You may have heard by now that Governor Ritter is rushing a new tax on software through legislation at an unprecedented rate, with an effective date of March 1, if passed. The bill proposes a new tax on any software purchased or installed in Colorado. Yes, a tax on software. Wait, it’s worse.
It’s unclear that this new tax is even constitutional as none of us will be given the chance to vote on the issue!
We’re making huge progress in making sure Colorado is known as a great place to build software companies. Colorado is now on the map as a friendly place for software companies to build and sell their products. We’re seeing software company M&A activity and employee growth here when most states are not. Now the Governor wants to undermine our efforts without even asking the voters what they think? We all need to react and talk some sense into them, and fast.
Let’s look at some specific impacts that a tax like this would have:
Governor Ritter: We’re trying to create jobs here by funding innovative companies. We want them to come here. And they’re coming here, because we’re so supportive of them. Please don’t undermine our efforts to make Colorado an amazing place to build software companies. Trust me, they’re going to stop coming here. And that means people like me (and area VCs) are going to invest less here. That is so unbelievably disappointing at a time when we’re making fantastic progress and so many good things are starting to happen.
We don’t have much time. Take these actions TODAY. Not tomorrow – now.
Thanks for your help, and to the CSIA (more there) for leading the charge on this. Let’s let our legislators know that this won’t have the intended effect and that’s it’s a stupid idea that will set our innovation economy back significantly.
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Yea, I guess you are right. I missed the mass layoff the State/County had the other day. Oh wait, there wasn't one. They are suffering real bad right now. (see PERA).
Arnold isn't a Republican anymore and hasn't been for years, pay attention. Go listed to Don and Mike sometime, you might learn something.
This is not the only bill that will affect small businesses. The entire package of 11 bills is a business killer. The DEMS are mislead if they think this will cut the budget hole. They will open up holes all over the place and then run for cover. My businesses might have to shut down if HB1193 is signed into law. There other ways to trim the budget, but the DEMS are only looking for the so-called easy targets. But they fail to look beyond the horizon to see the dark clouds ....
I own a small software company, started in 2002. We are currently running on a razor-thin budget due to this recession. We are now down to two people, myself and co-founder. We have cut our company to the bone in order to stay somewhat afloat.
Now we face new taxation, which could be the tipping point that makes us close shop. Cool! Two more unemployed in the unemployment line! Net gain or net loss? You decide.
So for you defenders of this bill, enjoy! When they decide to reach into your pocket or run you out of business, I'm sure you'll be able to console yourself with the idea that they are doing it for the "greater good" or that they are simply removing an exemption to get their rightful due. CU needs more funding! K-12 needs higher salaries! More roads! More bridges! More prisons! More laws! More taxes! Hey, we are our brothers' keepers, right?
Enjoy. You'll get yours before you know it.
Thank you for the heads-up on the new tax. I'm not opposed to the state trying to raise more tax revenue, but the manner needs to be clear and fair for everyone. How exactly is the state going to monitor a tax on downloaded software?
For a Republican doing the same in the same situation, see: Arnold in California.
It's not like spending cuts aren't being made. They are, and they are very deep, to the extent that the (R) side of the aisle isn't too happy about them either. (For example, cuts to the prison system via earlier parole for non-violent prisoners...)
First, a small apology for being somewhat combative on Friday -- but what good is a commenting system if it doesn't have a debate in it?
Second, a smattering of thoughts:
- The programs on the chopping block are ones that matter; as a personal example, someone close to me would be dead today without them.
- It's not helpful to draw false equivalence between the bank bailouts and paying for roads, teachers, etc. (If I could choose where my tax dollars were spent, 99% of them would go toward state and local governments...) By extension, it's disingenuous to pretend that, by opposing this measure, you're opposing things like the bank bailouts. (This if if that's what you're implying -- you did not give much context around the link you posted.)
- A, if not the, central message of Atlas Shrugged is "Let the world burn." I can see some insight in Rand's diagnoses but it's tragic that her revenge-fantasy prescription is taken so seriously by so many powerful people.
"or provide a pool of well-educated people for tech firms to employ. "
haahaha (see my earlier comment), there ya go right there! Either cut education or tax. Gotta love Demos! How about we donate the 8k stimulus road signs..
My favorite story is over in Morrison, they have paved the same road 3 times because they didn't get it right the first 2. Ah, stimulus money, all those jobs saved or created or something.
"the fact is that a Republican would be doing the exact same thing, given the state's situation, and if Ritter didn't introduce this bill the legislature would have done something similar on their own"
Um, no. A republican would first look at ways to cut spending and not jump the tax train. I love the Demos way of handling budget problems like this. They say "either we cut education or we raise taxes". There NEVER seems to be any other way. You guys voted for him, this is what you get. Have fun.
no, i was saying that you might enjoy reading it to think about the other side of the coin. perhaps not.
Is posting that link a roundabout way of saying you believe that allowing the state government to collapse would be a good thing?
i didn't phrase anything in an intentionally misleading way, and "playing politics" is not something i've ever done. i actually hate politics. Naming the gov was simply an appeal to him. He's been amazing at supporting the growth of the tech industry here in Colorado, and I'm simply expressing my view that this undermines those efforts. Also, I think fundraising letters usually ask for money. Thanks for your comments - but I'm happy to agree to disagree. By the way, this might be a fun read for you: http://online.wsj.com/article/SB12314636356716667...
If you don't want to get caught up in semantics, you shouldn't phrase something in a misleading way. Also: you're playing politics by naming "Governor Ritter" specifically; the fact is that a Republican would be doing the exact same thing, given the state's situation, and if Ritter didn't introduce this bill the legislature would have done something similar on their own. So why not just oppose the bill, instead of making it read like a fundraising letter from the opposite political party?
You know what's unattractive to businesses looking at Colorado? A 1.5 _billion_ dollar budget shortfall, that's what.
I have to disagree. The alleged "damage" that "will be done to the economy" if we revoke tax exemptions for software will pale in comparison to the damage that WILL be done to the economy if we cannot maintain our roads, or provide a pool of well-educated people for tech firms to employ.
This is a VERY limited tax, and while I am sure that the standard suspects will cry that any tax equals a blow to business, how are we going to keep out K-12 and University educations competitive with the rest of the country, much less the world, if you people think so myopically.
We need quality infrastruction and quality education in order to maintain Colorado as a place where high tech can flourish, and this tax is a small price to pay.
Actually, it is broader than simply downloadable software, and I agree, the effects are the same...negative! This is the type of stuff that lands in the legislature at little notice in an effect to stop the bleeding and mismanagement overall. It's an attempt to bandaid our situation with some low-hanging fruit without regard for consequences on the economy overall, but not sure Ritter cares about that...he's leaving anyway.
not sure what you mean about "railing against special interest groups".
Thanks for the note. I've always said we blog to learn.
One of the challenges of this bill being rushed through is trying to get all the facts in such a short time frame. I actually knew that it was removing an exemption. I don't think the statement you pointed out is misleading though. If this passes, we'll be paying tax on software when we weren't before. Let's not get caught up in semantics.
Point taken on the loophole, but it appears the effects are the same regardless of the mechanics.
This quote: "The bill proposes a new tax on any software purchased or installed in Colorado." is misleading. The bill only seeks to remove the current exemption on downloadable software.
I repeat... there is no new tax on software in this bill. They're just trying to close what they consider a loophole that's becoming more and more relevant... electronically-distributed software.
What IS in this bill is a reclassification of downloadable or otherwise electronically-distributed software as "tangible personal property" where it was previously exempted specifically. Also, all the same sales tax rules apply, so its not like you're all of a sudden going to have Bill Ritter knocking on your door counting the number of times you installed Microsoft Office.
It's fine to oppose the reclassification... I myself do. But lets at least be accurate and not spread FUD.
Remember this moment next time you hear someone railing against Special Interest Groups trying to influence legislation, because this is exactly what is happening here in your call to action.
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