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Dennis Brian Vickery, Mantis Technology Group
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Key Messages to Why this Tax is Important to YOU!
Use these key messages to highlight in your Facebook/Twitter/LinkedIN posts, comments in articles, emails, phone calls etc. to encourage more participation from our community and help educate others on WHY this bill so important.  Also, TAKE ACTION formally, by emailing your representatives >>

See what others are saying and comment on these articles and or blogs:

9 News Segment  |  The Coloradoan |  Denver Post  |  Community Blog Mentions of HB1192  | ColoradoBiz

DBJ Article -  "Surprise: Denver seeks more IT taxes than state” 
Denver Post Article "Lawmakers predict court fights on ending tax breaks"

As a reminder here are 7 key reasons why this bill is so damaging to users of technology and the software/IT industry: 

1.  All companies across all industries who use software would be required to pay sales tax on all software they purchase or download, based on the number of employees in Colorado who use the software.  Imagine what this will mean for companies who employ large numbers of people in the state?  What about companies who have operations outside of the state?  Not only will it assess tax for Colorado employers, but companies who can move projects or work outside the state will have a legitimate and economic reason to do so.  If your company is a regional operation, it means you will have to assess the software used by your Colorado employees, no matter where the software is purchased or loaded.

2.  For data centers in the state, all of the software used in the center will now be taxed, no matter if you purchase via download or through a licensing agreement.  That's on top of the taxes you already pay for hardware and equipment. 

3.  For those of you who develop software, if you have one user, no tax.  As soon as a second user is sold, your software becomes taxable.

4.  If you develop software and have identified a potential sale as part of your exit, be very careful.  The software you develop may become taxable at the time of sale, making it harder for you to sell.

5.  While we appreciate the efforts made last week with Senator Heath and others, we continue to be concerned about the interpretations that will be made by the Department of Revenue, especially after it is promulgated. All companies in the state will be asked to follow these regulations, even though the Department of Revenue suggests that all communications, clarifications, and information can be handled with only one new full-time employee (but no mention about part-time or contracting that would be necessary, adding even more cost). 

6.  Colorado will become one of only 12 states in the US with such costly taxes on software, so our neighboring states like Utah and Wyoming are already identifying ways to encourage you to move operations or set up additional offices.  Washington, California, Florida and others have looked at taxes like this and decided NOT to have them because of the huge consequences for their tech industries.  All together, there are nearly 40 other states who have chosen not to enact such costly regulations - regulations that will hurt not only software and IT companies, but all industries who utilize software and technology.

7.  Though this tax is being promoted as only a 2.9% state tax, remember that in Colorado, local jurisdictions, counties and others add in theirs as well, so the new tax will actually become more like 7 - 10% in new taxes. 


So what can you do?  

Use your networks to push this information out – challenge the removal of the amendment that would have kept 40% of all new revenue for K-12r encourage business leaders within your networks to continue commenting on this bill and its negative impacts.   Let our important elected officials know that if they oppose the bill, we appreciate their support of our industry.  If they are supporting the bill, please ask them why they now no longer want the new revenue to go towards education.


More Information:
  • This tax is not just a software tax on the software industry. Every person, every business, every industry will pay this NEW tax for all software used by Colorado employees - which creates a tax only for jobs in our state.   

  • HB 1192 creates a NEW tax and is different from the other tax bills because that which is proposed to be taxed has NEVER been taxed. This new tax is a clear violation of TABOR and SHOULD require a vote of the people.  

  • This new sales tax applied to software is not limited to the 2.9% state sales tax rate; statutory cities and counties will impose their own local sales tax with home rule cities soon to follow – resulting in a 8 – 10% tax depending upon where you live.  

  • HB 1192 will slow venture investment in Colorado’s software and IT industry. This bill creates an environment which is less appealing for investment than other states – this new tax will drive businesses and jobs out of Colorado.  

  • Key growth industry sectors, cornerstones of Colorado’s economy, like bioscience, aerospace, financial services, health care, and renewable energy rely heavily on software and will take the blunt of this new tax and make it more difficult to drive innovation and stay competitive in the global marketplace.
  • HB 1192 is a brand new tax on which Colorado taxpayers will not have an opportunity to vote – a direct violation of our state Constitution.
    • This new software tax is being lumped together with twelve other exemption/credit reversals in an effort by supporters to rush this through legislation. The new software tax is a separate and highly problematic new tax that will have a devastating impact to Colorado’s economy.

  • HB 1192 will cost Colorado jobs and give us the reputation of being unfriendly to business. 
    • The more than 175,000 professionals in this industry earn an average of $88,000 per year - more than twice the median salary of all Colorado professionals in the state. Within our industry, employers are announcing plans to cut jobs or leave the state if this bill is passed.

  • This bill will raise taxes on ALL businesses in Colorado who use technology. 
    • Your veterinarian, favorite restaurant, bakery, hair salon, telephone company, cable company, brewery, etc. will be impacted if they use software. This could stifle new job growth and cause existing/new jobs to go elsewhere.
    • While supporters are estimating $20.4 million revenue from this tax in the next year, we expect the revenue loss from the technology industry to far surpass that amount.

SAMPLE TWEETS
  • Contact your senator – new software tax will hurt economy, job growth  #noCOsoftwaretax http://bit.ly/78gGxf
  • NEW TAX on software will hurt CO economy. Senate vote 2/10. Learn more and contact your sen. here http://bit.ly/78gGxf #noCOsoftwaretax
  • Sate Legislators are fast tracking a devastating new software tax http://bit.ly/78gGxf - contact your rep - #noCOsoftwaretax
  • More than 175,000 professionals in Colorado need a voice – contact your senator http://bit.ly/78gGxf  #noCOsoftwaretax
  • NEW SOFTWARE TAX will hit all businesses; Colo. economy hard. Learn more and contact your rep here http://bit.ly/78gGxf #noCOsoftwaretax
  • NEW SOFTWARE TAX will cost jobs and companies will move jobs out of Colorado -tell your sen to vote no http://bit.ly78gGxf #noCOsoftwaretax
  • NEW SOFTWARE TAX will have huge economic cost of more than $1 billion –tell your sen to vote no http://bit.ly/78gGxf #noCOsoftwaretax

SAMPLE STATUS UPDATES
  • A NEW software tax is up for vote on Wednesday that will have a devastating impact on Colorado’s economy, job growth. Act now - contact your Senator http://bit.ly/78gGxf
  • NEW TAX to cost companies at least $1B and hurt a multi-billion-dollar industry, and the Colorado economy. Act now and contact your Senator. http://bit.ly/78gGxf
  • NEW SOFTWARE TAX will impact more than 5,500 IT businesses and nearly 175,000 professionals in Colorado’s software industry who already pay nearly $2 billion in taxes already!  Contact your Senator today http://bit.ly/78gGxf

SAMPLE COMMENTS
  • If passed, this job-killing legislation will place a new tax on any software purchased or installed in Colorado, which will have devastating impacts on job growth and our economic recovery.
  • The technology industry is a critical cog in Colorado’s economic wheel. There are more than 5,500 software/hardware/IT services businesses and nearly 175,000 well-paid professionals in Colorado’s software industry who provide more than $1 billion - in taxes alone to the state of Colorado. Why does Governor Ritter want to hurt that?  Why do our legislators want important IT jobs to move OUT of Colorado?  We were just starting to see the economy rebounding, and now we have this?!
  • HB 1192 will cost Colorado jobs and give us the reputation of being unfriendly to business. Why does our state legislators want to impact our state’s ability to recover?
  • Economic developers from neighboring states like Wyoming and Utah already have daily conversations with Colorado’s software companies about moving projects and jobs to their states. If HB 1192 passes, companies will start to listen. Why do our state legislators want to send jobs to Wyoming and Utah and more than 35 other states who will have less confusing and far less costly taxes for software companies and IT professionals.
  • Although this new tax will have the most devastating impact on the software industry, no business will be immune to its negative affects. Other industries that rely heavily on software – including aerospace, renewable energy, bioscience, telecommunications, financial services and tourism – will also be hurt in a major way.  Why do our legislators want them to fall backwards?
  • HB 1192 is a brand new tax on which Colorado taxpayers will not have an opportunity to vote – a direct violation of our state Constitution.
  • If passed, Colorado will be one of only 12 states with this type of tax; of the 11 other states, most have offsetting incentives to keep technology companies within their state. Colorado will have no incentives to keep and encourage new technology companies in our state.
  • HB 1192 will actually end up costing Colorado money. Ironically, although the State’s budget office projects an additional $15 million per year in tax revenue thanks to this legislation, the long-term impacts would result in a net loss of revenue to the state and would greatly hinder our economic recovery.