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) Insurance companies continue to qualify for the rate reduction
Page 2, Line 9despite not maintaining or increasing their overall employment in Colorado; and
Page 2, Line 10(b) The benefit that insurance companies receive from the rate
Page 2, Line 11reduction may increase even if companies do not increase employment in
Page 2, Line 12Colorado because the tax benefit is based on premiums collected, and premiums are rising nationwide.
Page 2, Line 13(2) The general assembly further finds that:
Page 2, Line 14(a) The primary purpose of repealing the reduced insurance
Page 2, Line 15premium tax rate for a company with a home office or regional home
Page 2, Line 16office in Colorado is to better align the state's insurance premium tax
Page 2, Line 17code with the tax codes of other states, so that Colorado is less of an outlier regarding how insurance taxpayers compute their taxes owed; and
Page 2, Line 18(b) Any revenue gain that results from the improved alignment of
Page 2, Line 19the state's insurance premium tax code with the tax codes of other states is:
Page 2, Line 20(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 2, Line 21(II) De minimis.
Page 3, Line 1(3) Therefore, the general assembly declares, consistent with the
Page 3, Line 2Colorado supreme court's holding in TABOR Found. v. Reg'l Transp.
Page 3, Line 3Dist., 2018 CO 29, that legislation causing only an incidental and de
Page 3, Line 4minimis tax revenue increase does not amount to a new tax or a tax policy
Page 3, Line 5change that requires advance voter approval under section 20 of article X
Page 3, Line 6of the Colorado constitution, the removal of the reduced insurance
Page 3, Line 7premium tax rate for a company with a home office or regional home
Page 3, Line 8office in Colorado is neither a new tax nor a tax policy change that requires voter approval.
Page 3, Line 9SECTION 2. In Colorado Revised Statutes, 10-3-209, amend
Page 3, Line 10(1)(b)(I) introductory portion and (1)(b)(I)(B); and add (1)(b)(IV) as follows:
Page 3, Line 1110-3-209. Tax on premiums collected - exemptions - penalties
Page 3, Line 12- filing system - division to contract with third parties - rules - repeal.(1) (b) (I) The rate of tax
shall bePage 3, Line 13(B) For direct written premiums in 2025, for companies
Page 3, Line 14maintaining a home office or a regional home office in this state, the rate of tax on the gross amount
shall bePage 3, Line 15(IV) Subsections (1)(b)(I)(B), (1)(b)(II), (1)(b)(II.5), (1)(b)(II.7),
Page 3, Line 16and (1)(b)(III) of this section and this subsection (1)(b)(IV) are repealed, effective December 31, 2026.
Page 3, Line 17SECTION 3. Safety clause. The general assembly finds,
Page 3, Line 18determines, and declares that this act is necessary for the immediate
Page 3, Line 19preservation of the public peace, health, or safety or for appropriations for
Page 3, Line 20the support and maintenance of the departments of the state and state institutions.