Colorado legislators are working their way through a wide variety of bills that would affect businesses.
Among the top issues they’re talking about are simplification of the state sales and use tax system, paid family and medical leave, retirement savings and regulations concerning the cannabis industry.
The Business Journal asked several business advocacy organizations and two local legislators about the bills and issues they’re watching or supporting as they make their way through the legislature.
Paid family and medical leave. First on the list of issues the Colorado Springs Chamber & EDC is keeping an eye on is this one, Vice President for Government Affairs Rachel Beck said.
“We know that’s a priority for the Democratic leadership this year,” she said. “They haven’t introduced a bill yet, but we’ve seen a number of tenets of the proposal … that will be very burdensome.”
Beck said the proposal would create a new agency to administer a family and medical leave program — a very expensive proposition.
“The current proposal does not dovetail with the [federal Family and Medical Leave Act] at all,” she said. “We need to get a good idea of the costs.”
Under consideration are a special insurance pool or tax credits to make sure businesses can pay for wage replacement, said Hunter Railey, Colorado director for The Small Business Majority, a San Francisco-based advocacy organization.
Tax credits are problematic, Railey said.
“If you’re using tax credits, you’re essentially pushing the cost onto Colorado taxpayers,” he said, adding provisions of the bill are being negotiated and that he expects a bill to be introduced this month.
Sales and use tax regulations. The second most important issue on Beck’s list is how to implement a system that ensures a level playing field for retailers who sell to customers in other jurisdictions.
In the wake of a U.S. Supreme Court decision that opened the door to new revenue sources for states, municipalities and other taxing jurisdictions, the state Department of Revenue crafted a new policy that would require retailers to begin collecting and remitting the state’s 2.9 percent sales tax as of March 31, even if they do not have a physical presence in the state.
Businesses said that was too soon and the rules were too complex and could be onerous for businesses. The department later postponed implementation of the rules until May 31.
“If businesses are able to comply, they will,” Beck said. “But we have to give them the tools to do so in a way that doesn’t cost more than doing the business.”
Beck expects legislation will be introduced to direct the Department of Revenue to get proposals for a software system that helps businesses identify and cope with tax rates in multiple jurisdictions.
“This bill would be one of those tools,” Beck said. “There is a lot of bipartisan support to deal with this issue.”
Freshman Rep. Marc Snyder, D-Dist 18, is a member of the House Finance Committee and said the committee will be addressing the issue.
“I think we’re headed toward some type of online system where you can type in the address of where you’re shipping your product to; it should tell you this is what the taxing entities are and a total amount of tax, and you should be able to easily incorporate that into your billing,” Snyder said. “We really want to make it functional and efficient for businesses. At the same time, we think it’s important that every penny of tax liability is paid.”
Snyder said the tool “may not be efficient enough to keep people away from subscription services, but we’re trying to make it more efficient.” He expects the tool to be launched by July 1.
Colorado Secure Savings Plan. Another bill likely to be introduced soon would create a board to study the feasibility and impact of a statewide retirement savings plan, said Debra Brown, executive director of Good Business Colorado.
The plan would be a public-private partnership that would provide an option for startups and small businesses to offer retirement savings for their employees.
“It’s about leveling the playing field and allowing them to compete for talent,” Brown said.
The idea “has been run in different variations several times in the past,” she said. “Nobody disagrees about the need; we talk about the crisis that’s coming with the ‘silver tsunami’ when people’s retirement assets are insufficient. If you get the young workers enrolled in the program now, even at 5 percent, they will be able to do it on their own without increasing the burden on taxpayers.”
Cannabis industry regulations. The regulations concerning all aspects of the cannabis industry are due to sunset this year, Snyder said.
“We will have to authorize a whole new regulatory scheme,” he said. “I don’t think it’s quite as daunting as it was five years ago when this industry was in its infancy. … Now there is a lot more evidence-based information out there. I think we will be legislating from a more informed position … [and] we’ll be able to come up with a really good, robust regulatory system.”
One provision likely to be revised is the requirement that medical marijuana dispensaries must grow a certain percentage of their product themselves or have an exclusive agreement with a grower, Snyder said.
“A lot of folks in the industry had trouble meeting that,” he said. “I think we will be using the market in that regard, so that anybody licensed for a dispensary or recreational marijuana will be able to use the marketplace to get the product that they sell. … I think competition is a good default position.”
Roundup of other issues
Transportation funding. “We’re looking at funding for maintenance and capacity improvement on our highways, but the bigger goal is mobility — getting people and goods from Point A to Point B,” Beck said. Legislators have met with stakeholders to discuss the issue. “They think the solution is a portfolio approach, … a number of smaller funding mechanisms. It includes transit, bike options and technology improvements.”
Revision of Colorado Corporate Code. It sounds drastic, but “the changes we’re making are pretty wonkish and academic … to bring the corporate code up to the level that it has evolved to in other states,” said Sen. Pete Lee, D-Dist. 11. “The Model Business Corporation Act, uniform laws that deal with corporations and court decisions that interpret provisions of the code — all of those things are harmonized in this bill.” It won’t impact business operations, Lee said.
Child care tax credit. Good Business Colorado has been hearing from members that the lack of affordable and quality child care is a barrier to keeping people in the labor force. A bill sponsored in the House by Rep. Tony Exum, D-Dist. 17, would extend the state income tax credit for child care expenses to individuals with adjusted gross incomes of $25,000 or less.
Public health care option. “It’s really difficult for small-business owners to purchase a health plan,” Railey said.
A bill introduced last month would require certain state agencies to develop and submit to the legislature a proposal concerning the design, costs, benefits and implementation of a Medicaid-like state option for health care coverage that would give small businesses the option of buying in. There’s also interest on both sides of the aisle to address the issues of surprise medical bills for a provider not covered in a network.
Prescription drugs. A bill that would require the state Department of Health Care Policy and Financing to design a program to import prescription pharmaceuticals from Canada for sale in Colorado was advanced in January by the Senate Health and Human Services Committee. If the program were created, it would require federal approval before it could take effect. Lawmakers also are expected to revisit the issue of drug price transparency. A bill that would have required health insurers to submit more information to the state commissioner of insurance regarding the prescription drugs they cover and drug price increases of more than 10 percent died in the last session.