Colorado Lawmakers Debate Impact of Ending Vendor Fee on Small Businesses

The Colorado Senate convened for its 2025 1st Extraordinary Session on August 25, focusing on critical discussions surrounding House Resolution 1 (HR 1) and its implications for job creators in the state. The session highlighted concerns regarding the proposed elimination of the vendor fee, which compensates businesses for collecting state taxes.

The meeting began with a passionate address from a senator who emphasized the importance of job creators, including various types of corporations and nonprofit organizations. The senator expressed deep concern over the decision to not reimburse these entities for their tax collection efforts, describing it as a significant burden that undermines their contributions to the economy. "As a job creator myself, this just kinda punches me in the gut," the senator stated, advocating for a resolution that would fairly support those who create and maintain jobs in Colorado.

Following this, Senator Carson echoed these sentiments, warning that the removal of the vendor fee would adversely affect small businesses. He pointed out that these businesses act as agents of the state in tax collection and would be expected to absorb the costs associated with this change. Senator Carson raised critical questions about the potential consequences of increased tax burdens on retailers, suggesting that such measures could lead to difficult choices for businesses, including raising prices, hiring fewer employees, or delaying employee raises and benefits.

The discussions underscored a growing concern among lawmakers about the impact of HR 1 on the state's economic landscape, particularly for small businesses that play a vital role in job creation. As the session progressed, the need for a balanced approach that considers the welfare of job creators and the overall economic health of Colorado became increasingly apparent. The meeting concluded with a call for further deliberation on the bill, emphasizing the importance of finding common ground to support the state's businesses and their employees.