A Bill for an Act
Page 1, Line 101Concerning adjustments to the insurance premium tax rate
Page 1, Line 102tax expenditure for a home office or regional home
Page 1, Line 103office.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill, beginning in the 2026 calendar year, repeals the insurance premium tax rate tax expenditure for a home office or regional home office.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. Legislative declaration. (1) The general assembly
Page 2, Line 3finds that, based on the office of the state auditor's 2 evaluations of the
Page 2, Line 4reduced insurance premium tax rate for a company with a home office or
Page 2, Line 5regional home office in Colorado, the reduced insurance premium tax rate
Page 2, Line 6was designed to create an incentive to maintain a substantial workforce
Page 2, Line 7presence in the state. However, even with amended criteria enacted in House Bill 21-1312:
Page 2, Line 8(a) The insurance premium tax rate tax expenditure has not met
Page 2, Line 9its intended purpose since, as evidenced by the office of the state auditor's
Page 2, Line 102020 and 2025 evaluations of the tax expenditure, the hiring and
Page 2, Line 11investment levels of the vast majority of all insurance companies claiming
Page 2, Line 12the tax expenditure have not been substantially affected by the presence of the tax expenditure; and
Page 2, Line 13(b) In its 2025 evaluation of the insurance premium tax rate tax
Page 2, Line 14expenditure, the office of the state auditor found that, from 2022 through
Page 2, Line 152024, fifteen of the eighteen insurers that claimed the tax expenditure
Page 2, Line 16actually reduced their Colorado workforces by about four thousand three
Page 2, Line 17hundred employees, while the tax benefit that those insurers received
Page 2, Line 18from the tax expenditure increased by approximately seventeen million
Page 2, Line 19five hundred thousand dollars. Moreover, the reduction in the Colorado
Page 2, Line 20workforce of those Colorado insurers that claimed the tax expenditure
Page 2, Line 21occurred during a period when the number of insurance jobs increased nationally.
Page 2, Line 22(2) The general assembly further finds that:
Page 2, Line 23(a) The primary purposes of repealing the reduced insurance
Page 2, Line 24premium tax rate for a company with a home office or regional home
Page 3, Line 1office in Colorado are to better align the state's insurance premium tax
Page 3, Line 2code with the tax codes of other states, so that Colorado is less of an
Page 3, Line 3outlier regarding how insurance taxpayers compute their taxes owed, and
Page 3, Line 4to streamline insurance premium tax statutes by eliminating a tax expenditure that is not meeting its intended purpose; and
Page 3, Line 5(b) Any revenue gain that results from the improved alignment of
Page 3, Line 6the state's insurance premium tax code with the tax codes of other states and the streamlining of the insurance premium tax statutes is:
Page 3, Line 7(I) Incidental to the primary purpose of better aligning the state's insurance premium tax code with the tax codes of other states; and
Page 3, Line 8(II) De minimis.
Page 3, Line 9(3) Therefore, the general assembly declares, consistent with the
Page 3, Line 10Colorado supreme court's holding in TABOR Found. v. Reg'l Transp.
Page 3, Line 11Dist., 2018 CO 29, that legislation causing only an incidental and de
Page 3, Line 12minimis tax revenue increase does not amount to a new tax or a tax policy
Page 3, Line 13change that requires advance voter approval under section 20 of article X
Page 3, Line 14of the Colorado constitution, the removal of the reduced insurance
Page 3, Line 15premium tax rate for a company with a home office or regional home
Page 3, Line 16office in Colorado is neither a new tax nor a tax policy change that requires voter approval.
Page 3, Line 17SECTION 2. In Colorado Revised Statutes, 10-3-209, amend
Page 3, Line 18(1)(b)(I) introductory portion and (1)(b)(I)(B); and add (1)(b)(IV) as follows:
Page 3, Line 1910-3-209. Tax on premiums collected - exemptions - penalties
Page 3, Line 20- filing system - division to contract with third parties - rules - repeal.(1) (b) (I) The rate of tax
shall bePage 3, Line 21(B) For direct written premiums in 2025, for companies
Page 4, Line 1maintaining a home office or a regional home office in this state, the rate
Page 4, Line 2of tax on the gross amount
shall bePage 4, Line 3(IV) Subsections (1)(b)(I)(B), (1)(b)(II), (1)(b)(II.5), (1)(b)(II.7),
Page 4, Line 4and (1)(b)(III) of this section and this subsection (1)(b)(IV) are repealed, effective December 31, 2026.
Page 4, Line 5SECTION 3. Safety clause. The general assembly finds,
Page 4, Line 6determines, and declares that this act is necessary for the immediate
Page 4, Line 7preservation of the public peace, health, or safety or for appropriations for
Page 4, Line 8the support and maintenance of the departments of the state and state institutions.