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Issue Date: Vol. 49, No.5, May 2009, Posted On: 4/28/2009

UPDATED: Colorado Lawmakers Kill Proposed Tax On Vended Food

by Staff Reporter
Vending, Vending Machine Automatic Retailing, Coin-Op, Coin-Operated, Vending Machine Tax, Food Tax, Cigarette Tax, Taxation, Tax Exemption, Small Business, Jack Pommer, Lou Langdon, G&S Vending

DENVER -- A plan to eliminate a sales tax exemption on food purchased from vending machines in Colorado was killed this past weekend before it reached the state Senate for debate. If it had passed, the bill would have slapped a 2.9% tax on vended food.

Lawmakers originally estimated that the removal of the exemption would generate about $9 million. However, the vending industry presented figures showing that the tax would only raise about $2.3 million in tax revenue.

Opponents said the tax, outlined in House Bill 1355, would unfairly force consumers to pay more for snacks at their workplaces, and that it's the wrong message to send in an economic recession.

Lou Langdon, president of G&S Vending (Denver), was among the industry officials who helped to change the minds of lawmakers. He told the Denver Post that there would be a possibility of G&S going out of business if the bill passed, explaining that vending companies already operate on slim margins. He also stressed that the same food items sold in convenience and grocery stores aren't taxed.

Rep. Jack Pommer (D-Boulder), who initially sponsored the vended food bill, later asked the House Appropriations Committee to shutter it. “I asked the committee to kill the bill because Mr. Langdon convinced me that removing the sales tax exemption would be unfair to companies with long-term contracts and would also put vending machines at a competitive disadvantage,” Pommer told VENDING TIMES.

[EDITOR’S NOTE: VT incorrectly reported in an earlier story that HB 1355 passed though the House Appropriations Committee in late April with all six Democratic representatives voting in favor of the plan and all five Republican members voting against it. In fact, the bill did not pass through the committee.]

The vending tax exemption was among more than two-dozen issued by lawmakers in 2000, well before the present economic recession. Pommer pointed out that these add up to roughly $700 million in revenue that the state does not currently receive.

Another new House bill proposes to lift a tax exemption on cigarette sales, including those sold though vending machines. If repealed, it is expected to generate $29 million for the state. If signed into law, it would also impose a 2.9% tax on vended cigarettes beginning July 1, 2009.

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