Help! The proposed “software tax” stinks

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:

  • Comcast estimates an increase in cost of nearly $1.5 million per year to its Colorado operations.
  • Qwest estimates an increase in cost of nearly $700,000 per year to its Colorado operations.
  • Leading companies like IBM, Qwest, HP and Comcast have major operations in other states. With this new tax, they’d be smart to divert capital and jobs to more business-friendly states like Utah and Wyoming. That means fewer new jobs here.

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.

  • Call Governor Ritter’s office (303-866-2471) to voice your opposition to HB 1192. (If your call is received by someone who says they don’t know what you are referring to, please tell them it is HB 1192, and that it IS a new tax on software not only to our industry but every single business who uses software or employes people who use software in our state. This bill will cause jobs and professionals to move out of Colorado.)
  • Call and email the House Appropriations Committee Members especially Reps. Kathleen Curry and John Kafalas to voice your opposition to HB 1192.
  • Post on Rep. John Kafalas’ Facebook page in opposition of HB 1192.
  • Tweet from your personal and corporate Twitter accounts in opposition of HB 1192. Ensure all tweets include the hashtag #noCOsoftwaretax.
  • Update your Facebook and LinkedIn status’ with one of the sample status updates or your own status update in opposition of HB 1192.
  • Post on your personal or professional blog in opposition of HB 1192.
  • Write a letter to the editor of your local newspaper TODAY in opposition of HB 1192.
  • Encourage all of your employees/colleagues to take these same steps.
  • Forward this blog post your network about HB 1192 and encourage them to voice their opposition.

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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