A Bill for an Act
Page 1, Line 101Concerning the adjustment of certain tax expenditures.
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 adjusts several state tax expenditures as follows:
- Section 2 of the bill increases the amount of a company's total domestic workforce that must be in Colorado for a company to qualify for the insurance premium tax rate tax expenditure for a home office or regional home office;
- Section 3 requires insurance companies, when submitting certain filings with the division of insurance, to submit the total annual dollar amount of premiums collected or contracted for on policies or contracts of insurance covering property or risks in Colorado during the previous calendar year from entities that are exempt from taxation;
- Section 6 limits the existing tax deduction related to expenses, the deduction of which is disallowed by section 280C of the internal revenue code, so that a taxpayer may only claim the tax deduction for income tax years commencing before January 1, 2026;
- Section 10, for income tax years commencing on and after January 1, 2026, creates a new tax deduction related to expenses, the deduction of which is disallowed by section 280C of the internal revenue code, so that a taxpayer may claim the deduction for any expenses that cannot be deducted under section 280C of the internal revenue code;
- Section 7 limits the alternative minimum tax credit to income tax years commencing prior to January 1, 2025;
- Section 8 extends the tax credit for monetary contributions to promote child care, so that the tax credit is available through income tax years commencing before January 1, 2030, rather than January 1, 2028;
- Section 9, for income tax years commencing on and after January 1, 2026, creates an income tax credit for certain individuals who are 65 years of age or older in the income tax year, or who are a surviving spouse of that individual, and who were previously eligible to receive a grant for real property tax assistance and heat or fuel expenses assistance;
- Section 20, beginning January 1, 2026, ends the availability of grants for real property tax assistance and heat or fuel expenses assistance;
- Sections 4, 5, 14, 15, 21, 22, and 23 make conforming amendments for the changes made in sections 9 and 20;
- Section 11 expands the definition of local government to include counties for purposes of the alternative transportation options tax credit;
- Section 12 limits the existing business personal property tax credit so that a taxpayer may only claim the tax deduction for income tax years commencing before January 1, 2026;
- Section 13 modifies the tax credit for qualified costs incurred in preservation of historic structures by removing the 5% increase in the percentage of rehabilitation expenses incurred in a rehabilitation in a disaster area for the rehabilitation of a commercial structure that are applicable for the tax credit;
- Section 16 modifies the downloaded software sales tax exemption so that all software that is available for repeated sale and license and governed by a nonnegotiable license agreement qualifies as tangible property and thus is subject to sales tax;
- Section 17 ensures that, beginning July 1, 2025, interstate telephone and telegraph services are subject to state sales tax;
- Section 18 repeals, effective July 1, 2025, the special fuel excise tax reduction associated with bad debt and the payment of the special fuel excise tax; and
- Section 19 modifies the enterprise zone tax credit for income tax years beginning January 1, 2026, by limiting the total amount of the credit that may be claimed to $2 million, providing an exemption process for that limit, and prohibiting certain taxpayers from claiming that credit.
Page 3, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 3, Line 2SECTION 1. Legislative declaration. (1) The general assembly finds and declares that:
Page 3, Line 3(a) (I) House Bill 24-1314 substantially modified the tax credit for
Page 3, Line 4qualified costs incurred in the preservation of historic structures by,
Page 3, Line 5among other things, expanding the amount of the tax credit available to taxpayers;
Page 3, Line 6(II) As part of modifying the tax expenditure, House Bill 24-1314
Page 3, Line 7also removed the 5% increase in the percentage of rehabilitation expenses
Page 3, Line 8incurred in a disaster area for the rehabilitation of a residential structure,
Page 3, Line 9but not a commercial structure, that are considered in determining the amount of the tax expenditure;
Page 3, Line 10(III) This act further modifies the tax expenditure by removing the
Page 3, Line 115% increase in the percentage of rehabilitation expenses incurred in a
Page 3, Line 12rehabilitation in a disaster area for the rehabilitation of a commercial
Page 3, Line 13structure that are considered in determining the amount of the tax expenditure;
Page 4, Line 1(IV) The primary purpose of the modification of this tax
Page 4, Line 2expenditure is to decrease administrative burden by aligning the treatment
Page 4, Line 3of expenses incurred in rehabilitating residential and commercial historic structures; and
Page 4, Line 4(V) The modification of this tax expenditure will cause only a de
Page 4, Line 5minimis revenue gain that is incidental to the primary purpose of modifying the tax expenditure;
Page 4, Line 6(b) (I) One of the five primary categories of sales that are subject to state sales tax is intrastate telephone and telegraph services;
Page 4, Line 7(II) Interstate telephone and telegraph services are not subject to state sales tax;
Page 4, Line 8(III) Unlike Colorado, twenty-eight states subject interstate
Page 4, Line 9telephone and telegraph services to state sales tax if at least one of the nodes of those services is in the state levying the sales tax;
Page 4, Line 10(IV) Like the state, many home rule municipalities in Colorado
Page 4, Line 11impose sales tax on intrastate telephone and telegraph services, meaning that some telephone and telegraph services are taxed while others are not;
Page 4, Line 12(V) The primary purpose of repealing this tax expenditure is to
Page 4, Line 13further resolve taxpayer confusion and decrease administrative burden by
Page 4, Line 14repealing the sales tax exemption to make it clear that all telephone and telegraph services are subject to sales tax; and
Page 4, Line 15(VI) The repeal of this tax expenditure will cause only a de
Page 4, Line 16minimis revenue gain that is incidental to the primary purpose of repealing the tax expenditure;
Page 4, Line 17(c) (I) The purpose of the business personal property tax income
Page 4, Line 18tax credit is to minimize the negative impact of the business personal property tax on businesses;
Page 5, Line 1(II) As referenced in the office of the state auditor's 2024
Page 5, Line 2evaluation of the business personal property tax income tax credit,
Page 5, Line 3Colorado also exempts businesses with business personal property below
Page 5, Line 4a dollar threshold from filing and paying the tax altogether. That
Page 5, Line 5threshold is currently $52,000. Only twelve other states have some type
Page 5, Line 6of exemption for business personal property. Unlike Colorado, no state
Page 5, Line 7has both an exemption and an income tax credit for business personal property taxes paid.
Page 5, Line 8(III) The office of the state auditor's 2024 evaluation of the
Page 5, Line 9business personal property tax income tax credit indicated that less than
Page 5, Line 101% of business personal property taxpayers in the state claim the income
Page 5, Line 11tax credit and many of those credits were claimed erroneously or were
Page 5, Line 12miscalculated, suggesting that the cost of administering the income tax credit is larger than its benefit to taxpayers;
Page 5, Line 13(IV) Taxpayers can already deduct property taxes as ordinary and
Page 5, Line 14necessary business expenses on their federal income tax returns, which
Page 5, Line 15also reduces their state tax liability, meaning that the business personal property tax income tax credit is partially duplicative; and
Page 5, Line 16(V) Therefore, the purpose of repealing the business personal
Page 5, Line 17property tax income tax credit is to reduce administrative burden and
Page 5, Line 18increase administrative efficiency by removing a duplicative tax
Page 5, Line 19expenditure that is rarely being claimed. The repeal of this tax
Page 5, Line 20expenditure will only cause a de minimis revenue gain that is incidental to the primary purpose of repealing the tax expenditure.
Page 5, Line 21(d) (I) The purpose of the enterprise zone investment tax credit,
Page 5, Line 22which awards a tax credit in proportion to the amount of a taxpayer's
Page 6, Line 1investment within certain areas of Colorado, is to incentivize the
Page 6, Line 2formation of businesses and the creation of jobs within economically distressed parts of Colorado;
Page 6, Line 3(II) As referenced in the office of the state auditor's 2020
Page 6, Line 4evaluation on the enterprise zone investment tax credit, most businesses
Page 6, Line 5that currently claim the enterprise zone investment tax credit are
Page 6, Line 6inherently highly location-dependent and therefore are not as incentivized
Page 6, Line 7or disincentivized by a tax expenditure that rewards investment within certain areas of Colorado;
Page 6, Line 8(III) The purpose of limiting the amount of, and who may qualify
Page 6, Line 9for, the enterprise zone investment tax credit is to narrow the scope of the
Page 6, Line 10tax expenditure so that it will achieve its original purpose of incentivizing
Page 6, Line 11the formation of businesses and the creation of jobs within economically distressed parts of Colorado; and
Page 6, Line 12(IV) The modification of this enterprise zone investment tax credit
Page 6, Line 13will cause only a de minimis revenue gain that is incidental to the primary
Page 6, Line 14purpose of modifying the enterprise zone investment tax credit to better achieve its original purpose; and
Page 6, Line 15(e) Overall, the purpose of all of the modifications to tax
Page 6, Line 16expenditures in this House Bill 25-1296 is to better align the tax
Page 6, Line 17expenditures with the general assembly's intent in enacting these tax
Page 6, Line 18expenditures, to improve administrative efficiency, to reduce
Page 6, Line 19administrative burden, and to conform Colorado's tax code with
Page 6, Line 20provisions commonly used in other states so that Colorado is less of an
Page 6, Line 21outlier around the country in how taxpayers compute their taxes owed.
Page 6, Line 22Any revenue gained through the modifications to tax expenditures in this
Page 6, Line 23House Bill 25-1296, from modifications that narrow or expand tax expenditures, is clearly de minimis and incidental.
Page 7, Line 1(f) Therefore, consistent with the Colorado supreme court's
Page 7, Line 2holding in TABOR Found. v. Reg'l Transp. Dist., 2018 CO 29, that
Page 7, Line 3legislation that causes only an incidental and de minimis tax revenue
Page 7, Line 4increase does not amount to a new tax or a tax policy change that requires
Page 7, Line 5voter approval in advance under section 20 of article V of the state
Page 7, Line 6constitution, the modifications to tax expenditures in this act are neither new taxes nor tax policy changes that require voter approval.
Page 7, Line 7SECTION 2. In Colorado Revised Statutes, 25-1.5-106, amend (16)(a) as follows:
Page 7, Line 825-1.5-106. Medical marijuana program - powers and duties
Page 7, Line 9of state health agency - rules - medical review board - medical
Page 7, Line 10marijuana program cash fund - subaccount - created - "Ethan's
Page 7, Line 11Law" - definitions - repeal. (16) Fees. (a) The state health agency may
Page 7, Line 12collect fees from patients who, pursuant to section 14 of article XVIII of
Page 7, Line 13the state constitution or subsection (9) of this section, apply to the medical
Page 7, Line 14marijuana program for a registry identification card for the purpose of
Page 7, Line 15offsetting the state health agency's direct and indirect costs of
Page 7, Line 16administering the program. The amount of the fees shall be set by rule of
Page 7, Line 17the state health agency. The amount of the fees set pursuant to this section
Page 7, Line 18shall reflect the actual direct and indirect costs of the state licensing
Page 7, Line 19authority in the administration and enforcement of this article so that the
Page 7, Line 20fees avoid exceeding the statutory limit on uncommitted reserves in
Page 7, Line 21administrative agency cash funds as set forth in section 24-75-402 (3).
Page 7, Line 22The state health agency shall not assess a medical marijuana registry
Page 7, Line 23application fee to an applicant who demonstrates, pursuant to a copy of
Page 7, Line 24the applicant's state tax return certified by the department of revenue or
Page 8, Line 1a copy of the applicant's federal tax return received from the
Page 8, Line 2internal revenue service, that the applicant's income does not exceed
Page 8, Line 3one hundred eighty-five percent of the federal poverty line, adjusted for
Page 8, Line 4family size. All fees collected by the state health agency through the
Page 8, Line 5medical marijuana program shall be transferred to the state treasurer who
Page 8, Line 6shall credit the same to the medical marijuana program cash fund, which fund is hereby created.
Page 8, Line 7SECTION 3. In Colorado Revised Statutes, 10-3-209, add (6)(d) as follows:
Page 8, Line 810-3-209. Tax on premiums collected - exemptions - penalties
Page 8, Line 9- filing system - division to contract with third parties - rules - repeal.
Page 8, Line 10(6) (d) In submitting taxes, penalties, fines, fees, and associated
Page 8, Line 11filings required under this section to the division, an insurance
Page 8, Line 12company shall identify the total annual dollar amount of
Page 8, Line 13premiums collected or contracted for on policies or contracts
Page 8, Line 14of insurance covering property or risks in Colorado during the
Page 8, Line 15previous calendar year from entities that are exempt from taxation pursuant to section 10-3-209 (1)(d)(IV).
Page 8, Line 16SECTION 4. In Colorado Revised Statutes, 39-1-104.2, amend (3)(s)(I) introductory portion as follows:
Page 8, Line 1739-1-104.2. Residential real property - valuation for
Page 8, Line 18assessment - legislative declaration - definitions. (3) (s) (I) For
Page 8, Line 19property tax years commencing on or after January 1, 2025, but before
Page 8, Line 20January 1, 2027,
if there are sufficient excess state revenues,Page 8, Line 21for assessment for qualified-senior primary residence real property,
Page 8, Line 22including multi-family qualified-senior primary residence real property,
Page 8, Line 23is:
Page 9, Line 1SECTION 5. In Colorado Revised Statutes, 39-21-113, add (37) as follows:
Page 9, Line 239-21-113. Reports and returns - rule - repeal.
Page 9, Line 3(37) Notwithstanding the provisions of this section, the
Page 9, Line 4executive director may provide to the department of early
Page 9, Line 5childhood such detailed taxpayer information pertinent to a
Page 9, Line 6claim for an income tax credit for an early childhood educator
Page 9, Line 7pursuant to section 39-22-547, and such detailed taxpayer
Page 9, Line 8information pertinent to a claim for an income tax credit for a
Page 9, Line 9care worker pursuant to section 39-22-566. Any information
Page 9, Line 10provided pursuant to this subsection (37) must remain
Page 9, Line 11confidential, and all persons are subject to the limitations
Page 9, Line 12specified in subsection (4) of this section and the penalties specified in subsection (6) of this section.
Page 9, Line 13SECTION 6. In Colorado Revised Statutes, 39-22-104, amend (3)(t); and add (3)(u) as follows:
Page 9, Line 1439-22-104. Income tax imposed on individuals, estates, and
Page 9, Line 15trusts - single rate - report - tax preference performance statement
Page 9, Line 16- legislative declaration - definitions - repeal. (3) There shall be added to the federal taxable income:
Page 9, Line 17(t) For income tax years commencing on or after January 1, 2025,
Page 9, Line 18an amount equal to the amount of employer contribution that an employee
Page 9, Line 19forfeits pursuant to section 39-22-558 (3)(c) and that the taxpayer had
Page 9, Line 20previously subtracted from the taxpayer's federal taxable income pursuant to subsection (4)(bb) of this section; and
Page 9, Line 21(u) The amount of any overtime compensation excluded or
Page 9, Line 22deducted from federal gross income.
Page 10, Line 1SECTION 7. In Colorado Revised Statutes, 39-22-509, amend (2)(d) as follows:
Page 10, Line 239-22-509. Credit against tax - employer expenditures for
Page 10, Line 3alternative transportation options for employees - legislative
Page 10, Line 4declaration - definitions - repeal. (2) As used in this section, unless the context otherwise requires:
Page 10, Line 5(d) "Local government" means any home rule city, town, county or city and county,
ororPage 10, Line 6SECTION 8. In Colorado Revised Statutes, 39-22-514.5, amend (8)(c)(III) introductory portion as follows:
Page 10, Line 739-22-514.5. Tax credit for qualified costs incurred in
Page 10, Line 8preservation of historic structures - commercial historic preservation
Page 10, Line 9tax credit program cash fund - tax preference performance statement
Page 10, Line 10- legislative declaration - short title - definitions. (8) Deadline for
Page 10, Line 11incurring specified amount of estimated costs of rehabilitation - proof
Page 10, Line 12of compliance - audit of cost and expense certification - issuance of
Page 10, Line 13tax credit certificate - commercial structures. (c) Notwithstanding subsection (8)(b) of this section:
Page 10, Line 14(III) For income tax years commencing prior to January 1,
Page 10, Line 152030, and for applications submitted pursuant to subsection (5)
Page 10, Line 16of this section prior to January 1, 2026, with respect to a certified
Page 10, Line 17historic structure that is a qualified commercial structure that is located
Page 10, Line 18in an area that the president of the United States has determined to be a
Page 10, Line 19major disaster area under section 102 (2) of the federal "Robert T.
Page 10, Line 20Stafford Disaster Relief and Emergency Assistance Act", 42 U.S.C. sec.
Page 10, Line 215121 et seq., or that is located in an area that the governor has determined
Page 10, Line 22to be a disaster area under the "Colorado Disaster Emergency Act", part
Page 11, Line 17 of article 33.5 of title 24, the tax credit amounts specified in subsections
Page 11, Line 2(8)(b)(I) and (8)(b)(II) of this section must be increased as follows for an application that is filed within six years after the disaster determination:
Page 11, Line 3SECTION 9. In Colorado Revised Statutes, 39-22-517, amend (1), (2), and (4) as follows:
Page 11, Line 439-22-517. Tax credit for child care center investments -
Page 11, Line 5repeal. (1) With respect to taxable years commencing on or after January
Page 11, Line 61, 1992, and prior to
January 1, 2026Page 11, Line 7to any person operating a child care center licensed pursuant to section
Page 11, Line 826-6-905 or 26.5-5-309, family child care home licensed pursuant to
Page 11, Line 9section 26.5-5-309, or foster care home licensed pursuant to section
Page 11, Line 1026-6-905 a credit against the tax imposed by this article 22 in the amount
Page 11, Line 11of twenty percent of the taxpayer's annual investment in tangible personal
Page 11, Line 12property to be used in such child care center, family child care home, or foster care home.
Page 11, Line 13(2) With respect to taxable years commencing on or after July 1,
Page 11, Line 141992, and prior to
January 1, 2026Page 11, Line 15any sole proprietorship, partnership, limited liability corporation,
Page 11, Line 16subchapter S corporation, or regular corporation that provides child care
Page 11, Line 17facilities that are incidental to their business and are licensed pursuant to
Page 11, Line 18section 26-6-905 or 26.5-5-309 for the use of its employees a credit
Page 11, Line 19against the tax imposed by this article 22 in the amount of ten percent of
Page 11, Line 20the taxpayer's annual investment in tangible personal property to be used in such child care facilities.
Page 11, Line 21(4) This section is repealed, effective
December 31, 2033Page 11, Line 22SECTION 10. In Colorado Revised Statutes, 39-22-537.5, amend (3)(a); and add (5) as follows:
Page 12, Line 139-22-537.5. Credit for personal property taxes paid -
Page 12, Line 2legislative declaration - definitions - repeal. (3) (a) For income tax
Page 12, Line 3years commencing on or after January 1, 2019, but before January 1,
Page 12, Line 42026, a taxpayer is allowed a credit against the tax imposed by this article
Page 12, Line 522 equal to the property tax paid in Colorado during the income tax year
Page 12, Line 6on up to eighteen thousand dollars of the total actual value of the taxpayer's personal property.
Page 12, Line 7(5) This section is repealed, effective December 31, 2036.
Page 12, Line 8SECTION 11. In Colorado Revised Statutes, 39-22-544, amend (4)(c) as follows:
Page 12, Line 939-22-544. Credit against tax - qualifying seniors - creation -
Page 12, Line 10legislative declaration - definitions - repeal. (4) (c) (I) For the income
Page 12, Line 11tax year commencing on January 1, 2022, notwithstanding subsections
Page 12, Line 12(4)(a) and (4)(b) of this section, a taxpayer who also qualifies for a grant
Page 12, Line 13under article 31 of this title 39 during calendar year 2022 is eligible to
Page 12, Line 14receive the full credit without an income-based reduction that otherwise applies for the taxpayer under subsection (4)(a) or (4)(b) of this section.
Page 12, Line 15(II) This subsection (4)(c) is repealed, effective December 31, 2026.
Page 12, Line 16SECTION 12. In Colorado Revised Statutes, 39-22-566, amend (2)(j), (2)(k), and (2)(l) as follows:
Page 12, Line 1739-22-566. Qualified care worker tax credit - tax preference
Page 12, Line 18performance statement - legislative declaration - definitions - repeal.(2) As used in this section, unless the context otherwise requires:
Page 12, Line 19(j) "Informal family friend or neighbor child care worker" means
Page 12, Line 20an individual described in section 26.5-5-304 (1)(f) who provides care for
Page 13, Line 1children other than their own who are five years of age or younger,
Page 13, Line 2except that an informal family friend or neighbor child care
Page 13, Line 3worker is not required to provide care in the individual's permanent place of residence.
Page 13, Line 4(k) "Licensed early childhood education program" means an early
Page 13, Line 5childhood education program, as defined in section 26.5-2-202 (3), that
Page 13, Line 6held a valid license issued pursuant to part 3 of article 5 of title 26.5,
for at least six monthsPage 13, Line 7(l) "Licensed family child care home" means a family child care
Page 13, Line 8home, as defined in section 26.5-5-303 (7), that held a valid license issued
Page 13, Line 9pursuant to part 3 of article 5 of title 26.5,
for at least six monthsPage 13, Line 10SECTION 13. In Colorado Revised Statutes, 39-22-604, amend
Page 13, Line 11(3)(a), (3)(b), (4)(b), (5), (6)(a), (8), (10), (13), (16)(a), (16)(b)(I), and (20) as follows:
Page 13, Line 1239-22-604. Withholding tax - requirement to withhold - tax
Page 13, Line 13lien - exemption from lien - annual statement - notice - definitions -
Page 13, Line 14repeal. (3) (a) (I) Every employer making payment of wages shall deduct
Page 13, Line 15and withhold from wages an amount measured by a percentage or
Page 13, Line 16percentages of the total amount required to be deducted and withheld by
Page 13, Line 17an employer from wages of an employee for federal income tax purposes,
Page 13, Line 18or measured by withholding tax tables promulgated by the executive
Page 13, Line 19director, or by such other methods as the executive director may prescribe
Page 13, Line 20if such percentage, percentages, tables, or other methods result in the
Page 13, Line 21withholding from the employee's wages during each pay period an
Page 13, Line 22amount which shall approximate as nearly as possible the income tax due
Page 13, Line 23to the state of Colorado by such employee.
Page 14, Line 1(II) In addition to the amount required to be deducted and
Page 14, Line 2withheld pursuant to subsection (3)(a)(I) of this section, the
Page 14, Line 3executive director may require every employer making payment
Page 14, Line 4of compensation other than wages to deduct and withhold an
Page 14, Line 5amount measured by a percentage or percentages, or measured
Page 14, Line 6by withholding tax tables established by the executive
Page 14, Line 7director, or by such other methods as the executive director
Page 14, Line 8may prescribe if such percentage, percentages, tables, or other
Page 14, Line 9methods result in the withholding from the other compensation
Page 14, Line 10paid to an employee during each pay period an amount which
Page 14, Line 11shall approximate as nearly as possible the income tax due to
Page 14, Line 12the state of Colorado by such employee on such other compensation.
Page 14, Line 13(b) The executive director may, upon written application
havingPage 14, Line 14
been made to him,Page 14, Line 15provided in
paragraph (a) of this subsection (3)Page 14, Line 16section to authorize a withholding based upon a percentage fixed by the
Page 14, Line 17executive director of the adjusted gross income, which percentage shall
Page 14, Line 18approximate as nearly as possible the amount of income tax due to the
Page 14, Line 19state of Colorado and as nearly as possible the
amount soPage 14, Line 20required to be deducted and withheld in
paragraph (a) of this subsection (3)Page 14, Line 21(4) (b) Where practicable, the rules and regulations
Page 14, Line 22promulgated pursuant to this section shall not prescribe
filing orPage 14, Line 23information report, filing, payment, or withholding requirements
Page 14, Line 24which are more frequent or more stringent than corresponding federal
Page 14, Line 25requirements; except the executive director may prescribe
Page 15, Line 1additional or different requirements when necessary for the
Page 15, Line 2efficient administration of differences between the internal revenue code and this article 22.
Page 15, Line 3(5) All amounts deducted and withheld shall be considered as tax
Page 15, Line 4collected under the provisions of this section and no employee shall have
Page 15, Line 5any right of action against
hismoneys soPage 15, Line 6amount deducted and withheld from
hisPage 15, Line 7other compensation and paid over to the department in compliance or in intended compliance with this section.
Page 15, Line 8(6) (a) Every employer shall, in accordance with such rules as
Page 15, Line 9shall be prescribed by the department of revenue, provide each employee
Page 15, Line 10with a statement of the amounts
of moneysPage 15, Line 11such employee's wages and other compensation in accordance with
Page 15, Line 12the provisions of this section. Every employer shall also make an annual
Page 15, Line 13statement for each employee to the department of revenue, on such forms
Page 15, Line 14as are provided or approved by the department, a copy of which shall be
Page 15, Line 15provided each employee, summarizing the total compensation paid and
Page 15, Line 16the tax withheld for such employee during the preceding calendar year or
Page 15, Line 17any portion thereof, and the said annual statement shall be filed on or
Page 15, Line 18before the date established pursuant to section 6071 of the internal
Page 15, Line 19revenue code for filing similar federal statements. Failure to file the
Page 15, Line 20statements within the time prescribed therefor, unless shown to have been
Page 15, Line 21due to reasonable cause, or the willful filing or furnishing of false or
Page 15, Line 22fraudulent statements shall subject the employer to a penalty, at the
Page 15, Line 23discretion of the executive director, of not less than five dollars nor more
Page 15, Line 24than fifty dollars, which shall be in addition to any criminal penalty
Page 15, Line 25otherwise provided for failure to file a return or for filing a false or fraudulent return.
Page 16, Line 1(8) The entire amount of income from wages and other
Page 16, Line 2compensation upon which tax was deducted and withheld shall be
Page 16, Line 3included in the gross income of the income tax return required to be made
Page 16, Line 4by the employee, the recipient of the wages and other compensation,
Page 16, Line 5without exclusion of such amounts deducted and withheld under this
Page 16, Line 6section, and any tax so deducted and withheld shall be credited against the
Page 16, Line 7total income tax, as computed in the employee's return, made in accordance with the provisions of this section.
Page 16, Line 8(10) In the event the excess tax deducted and withheld is one
Page 16, Line 9dollar or less, no refund shall be made, unless a specific claim for refund
Page 16, Line 10is filed by the taxpayer at the time the return is filed. The excess, subject
Page 16, Line 11to being refunded, shall in no event and under no condition be allowed as
Page 16, Line 12a credit against any tax accruing on a return filed for a year subsequent to
Page 16, Line 13the year during which the wages or other compensation were received,
Page 16, Line 14and can only be credited against a tax accruing upon a return of wages or
Page 16, Line 15other compensation from which such excess was deducted and withheld.
Page 16, Line 16(13) The department is empowered to make rules and regulations
Page 16, Line 17for the enforcement of the provisions of this section, including rules and
Page 16, Line 18regulations for determining the amount, up to but not exceeding the
Page 16, Line 19amount limited in this section, to be deducted and withheld by employers
Page 16, Line 20from wages
ofPage 16, Line 21employees, only a part of whose wages or other compensation are paid for services performed within the state of Colorado.
Page 16, Line 22(16) (a) On or before the date of the commencement of
Page 16, Line 23employment with an employer, the employee shall furnish the employer
Page 17, Line 1with a signed withholding certificate. Except as provided by rules
Page 17, Line 2established by the executive director pursuant to this section,
Page 17, Line 3a comparable withholding certificate filed pursuant to the internal revenue
Page 17, Line 4code shall be deemed to satisfy the filing requirement under this
Page 17, Line 5subsection (16). Where necessary to cause the proper amount to be
Page 17, Line 6withheld, the executive director may adjust the employee's withholding
Page 17, Line 7to the amount properly allowable under the internal revenue code or this section.
Page 17, Line 8(b) (I) To enforce the provisions of this section, the executive
Page 17, Line 9director may file with the employer a withholding certificate on behalf of
Page 17, Line 10the employee. Prior to the filing of such certificate, the executive director
Page 17, Line 11shall first notify the employee that the certificate previously filed by the
Page 17, Line 12employee is being examined and that the employee may submit
Page 17, Line 13satisfactory evidence
pursuant to the internal revenue codePage 17, Line 14days of receipt of said notice as to the correct number of withholding
Page 17, Line 15exemptions and allowances. Should the executive director, after
Page 17, Line 16reviewing any evidence so submitted, find the certificate filed by the
Page 17, Line 17employee to be defective, the employer shall accept the certificate filed
Page 17, Line 18by the director in lieu of any certificate previously filed by the employee,
Page 17, Line 19and such certificate filed by the executive director shall thereafter form
Page 17, Line 20the basis for withholding from wages and other compensation as
Page 17, Line 21required by this section. The executive director may also require from the employer a copy of any withholding certificate signed by the employee.
Page 17, Line 22(20) No amount is required to be deducted and withheld from an
Page 17, Line 23employee's wages or other compensation pursuant to this section for
Page 17, Line 24income tax due to the state if the employee's withholding certificate
Page 17, Line 25indicates that the compensation is eligible to be subtracted from federal taxable income pursuant to section 39-22-104 (4)(u).
Page 18, Line 1SECTION 14. In Colorado Revised Statutes, 39-26-102, amend (19)(g) as follows:
Page 18, Line 239-26-102. Definitions - repeal. As used in this article 26, unless the context otherwise requires:
Page 18, Line 3(19) (g) (I) (A) For purposes of this subsection (19), before July
Page 18, Line 41, 2025, "agricultural commodities" does not include products regulated under article 10 of title 44.
Page 18, Line 5(B) This subsection (19)(g)(I) is repealed, effective July 1, 2026.
Page 18, Line 6(II) For purposes of this subsection (19), on or afer July1,
Page 18, Line 72025, "agricultural commodities" includes products regulated under article 10 of title 44.
Page 18, Line 8SECTION 15. In Colorado Revised Statutes, 39-26-104, add (1)(c.5) as follows:
Page 18, Line 939-26-104. Property and services taxed - definitions. (1) There
Page 18, Line 10is levied and there shall be collected and paid a tax in the amount stated in section 39-26-106 as follows:
Page 18, Line 11(c.5) (I) Beginning July 1, 2025, upon telephone and
Page 18, Line 12telegraph services, whether furnished by public or private
Page 18, Line 13corporations or enterprises for interstate telephone and
Page 18, Line 14telegraph service, if the telephone and telegraph service
Page 18, Line 15originates or terminates in the state and is charged to a Colorado address.
Page 18, Line 16(II) In accordance with the federal "Mobile
Page 18, Line 17Telecommunications Sourcing Act", 4 U.S.C. secs. 116 to 126, as
Page 18, Line 18amended, mobile telecommunication service provided to a
Page 19, Line 1customer whose place of primary use is outside of the borders of
Page 19, Line 2the state of Colorado is exempt from the tax imposed by this section.
Page 19, Line 3(III) A taxpayer who pays a tax legally imposed by
Page 19, Line 4another state on a telephone or telegraph service that is
Page 19, Line 5taxable pursuant to this subsection (1)(c.5) is allowed a credit
Page 19, Line 6against the tax imposed by this section in an amount equal to the
Page 19, Line 7amount of the tax imposed on a telephone or telegraph service
Page 19, Line 8by the other state. A credit allowed pursuant to this subsection
Page 19, Line 9(1)(c.5)(III) shall not exceed the tax imposed on a telephone or telegraph service pursuant to this section.
Page 19, Line 10SECTION 16. In Colorado Revised Statutes, amend 39-26-726 as follows:
Page 19, Line 1139-26-726. Medical marijuana - debilitating conditions and
Page 19, Line 12ability to purchase. (1) All sales of medical marijuana to a patient who
Page 19, Line 13is determined to be indigent for purposes of waiving the fee required by
Page 19, Line 14section 25-1.5-106
C.R.S., shall bePage 19, Line 151 of this
articlePage 19, Line 16state health agency shall mark
his or herPage 19, Line 17identification card as such and the patient shall present the card to the licensed medical marijuana center to receive the tax exemption.
Page 19, Line 18(2) On or after July 1, 2025, all sales of medical marijuana
Page 19, Line 19to an individual who presents a valid electronic benefits
Page 19, Line 20transfer card or other form of identification used to receive
Page 19, Line 21state or federal benefits at the time of sale to a licensed
Page 19, Line 22medical marijuana center are exempt from taxation under part
Page 19, Line 231 of this article 26.
Page 20, Line 1SECTION 17. In Colorado Revised Statutes, 39-30-104, amend
Page 20, Line 2(1)(a), (2)(c)(I) introductory portion, (2)(c)(I)(B), (2)(c)(III), and
Page 20, Line 3(2)(c)(IV); repeal (2)(b); and repeal and reenact, with amendments, (2.5) as follows:
Page 20, Line 439-30-104. Credit against tax - investment in certain property
Page 20, Line 5- definitions. (1) (a) (I) There
shall bePage 20, Line 6credit against the tax imposed by article 22 of this title 39, for income tax
Page 20, Line 7years commencing on or after January 1, 1986, an amount equal to the
Page 20, Line 8total of three percent of the total qualified investment, as determined
Page 20, Line 9under section 46 (c)(2) of the federal "Internal Revenue Code of 1986",
Page 20, Line 10as amended, in such taxable year in qualified property as defined in
Page 20, Line 11section 48 of the internal revenue code to the extent that such investment
Page 20, Line 12is in property that is used solely and exclusively in an enterprise zone for
Page 20, Line 13at least one year. The references in this subsection (1) to sections 46
Page 20, Line 14(c)(2) and 48 of the internal revenue code mean sections 46 (c)(2) and 48
Page 20, Line 15of the internal revenue code as they existed immediately prior to the enactment of the federal "Revenue Reconciliation Act of 1990".
Page 20, Line 16(II) (A) Notwithstanding subsection (1)(a)(I) of this
Page 20, Line 17section, for credits allowed beginning in income tax years
Page 20, Line 18commencing on or after January 1, 2026, a taxpayer is not
Page 20, Line 19allowed a total credit amount against the tax imposed by
Page 20, Line 20article 22 of this title 39 pursuant to subsection (1)(a)(I) of this
Page 20, Line 21section in excess of two million dollars and a taxpayer may not
Page 20, Line 22claim a credit pursuant to this subsection (1)(a) if the qualified
Page 20, Line 23property is directly used in: the retail sale of gasoline or diesel
Page 20, Line 24fuel for use in motor vehicles or a wireless telecommunications
Page 20, Line 25facility.
Page 21, Line 1(B) A taxpayer may seek a waiver of the limitation on the
Page 21, Line 2amount of credit established in subsection (1)(a)(II)(A) of this
Page 21, Line 3section by completing a written application to the Colorado
Page 21, Line 4economic development commission for permission to be allowed
Page 21, Line 5a credit in excess of that limitation for the income tax year in
Page 21, Line 6which the total qualified investment is made. The application
Page 21, Line 7must include identification of the substantial positive impact
Page 21, Line 8that the waiver of the limitation would have on investments and
Page 21, Line 9on well-paying jobs in the enterprise zone, documentation that
Page 21, Line 10demonstrates that without the waiver of the limitation the
Page 21, Line 11substantial positive impact on investments and on well-paying
Page 21, Line 12jobs in the enterprise zone is not likely to occur, and
Page 21, Line 13information that the waiver of the limitation is a substantial
Page 21, Line 14factor in the taxpayer's decision to make a qualified investment
Page 21, Line 15in the start-up, retention, expansion, or relocation of the
Page 21, Line 16taxpayer's business, such that without the waiver the taxpayer
Page 21, Line 17is not likely to make the qualified investment. In deciding
Page 21, Line 18whether to grant the waiver of the limitation, the commission
Page 21, Line 19must consider the overall economic health of this state and the
Page 21, Line 20economic viability of the arguments made by the taxpayer in
Page 21, Line 21support of the taxpayer's application. The Colorado economic
Page 21, Line 22development commission may require the taxpayer to provide an
Page 21, Line 23independent analysis, at the taxpayer's expense, that
Page 21, Line 24substantiates the taxpayer's arguments in support of the
Page 21, Line 25application. The taxpayer's application must be considered at a
Page 21, Line 26regularly scheduled meeting of the Colorado economic
Page 21, Line 27development commission at which the public is allowed to comment.
Page 22, Line 1(C) The Colorado economic development commission may
Page 22, Line 2allow all, part, or none of a taxpayer's application to waive the
Page 22, Line 3limitation on the amount of credit established in subsection
Page 22, Line 4(1)(a)(II)(A) of this section. The Colorado economic development
Page 22, Line 5commission must issue a credit certificate that sets forth the
Page 22, Line 6amount of the credit that the taxpayer is allowed for the
Page 22, Line 7income tax year in which the total qualified investment is made.
Page 22, Line 8The taxpayer shall submit the credit certificate to the
Page 22, Line 9department of revenue with the taxpayer's income tax return
Page 22, Line 10for the tax year for which the Colorado economic development commission issued the credit certificate.
Page 22, Line 11(D) If the Colorado economic development commission
Page 22, Line 12approves, in whole or in part, a taxpayer's application to waive
Page 22, Line 13the limitation on the amount of credit established in subsection
Page 22, Line 14(1)(a)(II)(A) of this section, the Colorado economic development
Page 22, Line 15commission shall include its decision in the enterprise zone
Page 22, Line 16annual report to the general assembly, including the taxpayer's
Page 22, Line 17name, the amount of the credit that the commission allowed,
Page 22, Line 18and the Colorado economic development commission's justification for approving the application.
Page 22, Line 19(E) For purposes of this subsection (1)(a), "wireless
Page 22, Line 20telecommunications facility" or "facility" means equipment at
Page 22, Line 21a fixed location that enables wireless communications between
Page 22, Line 22user equipment and a communications network, including macro
Page 22, Line 23and small wireless facilities, transceivers, antennas, backup
Page 22, Line 24power supplies, and comparable equipment, regardless of
Page 23, Line 1technological configuration; and the support structure or
Page 23, Line 2improvements on, under, or within which the equipment is collocated.
Page 23, Line 3(2) (b)
In addition to the limitations set forth in paragraph (a) ofPage 23, Line 4
this subsection (2), for income tax years commencing on or after JanuaryPage 23, Line 5
1, 2011, but prior to January 1, 2014, any taxpayer that is eligible to claimPage 23, Line 6
a credit pursuant to subsection (1) of this section in excess of fivePage 23, Line 7
hundred thousand dollars shall defer claiming any amount of the creditPage 23, Line 8
allowed pursuant to this section that exceeds five hundred thousandPage 23, Line 9
dollars until an income tax year commencing on or after January 1, 2014.Page 23, Line 10
The five hundred thousand dollar limitation specified in this paragraphPage 23, Line 11
(b) shall apply to any credit allowed in the income tax years commencingPage 23, Line 12
on or after January 1, 2011, but prior to January 1, 2014, including any amount carried forward from a prior year.Page 23, Line 13(c) (I) For income tax years commencing on or after January 1,
Page 23, Line 142014, except as provided in
sectionPage 23, Line 15and subsection (2)(c)(II) of this section, the amount that may be claimed
Page 23, Line 16by a taxpayer for an income tax year and that is not applied or refunded under section 24-46-108 is limited to the lesser of:
Page 23, Line 17(B) Seven hundred fifty thousand dollars plus any investment tax
Page 23, Line 18credit carryovers previously allowed in subsection (2.5) of this section
Page 23, Line 19for investments made in income tax years commencing before January 1, 2014.
Page 23, Line 20(III) (A) Except as otherwise provided in sections 24-46-104.3
,Page 23, Line 21
24-46-107,Page 23, Line 22any excess credit allowed pursuant to this subsection (2)(c) shall be an
Page 23, Line 23investment tax credit carryover to each of the fourteen income tax years following the unused credit year.
Page 24, Line 1(B) Except as otherwise provided in
sectionsPage 24, Line 224-46-104.3,
and 24-46-107,Page 24, Line 3subsection (2)(c) for a renewable energy investment made in an income
Page 24, Line 4tax year commencing before January 1, 2018, shall be an investment tax
Page 24, Line 5credit carryover for twenty-two income tax years following the year the credit was originally allowed.
Page 24, Line 6(IV) The limitation contained in this
paragraph (c)Page 24, Line 7(2)(c) on the amount a taxpayer may claim for the income tax year in
Page 24, Line 8which the total qualified investment is made does not limit the total
Page 24, Line 9amount of the credit allowed under
subsection(1)Page 24, Line 10this section, nor does it limit the ability of a taxpayer to
carryoverPage 24, Line 11over a credit to subsequent tax years as allowed in
subparagraph (III) ofPage 24, Line 12
this paragraph (c)Page 24, Line 13allowed in subsection (2.5) of this section for investments made in income tax years commencing before January 1, 2014.
Page 24, Line 14(2.5) (a) (I) Notwithstanding section 39-22-507.5 (7)(b), except
Page 24, Line 15as provided in
sectionsand 24-46-108,Page 24, Line 16otherwise provided in subsections (2.5)(a)(II) and (2.5)(b) of this section,
Page 24, Line 17any excess credit allowed pursuant to this section
and not applied orPage 24, Line 18
refunded under section 24-46-108Page 24, Line 19income tax year commencing before January 1, 2014, shall be an
Page 24, Line 20investment tax credit carryover to each of the twelve income tax years following the unused credit year.
Page 24, Line 21(II) Except as provided in section 24-46-107, any excess credit
Page 24, Line 22claimed pursuant to this section for a renewable energy investment made
Page 24, Line 23in an income tax year commencing before
January 1, 2018, shall bePage 25, Line 1January 1, 2014, is an investment tax credit carryover for twenty income tax years following the year the credit was originally allowed.
Page 25, Line 2(b) (I) For income tax years commencing on or after
Page 25, Line 3January 1, 2011, but prior to January 1, 2014, any taxpayer that
Page 25, Line 4is eligible to claim a credit pursuant to subsection (1) of this
Page 25, Line 5section in excess of five hundred thousand dollars shall defer
Page 25, Line 6claiming any amount of the credit allowed pursuant to this
Page 25, Line 7section that exceeds five hundred thousand dollars until an
Page 25, Line 8income tax year commencing on or after January 1, 2014. The five
Page 25, Line 9hundred thousand dollar limitation specified in this subsection
Page 25, Line 10(2.5)(b) applies to any credit allowed in the income tax years
Page 25, Line 11commencing on or after January 1, 2011, but prior to January 1, 2014, including any amount carried forward from a prior year.
Page 25, Line 12(II) Except as provided in section 24-46-107 and subsection
Page 25, Line 13(2.5)(b)(III) of this section, a taxpayer that deferred claiming
Page 25, Line 14any credit in excess of five hundred thousand dollars during an
Page 25, Line 15income tax year commencing on or after January 1, 2011, but
Page 25, Line 16prior to January 1, 2014, pursuant to subsection (2.5)(b)(I) of this
Page 25, Line 17section shall be allowed to claim the deferred credit as an
Page 25, Line 18investment tax credit carryover for twelve income tax years
Page 25, Line 19following the year the credit was originally allowed plus one
Page 25, Line 20additional income tax year for each income tax year that the
Page 25, Line 21credit was deferred pursuant to subsection (2.5)(b)(I) of this section.
Page 25, Line 22(III) Except as provided in section 24-46-107, a taxpayer is
Page 25, Line 23allowed to claim the deferred credit described in subsection
Page 25, Line 24(2.5)(b)(II) of this section for a renewable energy investment
Page 26, Line 1made in an income tax year commencing before January 1, 2014,
Page 26, Line 2as an investment tax credit carryover for twenty income tax
Page 26, Line 3years following the year the credit was originally allowed plus
Page 26, Line 4one additional income tax year for each income tax year that
Page 26, Line 5the credit was deferred pursuant to subsection (2.5)(b)(I) of this section.
Page 26, Line 6(c) This subsection (2.5) is repealed, effective January 1, 2040.
Page 26, Line 7SECTION 18. Effective date - applicability. This act takes effect upon passage; except that section6takes effect January 1, 2026.
Page 26, Line 8SECTION 19. Safety clause. The general assembly finds,
Page 26, Line 9determines, and declares that this act is necessary for the immediate
Page 26, Line 10preservation of the public peace, health, or safety or for appropriations for
Page 26, Line 11the support and maintenance of the departments of the state and state institutions.