From a press release from Colorado’s House staff yesterday:
A bill limiting a tax evasion scheme used by Wal-Mart and other large corporations is on its way to Governor Bill Ritter after final passage by the House this morning [Mar. 11th]. Sponsored by State Representative Claire Levy (D-Boulder) and Senator Jennifer Veiga (D-Denver), House Bill 1093 aims to increase corporate transparency, disclosure, and fair payment of taxes owed.
The Wall Street Journal and others have noted that Wal-Mart pays itself rent and calls that a tax-deductible business expense, thus skirting payment of standard taxes. The Journal notes that Wal-Mart avoided paying $350 million in state taxes between 1998 and 2001.
Rep. Levy explained that federal tax law created REITs to allow small investors to participate in real estate markets that would otherwise require very large amounts of capital. Legitimate use of REITs is not affected by this bill. The bill implements the long-standing policy in Colorado that corporate profits earned in the state are subject to state tax, and it distinguishes between valid Real Estate Investment Trusts and Captive REITs such as Wal-Mart.
This is at least in part due to the Cons’ insistence that responsibility for actions be expected. They were talking about personal responsibility while hypocritically turning a blind-eye to corporate responsibility. It’s bills like this that make me glad the Democrats are in control of Colorado’s government. Thank you, Rep. Levy and Sen. Veiga.