Jeffco eliminating county’s portion of business personal property tax

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By Deborah Swearingen

Jefferson County commissioners voted 2-1 on Tuesday to eliminate the county’s portion of the business personal property tax, which taxes businesses for goods and products, including equipment.

The decision will cut nearly $7 million or 1.3 percent of the county’s budget. Commissioners Libby Szabo and Tina Francone — both of whom are business owners — felt strongly in favor of eliminating the tax, while Commissioner Casey Tighe had concerns.

According to a report from the Jefferson County Economic Development Corporation, 83 percent of businesses in Jeffco have nine employees or fewer. Furthermore, 86 percent of Jeffco’s manufacturing businesses — those often hit hardest by the tax — have 20 employees or fewer.

“This is a bad tax, and it’s inhibiting job creation in Jefferson County,” said Kristi Pollard, president and CEO of Jefferson County Economic Development Corporation.

Because eliminating the tax will result in a reduction of the county’s budget, the commissioners plan to discuss ways to compensate during the yearly public budgeting process.

While counties can issue business personal property tax incentives to attract businesses and encourage expansion, the statutory requirements generally restrict this to larger job creation and capital investment projects. Because of this, existing smaller businesses generally cannot take part.

“It just doesn’t make sense,” Commissioner Szabo said in Tuesday’s hearing.

“Being a small business owner, we saw it over and over,” Szabo had said in a prior staff briefing on the matter. “The tools that we use to create jobs and do all these things are just being over and over and over taxed.”

A variety of businesses, including South Jeffco’s Lockheed Martin and a number of Arvada- and Golden-based businesses, came to speak in favor of eliminating the tax. The tax primarily affects businesses like Lockheed Martin with a large amount of capital in the form of machinery and tools. Because of the business personal property tax, business owners said they often have to make tough decisions about whether they’ll invest in new equipment or hire employees.

If Lockheed Martin, which employs about 6,500 people in Jefferson County, received a credit for the money paid through the business personal property tax, Joe Rice, director of government relations with Lockheed, said it would be able to create jobs and reinvest in the county.

“We think that will certainly help spur development,” Rice said. “… We think this helps businesses across the board.”

Additionally, Tony Gagliardi, the Colorado state director of the National Federation of Independent Business, spoke in favor of eliminating the tax, noting he’s been working on doing so for years.

“It’s like a condo in Aurora. You just can’t get rid of it,” he said.