Yesterday, Governor Bill Ritter signed nine laws that eliminated or limited tax exemptions for nine items including soda and candy. The state's 2.9% sales tax will now apply to:
* direct mail material (HB1189)
* sales of candy and soda (HB1191)
* energy used in any industrial or manufacturing process (HB1190)
* downloaded software (HB1192)
* online retail sales including out-of-state online sales (HB1193)
* "non-essential" food items purchased by restaurants such as napkins and plastic eating utensils (HB1194)
* some agricultural compounds such as pesticides and bull semen (HB1195)
Additionally, HB1196 will limit the income tax credit that may be taken for alternative fuel vehicles, and HB1197 will limit the amount of net operating income losses businesses may take on their state tax returns.
The laws affect the full range of state economic sectors, consumer, agricultural and business and are expected to add $15.6 million to the state's income for the current fiscal year and $102.3 million for the next fiscal year. The governor and legislators are wrestling with a $2.2 billion shortfall in this year's state budget and a $1.3 billion shortfall in next year's budget.