Date: 03/11/2009

Presentation about Colorado's Tax Structure


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01:05 PM -- Presentation about Colorado's Tax Structure

Mr. Ron Kirk, Legislative Council Staff (LCS), presented to the Joint House and Senate Finance Committee. The presentation focused on how Colorado ranks in its tax structure to other states in the U.S. He provided the committee with a summary of the presentation (Attachment B) and a memorandum about how Colorado compares in state and local taxes (Attachment C). Mr. Kirk stated that two measures are used to calculate the tax rankings. The first measure is based on $1,000 of personal income, and the second measure is based on per capita income rankings. He began by illustrating how a tax dollar that is paid in Colorado is allocated between state, local, and federal governments. He also provided information about the distribution of state and local taxes.

09JointFin0311AttachB.pdf 09JointFin0311AttachC.pdf

Mr. Kirk stated there are two things that make Colorado's tax structure unique. The first, he explained, is the limits that are placed on revenues and expenditures at the state level. The second factor that makes Colorado unique, he said, is that the state has a very decentralized tax structure, which makes local governments dependent on the revenue that is raised. Mr. Kirk explained that Colorado is the fifth lowest in the nation in combined state and local tax burden. He also provided background about the history of Colorado's tax structure and historical precedents that were set about property taxes.

01:12 PM

Mr. Kirk continued the presentation by discussing property taxes. The state ranks 32nd in the nation in combined property taxes per $1,000 in income. He also provided information about sales and use taxes, stating that Colorado ranks 23rd in the nation in combined sales and use taxes per $1,000 in income. Mr. Kirk stated that several of these rankings do not change often because many parts of Colorado's tax code are affected by the federal tax code, which cannot be decided by the Colorado General Assembly.

Mr. Kirk said that state tax burdens move in tandem with federal tax burdens. He said Colorado ranks 28th in the nation (slightly below the medium) on state individual income taxes per $1,000 in income.

01:18 PM

Mr. Kirk concluded the presentation by providing information about the main tax sources for local governments and the breakdown of who pays property taxes in Colorado. Mr. Kirk responded to questions from the committee about the history of Colorado's tax system, flat tax rates of the past, individual income taxes, and tax rankings. He also responded to questions about the research that is conducted by the Department of Revenue about taxes paid in Colorado.

01:23 PM

Mr. Kirk responded to questions about severance taxes in Colorado and how this tax burden compares with other states. He stated the rankings in the memorandum are arrived at using U.S. Census Bureau data, and that the $1,000 of personal income measure allows for a smoother comparison between severance taxes in several states. Mr. Kirk responded to questions about the history of severance taxes in the state.

01:26 PM

The committee adjourned.