Members of the House State Affairs Committee unanimously passed a bill to revise bank franchise taxes. House Bill 12-01 updates the state’s share of bank receipts based on where a customer is located rather than where the bank activity takes place.
State Revenue Secretary Andy Gerlach says the policy has not been changed since 1979. He says current laws do not reflect business models.
"Under our current tax structure I don’t think that we could legally enforce what we have there particularly with large multi-state banks. If I would put a number to that I think that that would put our bank franchise tax revenues from just taxes alone in this state at about four million dollars from our estimate," says Gerlach. "If we make this change to a customer-based or marketing-based approach then our estimates are that our bank franchise tax would be anywhere from eight to ten million dollars per year."
Proponents of the bill say the move to a consumer-based approach makes sense in a changing bank industry.
House Bill 12-01 goes now to House floor.