As the 2026 Colorado legislative session approaches, the General Assembly must make one thing clear: small businesses are not the enemy.
Because time and again, state policy treats them as if they are.
In an increasingly hostile regulatory environment, with a cooling economy and rising costs across the board, Colorado’s small businesses need relief, not another squeeze. Mom and pop shops are still digging out from the damage of the pandemic nearly six years later. Many never recovered. Others are barely hanging on.
At the same time, Colorado continues to rank among the most heavily regulated states in the nation. According to a study by the Colorado Chamber of Commerce, our state ranks sixth overall for regulatory burden, driven largely by environmental and labor mandates.
For large corporations, these costs can be absorbed. For small businesses, they are often the difference between survival and closure. Every new rule brings administrative costs, licensing fees, compliance requirements, and legal expenses. These are not abstract concerns. They are real dollars that small business owners must pay before they can hire another employee, expand their operation, or even take a paycheck themselves.
Yet when these costs inevitably show up in higher prices, some in the legislature accuse small businesses of price gouging. That argument ignores basic economics. Businesses cannot operate at a loss and stay open.
One of the clearest examples of the legislature’s misplaced priorities is the repeal of the vendor fee during the special session last August. The vendor fee was not a loophole. It was not a handout. It was a partial reimbursement for the administrative burden the state places on businesses by requiring them to collect and remit sales taxes on its behalf.
In other words, the vendor fee paid to businesses acknowledged that small businesses are acting as unpaid tax collectors for the state. Supporters of the repeal dismissed the vendor fee as insignificant, claiming it averaged just $60 to $100 per month and insisting that the money belonged to the state anyway.
That framing could not be further from the truth. I heard directly from small business owners who relied on that deduction and who saved as much as $600 per month because of it. For a large corporation, that amount might be negligible. For a family-owned business operating on thin margins, it pays an electric bill, or covers payroll taxes.
Worse still, many business owners did not even realize the vendor fee had been repealed until they went to file their taxes. The legislature made a significant policy change with real consequences, and the people most affected were often the last to know. We were told sacrifices had to be made. Yet instead of meaningful budget reforms, the state quietly raised the tax burden on small businesses that are already struggling to stay afloat. That is not shared sacrifice. That is bad governance.
My perspective on this issue is shaped by experience. During the pandemic, I worked as a banker. I watched PPP funds disappear in a matter of hours. I saw small business owners in tears, desperate to keep their employees paid and their doors open. Many were more worried about their workers than themselves. I also saw how larger corporations, with teams of lawyers and accountants, were able to secure relief that many true small businesses never received.
That experience stays with you. It is impossible to forget the feeling of knowing help exists but being unable to get it to the people who need it most. Since then, state policy has only made things harder.
Energy mandates are another example. As Colorado pushes toward aggressive clean energy goals, the cost of compliance for small businesses is staggering. Electrification, new equipment requirements, and infrastructure upgrades come with massive price tags. Policymakers often talk about these transitions as if they are simple switches to flip. They are not.
A strong economy depends on affordable, reliable energy and a regulatory environment that allows businesses to plan, invest, and grow. When lawmakers accelerate timelines and pile on mandates, small businesses are the first casualties.
I urge my colleagues to reconsider the path we are on. As a member of the House Business Affairs and Labor Committee, I will continue to fight for meaningful relief for small businesses. That includes revisiting the repeal of the vendor fee and pushing back against policies that treat small business owners as a convenient revenue source.
The reality is this: many Coloradans are focused on federal politics while missing what is happening much closer to home. It is state policy, not Washington headlines, that is hitting families and businesses the hardest. If we truly care about affordability, community stability, and economic opportunity, we must stop attacking the very businesses that keep our communities alive.
Ryan Gonzalez is the representative for Colorado’s State House District 50. He is the son of Mexican immigrants and a first-generation American.
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