House Bill 1025, which would make it more difficult for businesses to take the industrial energy use tax exemption, was approved yesterday by a 6-5 vote in the House Energy and Environment Committee after it was amended in an attempt to address concerns from its last committee hearing.
The Colorado Chamber is opposed to the bill and testified against it earlier this month, and the amended version is still a solution in search of a problem. The original bill required all businesses taking the industrial energy use exemption to use meters to measure the energy they use – when taking into account the installation, monitoring and administrative costs of these meters, it would be a significant burden on the business community.
The amendment adopted yesterday not only requires energy use to be measured, but it also must be verified by a “third party” to quantify the amount of electricity used for manufacturing. This will cost companies millions of dollars and will be particularly difficult for small businesses to comply.
The industrial energy use exemption has been in place for nearly a century to ensure businesses aren’t double-taxed for the energy they use to create a product. The exemption is commonly used among manufacturing companies across Colorado, in addition to other industries, and is an important economic incentive that should be continued.
The bill will now move on to the House Finance Committee for consideration. If you’re concerned about the impact of HB 1025, please contact Loren Furman at [email protected].