying to close a loophole that they say some businesses use to avoid paying taxes. Legislators want the income to go to public education.
State Reps. Mike Foote, D-Lafayette, and Brittany Pettersen, D-Lakewood, met with small business owners and educators on Sunday to discuss House Bill 16-1275, which passed in the House last week.
Betty Wang, co-owner of Caution Brewing in Lakewood, pays thousands each year in business income taxes.
“A lot of small businesses don’t make it because of all the taxes that they pay,” said Wang. “And it’s really unfair for us that larger corporations have ways of dodging taxes.”
Foote said that HB 16-1275 would require that taxes be paid where profits are made, rather than where the company is headquartered.
“What tax havens are is a way for big businesses to hide their profits off shore,” said Foote. “And it’s to the detriment of small business owners.”
He said that preventing overseas funds sheltering would raise up to $70 million in the bill’s first year alone. Foote said that the money raised would go to the state’s public education.
Teachers told CBS 4’s Melissa Garcia that the funds were badly needed.
“This year, I have a zero-dollar budget,” said Linda Millard, a music teacher.
Millard said that a lack of funds in the classroom had been affecting student learning.
”Our funding gets cut, cut, cut,” Millard said. “When teaching classes of 36, 37 students, that’s not acceptable in today’s world.”
According to a study by Education Week Research Center, Colorado ranks 43rd in per-pupil spending. That’s $2,715 less per student each year than the U.S. average.
Opponents of HB 16-1275 said the bill is anti-business.
”This would put Colorado at a disadvantage to 47 other states,” said Polly Lawrence, R-Douglas County. “How is that leveling the playing field for companies in Colorado or considering moving to Colorado?”
Opponents said that corporations who do business overseas had brought thousands of jobs to Colorado.
In order to become law, the bill would have to pass through the Senate.
Last year, a similar bill died on the Senate floor.