Colorado House Bill 1192 Is a BAD Idea

In times of fiscal challenge you can always count on government to come up with some pretty bad ideas to fund deficits. House Bill 1192 is a particularly egregious example of one such boneheaded idea.

The bill as it is currently constructed would place a tax on all software purchased or installed in Colorado. This is a tax not just on the software industry but on every business that uses software. And it’s an incredibly stupid idea.

According to the Colorado Software and Internet Association there are more than 5,500 software, hardware and IT businesses in the state and approximately 175,000 IT professionals (with a total payroll of nearly $5Bn). Across the sate there are thousands of additional businesses that make use of technology to run their businesses. All would be effected.  At a time when we’re trying to encourage business growth and new hiring, HB 1192 will have the opposite affect, stifling job growth and actually lowering overall tax receipts as businesses (smartly) move employees out of state and shift open recs from Colorado to states that don’t impose such a tax.

This sort of thing is unbelievably frustrating. My partners and I (along with many advocates for technology businesses in Colorado) spend countless hours advocating for the state of Colorado (despite the fact that we invest nationally, not just in our back yard).  We’ve invested in companies that have created thousands of jobs in Colorado.  We actively encourage new businesses to form here, existing businesses to move here and people who fund businesses to look locally for opportunities. Passing HB 1192 will be an outstanding way to undermine these efforts.

  • jpball

    Seth, As I read the bill it's a repeal of a short-lived exemption written in 2006, which from what I can research, once suggested software was NOT tangible personal property. The proposed bill circles back around to say, well, indeed, software (standardized), is tangible personal property.

    So, it either is, or is not tangible personal property and if so, it “deserves” to be treated similarly to other tangible personal property.

    I understand if your opine is “no more taxes – enough is enough.” But to argue that software somehow deserves to be treated differently, is difficult to accept, even for this “technology advocate.”

    The bill is sufficiently broad (vague) as to leave room for misinterpretation, which I may be doing, and if so, please let me know. I've also heard unconfirmed rumors that a retroactive component exists, which if true, is unduly onerous, but I can't find reference in the bill to support the posted claims.

  • If you want to read the bill for yourself, go here: http://www.leg.state.co.us/Clics/CLICS2010A/csl.n… and select the correct bill number range (house bills 1151-1200) and look for 1192: “Sales & Use Tax Of Standardized Software”.

    Of course, you just get a definition of what kind of software they're planning to tax, not what the tax rate is, but it is still more useful than the CSIA page I've seen (which is a bit hysterical).

  • Ida Lau

    You feel strongly about this issue. Let the house know how you feel; come testify today: http://coloradotechnology.site-ym.com/