Colorado State Business Income Tax Deduction Limit, Referendum H (2006)
The Colorado State Business Income Tax Deduction Limit Referendum, also known as Referendum H, was on the November 7, 2006 ballot in Colorado as a legislatively-referred state statute, where it was approved. The measure eliminated a state income tax benefit for businesses that pay an unauthorized alien to perform labor services. It also prohibited certain wages or remuneration paid to an unauthorized alien for labor services from being claimed as a deductible business expense for state income tax purposes if the business knew of the unauthorized status of the alien.
|Colorado Referendum H (2006)|
Election results via:Colorado Secretary of State Elections Department
Text of measure
This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
|“||Shall state taxes be increased one hundred fifty thousand dollars annually by an amendment to the Colorado revised statutes that eliminates a state income tax benefit for a business that pays an unauthorized alien to perform labor services, and, in connection therewith, prohibits certain wages or remuneration paid to an unauthorized alien for labor services from being claimed as a deductible business expense for state income tax purposes if, at the time the business hired the unauthorized alien, the business knew of the unauthorized status of the alien unless specified exceptions apply and, to the extent such a payment was claimed as a deduction in determining the business' federal income tax liability, requires an amount equal to the prohibited deduction to be added to the business' federal taxable income for the purpose of determining state income tax liability?||”|
Defend Colorado Now was the group supporting the measure. Supporters argued that Referendum H is part of a broad strategy for addressing the illegal immigration problem at the state level. They proposed that it targets the employment of unauthorized aliens, the root cause of illegal immigration and claimed that as long as job opportunities exist, the incentive to come to Colorado or overstay visas will persist.
Supporters also argued that by discouraging the hiring of unauthorized aliens, Referendum H would reduced the financial advantage a business gains when it pays lower wages to unauthorized aliens, providing a more competitive environment for businesses that pay higher wages to legal workers and that by reducing the number of jobs available to unauthorized aliens, more job opportunities would be open to Colorado residents.
Opponents argued that Referendum H would likely have little or no impact on illegal immigration. In fact, the proposal only increases taxes if a business voluntarily discloses that it paid wages to unauthorized aliens. They said that Referendum H would not impact a business that pays for services in cash or pays wages to an unauthorized alien who was hired using fraudulent documentation. As a result, no business in Colorado is likely to pay higher taxes.
They further argued that there is little incentive to stop hiring unauthorized aliens, because a business can get a federal tax break worth at least five times as much as the additional taxes owed to Colorado under this proposal.
Opponents believed that illegal immigration is a national issue, and therefore it is the responsibility of the federal government to enforce and protect the country's borders. Hiring unauthorized aliens is already against the law, so the issue Referendum H addresses would not exist if current laws are enforced.
Donors to the campaign for the measure:
- Defend Colorado Now: $179,133
- Total: $179,133
- Colorado 2006 ballot measures
- List of Colorado ballot measures
- 2006 ballot measures
- History of Initiative & Referendum in Colorado
- Colorado Blue Book on Referendum H
- History of Referendum H
- November 7, 2006 ballot measure election results in Colorado
- Colorado State Legislative Council, "Ballot History," accessed February 26, 2014
- Secretary of State elections office, "2006 Amendments and Referenda," accessed January 7, 2014
- 2006 Colorado Blue Book, "Analysis of the 2006 Ballot Proposals," accessed February 26, 2014
- Follow the Money, "Donors to Referendum H," accessed February 26, 2014
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