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D1E4891699F574DD8725873B00528AB5 Hearing Summary




PUBLIC
BILL SUMMARY For TAX EXPENDITURES AND TAX EXPENDITURE EVALUATION

INTERIM COMMITTEE  LEGISLATIVE OVERSIGHT COMMITTEE CONCERNING TAX POLICY & TASK FORCE
Date Aug 24, 2021      
Location HCR 0112



Tax Expenditures and Tax Expenditure Evaluation - Committee Discussion Only


09:01:37 AM  
Katherine Loughead, representing the Tax Foundation, presented to the committee.

A copy of the presentation can be found here: https://leg.colorado.gov/sites/default/files/images/committees/2017/tax_...

Ms. Loughead's presentation covered the following topics:
- principles of sound tax policy;
- common types of tax expenditures;
- structural versus preferential tax expenditures;
- why the evaluation of tax expenditures is important;
- the effectiveness of tax incentives; and
- questions to ask when evaluating tax expenditures.

Throughout the presentation, Ms. Loughead responded to questions regarding the net operating loss deduction, the aspects of a broad-based and competitive tax code, and making all services subject to sales tax.

09:36:50 AM  
Ms. Loughead concluded
her presentation and responded to questions from the committee regarding
the effectiveness of tax incentives designed to attract new businesses
to a state and if any other states require businesses to pay back incentives
if the business doesn't meet the original objectives of the incentive.
09:40:25 AM  
John Hamman, representing The Pew Charitable Trusts, presented to the committee.

A copy of the presentation can be found here: https://leg.colorado.gov/sites/default/files/images/committees/2017/pew_...

Mr. Hamman's presentation covered the following topics:
- why it is necessary to evaluate tax expenditures;
- how different states approach the evaluation of tax expenditures;
- the components of high-quality evaluations;
- a history of Colorado's tax expenditure evaluation process;
- how other states have been using tax expenditure evaluations to inform policy;
- questions to consider when evaluating tax expenditures; and
- success stories from tax expenditure evaluations in Maryland and North Dakota.

Throughout the presentation, Mr. Hamman responded to questions from the committee regarding how to measure business activity that would have occurred without a specific tax incentive.

10:10:50 AM  
Mr. Hamman concluded his presentation and responded to questions from the committee regarding the changes made to Colorado's tax code during the 2021 legislative session and whether tax expenditures should be evaluated in groups, for example by industry or purpose.

Ms. Loughead also responded to questions from the committee about the evaluation of tax expenditures in groups.

Mr. Hamman and Ms. Loughead continued to respond to questions from the committee about making services subject to sales tax and how Colorado compares to other states in regard to the competitiveness of the state's tax code.






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NORTH ENTRANCE IS CURRENTLY CLOSED.  TO ENTER THE CAPITOL, USE THE SOUTH ENTRANCE, UNDER THE STAIRS, AT 14th AVENUE AND SHERMAN STREET.