Businesses Carry Brunt of Property-tax Burden

Paula Moore, The Denver Business Journal
July 6, 2000

One way Colorado home owners keep their property taxes relatively low has caused businesses’ property taxes to go up at a faster clip.

Property tax revenues rose 9.3 percent to $3.5 billion in 1999, their largest percentage jump in the last 10 years, according to a recent report from the Colorado Public Expenditure council in Denver.

But during the same period, from 1989 to ’99, assessed values of Colorado real estate rose a lot more than that. Assessed valuation that form the basis for property taxes shot up 60 percent, and businesses digested more than half that increase because of the Gallagher Amendment. Party of a 1982 law, the amendment requires a 45 percent-to-55 percent ration between residential and commercial property assessments.

A piece of real estate’s assessed value is a percentage of its actual value. Last year, a business property’s assessed value was 29 percent of its actual value, while a home’s assessed value was 9.7 percent of its real value.

“Property tax puts more of a burden on business, from huge companies like Sun Microsystems to little mom-and-pops,” said Tari Vickery, the council’s research director. “And we have a new ballot initiative coming up, Tax Cut 2000, that will burden businesses even more. It could cause a lot of businesses to examine positions in Colorado.”