Colorado State Business Income Tax Deduction Limit, Referendum H (2006)

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Colorado Business Tax Act, Referendum H was on the November 7, 2006 ballot in Colorado as a legislatively-referred state statute, where it was approved.

Election results

Referendum H
Approveda Yes 744,475 50.74%

Ballot wording

The official ballot question read:

Shall state taxes be increased $150,000 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 specificied 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 argue that Referendum H is part of a broad strategy for addressing the illegal immigration problem at the state level. It targets the employment of unauthorized aliens, the root cause of illegal immigration. As long as job opportunities for exist, the incentive to come to Colorado or overstay visas will persist.

Supporters argued that by discouraging the hiring of unauthorized aliens, Referendum H reduces 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. By reducing the number of jobs available to unauthorized aliens, more job opportunities will be open to Colorado residents.[1]


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 believe 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.[1]

Campaign finance

Donors to the campaign for the measure:[2]

  • Defend Colorado Now: $179,133
  • Total: $179,133

See also

Suggest a link

External links