By Ed Sealover for the Denver Business Journal
U.S. Sen. Michael Bennet, D-Colo., is one of the authors of a plan to establish a new minimum income tax level on companies making more than $1 billion in profits per year — a plan that could affect several high-profile Colorado companies and is drawing fire from business leaders.
Colorado’s senior senator has joined with three other Democrats and an independent to put forth the Corporate Profits Minimum Tax plan that would seek to ensure that large companies that now can pay low tax rates by using a combination of exemptions and credits granted by federal law must pay taxes of at least 15% on their profits.
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Loren Furman, Colorado Chamber senior vice president of federal and state relations, noted that book income and taxable income represent two different ways of calculating income and that businesses now pay taxes on the latter standard. Tax accounting is done so that businesses can pay taxes on existing taxable-income laws, and combining these different practices would make it very difficult for affected businesses to comply.
The limitations on accelerated depreciation could prove particularly costly and problematic and likely would decrease investment in capital equipment at a time when many people are calling for a re-growth in capital-intensive American manufacturing as a way of staving off further pandemic-related supply-chain problems, Furman said. And she and other business groups have noted that a similar bill passed in 1986 — and then was repealed quickly because it was deemed unworkable for many of the reasons now offered in opposition to this plan.
“We find it surprising that this proposal would be pursued so late and was not put forward during the regular legislative process to allow for public hearings and input from Colorado businesses,” Furman added. “This proposal was not shared in advance with Colorado business organizations which represent hundreds of businesses across the state.”