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Back-To-School Tax Break Bill Defeated

DENVER (AP) - A proposed tax break on back-to-school shopping on clothes, computers and school supplies has been defeated in the closing days of the Colorado Legislature.

A Senate committee rejected the proposal Monday despite the fact that the tax break already cleared the House and had bipartisan support, including Democratic Senate President Brandon Shaffer.

"I was really surprised," Shaffer said after the vote. "I tried to work that bill and get the support. I just wasn't able to convince my colleagues."

The tax break would have waived state sales taxes on low-cost clothing, computers and school supplies during a three-day "sales tax holiday" in August. It would have taken effect only if personal incomes rise, as they're expected to. A fiscal analysis prepared for lawmakers predicted the change would save consumers some $4.5 million in sales taxes if it took effect, likely in 2014.

Tax holiday sponsors included two Democrats leaving the Legislature to run for Congress - Shaffer, who is challenging Republican Rep. Cory Gardner in eastern Colorado, and Rep. Joe Miklosi, who is challenging Republican Rep. Mike Coffman in the Denver suburbs. Republicans in the House also supported the measure, as did some Senate Republicans.

But the proposal had critics on the right and left who argued the popular tax break used in several other states doesn't really help the economy and has marginal benefit for shoppers.

Some Republicans decried the tax holiday as a gimmick that does little to boost retailers. And some Democrats argued that waiving the state sales of 2.97 percent would be so marginal as to make little difference for needy parents - though schoolchildren could suffer because of less overall tax support for schools.

Even if the back-to-school tax break had cleared the Senate, its prospects were uncertain.

Senators changed the bill, meaning it would have had to return to the House for further negotiations in the closing hours of the legislative term. Lawmakers must agree on a single version of a bill before it can go to the governor for his signature.

- By Kristen Wyatt, AP Writer

LINK: House Bill 1069

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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