Colorado and Arizona lawmakers are seeking to prevent a $1.6 billion contract from going to a company called Seo that helps companies hide money offshore.
Sen. Steve Daines, R-Mont., said the proposed legislation would give states more oversight of offshore companies and the way they are used.
“They should be held accountable for who they use offshore and who they invest their money in,” he said.
Daines said the company Seo helps companies avoid taxes is a threat to the economy and taxpayers.
“We’re not talking about a corporation that’s doing good in the world,” Daine said.
“We’re talking about companies that are trying to get away with the crime of making a bad investment.”
A spokesman for the Colorado Chamber of Commerce, which supports the bill, said the chamber does not support offshore tax havens.
The proposal has gained bipartisan support in the Senate, where Democrats have the votes to pass the legislation.
But Republicans say it would be a disaster for Colorado, where the state’s unemployment rate is near 5.5 percent and a recent report showed the state had one of the worst tax climates in the nation.
“I don’t know how you can do it in the states that are not very big and where you’re going to have a very high rate of unemployment, especially in rural areas,” said Sen. Mike Fortenberry, R, Fort Worth.
The company Seoan has faced controversy before.
A 2008 audit found that it paid less than half the tax on income from investments, a violation of a law meant to protect taxpayers.
The state auditor also found that Seoan paid $30 million to a Chinese firm that had contracts with the state to help hide money.
The Colorado legislature passed a bill in 2013 that required Seo to provide the names of foreign tax havens that it uses and to disclose them publicly.
But the company refused to comply.
The bill passed in 2016 but stalled because of an ongoing lawsuit over the use of a loophole in state law to help avoid paying taxes.