These are all of the taxes and fees bills proposed in the 2019 session. Each bill has its own bill number, please use your browser search feature to find the bill you are interested in. Return to the Colorado home page to pick a different bill category.

None of the text is the opinion of Engage. Each bill's description, arguments for, and arguments against are our best effort at describing what each bill does, arguments for, and arguments against the bill. The long description is hidden by design, you can click on it to expand it if you want to read more detail about the bill. If you believe we are missing something, please contact us with your suggestion. Some of these bills have the notation that they have been sent to the chamber's "kill" committee. This means that the leadership has decided to send the bill to the State committee even though it does not belong there based on its subject matter. This committee, in both chambers, is stacked with members from "safe" districts and the idea is to kill the bill without forcing any less safe members to take a hard vote. It is possible for a bill to survive the kill committee, but it is very rare.

Prime sponsors are given after each bill, with Senate sponsors in () and House sponsors in []. They are color-coded by party.

Some bills will have text highlighted in pink or highlighted in orange. Pink highlights mean House amendments to the original bill; orange mean Senate amendments. The bill will say under the header if it has been amended.

Each bill has been given a "magnitude" category: Major, Medium, Minor, and Technical. This is a combination of the change the bill would create and the "controversy" level of the bill. Some minor bills that are extending current programs would be major changes if they were introducing something new, but the entire goal here is to allow you to better curate your time. Something uncontroversial likely to pass nearly unanimously that continues a past program may not be worth your time (and please remember, you can still read all of the minor bills!). Technical bills are here to round out the list. They are non-substantive changes.

HB19-1097 General Fund Restrictions [Neville]

*Sent to House State Affairs Kill Committee*

KILLED IN HOUSE COMMITTEE

Short Description:

Reduces the individual state and corporate income tax rate from 4.63% to 4.25% and the alternative minimum by the same 0.38%. Requires the state controller to proportionally void general fund appropriations for each principal department, except for education, for the amount of revenue lost, $374.3 million this fiscal year and $760.7 million next fiscal year.

Long Description: n/a

Arguments For:

The state is flush with cash, so much so that we are projecting three straight years of TABOR tax refunds. This is a sign that our taxes are too high and that we should allow taxpayers to keep more of their own money, where they can put it to use bolstering our state economy rather than having the state sit on it for a year only to give some of it back. We can further this effort by tightening some belts in government, which continues to grow every year. Many of these state agencies are never forced to take a truly hard look at their programs and remove waste. The bill of course excluded education, where we still owe the schools money.

Arguments Against:

Another recession is coming. It is inevitable and the only question is when and how hard will it hit. Balancing our state revenues around their peak is a recipe for disaster when we reach a valley. We still haven’t fully recovered from the last recession, as we still owe our schools hundreds of millions of dollars. The state needs to use as much money as it can to get back to even from our last recession and put away some reserves to prepare for the next one. As for the spending cuts, This is merely the “starve the beast” playbook, where instead of making the case for spending less money with specific examples, politicians lower the amount of money in the system, then claim we don’t have enough money to pay for things. Colorado’s economy is booming with our current tax structure. Our unemployment is among the lowest in the country. The state is one of the fastest-growing in the country. We don’t need lower taxes.

Three straight years of TABOR refunds along with hundreds of millions of dollars owed to our schools and billions in transportation needs shortfalls shows that we have a TABOR problem, not a tax problem.

How Should Your Representatives Vote on HB19-1097

HB19-1164 Child Tax Credit (Zenzinger, Priola) [Singer]

AMENDED: Minor

PASSED A HOUSE COMMITTEE

Short Description:

The Colorado version of the federal child tax credit was enacted with a dependency on Congress passing a law to allow the state to collect sales and use taxes from retailers not physically in Colorado. This bill removes that dependency and enacts the tax credit.

Long Description:

The Colorado version of the federal child tax credit was enacted with a dependency on Congress passing a law to allow the state to collect sales and use taxes from retailers not physically in Colorado. This bill removes that dependency and enacts the tax credit as follows: 30% of the federal tax credit for the lowest income bracket (under $25,000 for single filers and $35,000 for joint filers), 15% of the federal credit for the middle bracket ($25,000 to $50,000 for singles and $35,000 to $60,000 for joint), and 5% of the highest bracket ($50,000 to $75,000 for singles and $60,000 to $85,000 for joint).


Arguments For:

The trigger for this bill has been met, just not by a Congressional law. The Supreme Court ruling in Mayfair vs. South Dakota allows states to collect sales and use tax from out-of-state businesses. Unfortunately current law doesn’t recognize the conditions of collecting out-of-state business sales and use tax but the mechanism of a specific law that will never get passed because it is not needed. With the trigger met, the law needs to be changed so the tax credits can go into effect. This is one of the most successful tax credits in federal law, and it is past time to extent to state tax law. It is hard to overstate how expensive raising a child is, and the overall societal benefits to successfully doing so are overwhelming.

Arguments Against:

This is a good time to revisit this entire idea and get rid of it. Adults with children are already given great advantages in federal and state tax codes and we don’t need to be piling on more money to lower income families who have lots of children. Some form of self-discipline and reliance needs to be in play.

How Should Your Representatives Vote on HB19-1164

HB19-1175 Property Tax Valuation Appeal Process (Gonzales) [Gray]

PASSED

Short Description:

Slightly changes date for information provided to an assessor for a commercial property subject to a protest of property tax valuation under alternative county procedures and date for county assessor to mail notice of determination of appeal from last working day in August to August 15. For appeals, clarifies information required of property owner for rentals and information required from assessor on method used to calculate value.

Long Description: n/a

Arguments For:

This gives taxpayers more time to decide if they want to appeal the determination of the assessor. With less time the feeling among counties is that some taxpayers are appealing just to keep their right to do so. This will give taxpayers an extra two weeks for a total of four weeks to make a decision and should lower the number of appeals. It also creates an easier and more efficient appeals process.

Arguments Against:

Four weeks isn't much better than two weeks for busy property owners. We should add even more time into the appeals process.

How Should Your Representatives Vote on HB19-1175

HB19-1240 Sales and Use Tax Administration (Court, Tate) [Kraft-Tharp, Van Winkle]

Goal: To make it easier for retailers to adhere to Colorado’s new destination sourcing rule for sales tax and to exempt smaller businesses that do smaller amounts of business here.

Description:

Exempts businesses that do less than $100,000 in retail sales inside the state from following the destination sourcing tax rules and keeps them on sales tax based on business location. Exempts all businesses from following destination sourcing rules until the state has produced an online tool that provides the sales tax jurisdiction for all addresses in the state. Makes marketplace facilitators liable for sales tax for all sales on their platform and exempts sellers from the responsibility of collecting and distributing sales tax. Facilitators must use their combined sales in the state for the $100,000 threshold.

Additional Information:

Defines marketplace facilitators as an entity or person that contracts with a seller to facilitate the sale of the seller’s tangible personal property, commodities, or services through a marketplace. This can include being a middle man for offers/acceptance between buyer and seller, owning or operating the electronic or physical infrastructure that makes the transaction possible, providing a virtual currency that buyer and seller can use, or developing the software or participating in research activities if these are directly related to the physical or electronic marketplace. The facilitator must also either be a payment processing service or fulfillment/storage service or product listing service or price setting service or order taking service or provide customer service or accept/assist with returns/exchanges or do advertising/promotion or brand sales from the seller as those of the marketplace facilitator. For leases or rental of property, the first payment is treated like a retail sale and subsequent ones are sourced to the property location. For transportation leases (like cars), each periodic payment is sourced to owner’s primary property location. Heavy duty transportation equipment (semis, aircraft operating by airlines, railcars used in interstate commerce), all transactions are treated like a retail sale.


Arguments For:

This fixes several looming problems opened up by the Wayfair v. South Dakota Supreme Court case that allows the state to collect tax from out-of-state retailers and prompted Colorado to move to destination sourcing for sales tax. The first is that out-of-state retailers and in-state retailers should be treated the same when it comes to meeting a minimum threshold. We need a minimum because if we simply force businesses to deal with our complicated sales tax regime as it exists now, for all transactions, some businesses will choose to simply not sell products in our state. So first it makes sense to have a threshold where we start to require the tax, to make it worth these businesses’ time and effort. Without this bill, some companies may simply stop selling to parts of the state, since the license tax fee may exceed potential profits. The second looming problem is the extremely complexity of our state’s sales tax system (one of the most complex in the nation) makes this a difficult maze for even a larger business to navigate. Providing an online tool that instantly gives tax jurisdictions (and not requiring destination sourcing until we have it) will relieve businesses of this burden. Finally, the bill properly puts the onus on the marketplace facilitators (Amazon is the most obvious example) to handle all of the taxes themselves rather the small seller. By forcing the facilitator to combine all of their sales we also avoid them ducking out from the obligations by claiming each small seller on its own doesn’t meet the threshold. The home rule problem cannot be solved by the legislature as the rights of these jurisdictions are in the Constitution.

Arguments Against:

This bill may solve some problems but it completely ducks the biggest one: home rule municipalities. We have over 70 of these right now and they all have their sales tax rules and many of them do not collect through the state. That means a business not only has to buy dozens of sales tax licenses each year, keep track of over a hundred different sales tax rates, they also have to keep track of dozens of different sales tax exemption rules and file with multiple different destinations. Business may decide to skip Colorado entirely rather than deal with all of this mess. We need a single source solution that then distributes the appropriate revenues to the rest of the state jurisdictions. We need a single set of rules that companies can abide by. We need software solutions that not only tell a company what jurisdiction someone is in but also what the exact tax rates are.

This still puts some state businesses at a disadvantage, if they are up against multiple companies who are under the $100,000 threshold but still compete with an in-state business. It’s not always Amazon that is the competitive threat.

No business should have to jump through all of these hoops, calculating all of these different sales tax regimes based on where the customer is located and then having to remit all of these different sales tax payments and forms four times a year, no matter how big it is. This is going to cost these businesses money and they may pass it on to consumers in the form of higher prices. Reverse the decision from last December entirely and go back to how the state has operated for years: taxes based on retailer location.

How Should Your Representatives Vote on HB19-1240

SB19-006 Electronic Sales & Use Tax Simplification System (Williams, A) [Kraft-Tharp, Van Winkle]

AMENDED: Minor

PASSED

Short Description:

Takes the next step forward in developing and implementing an electronic sales and use tax system that businesses can use across state and local taxing areas. A one-stop online shop.

Long Description:

This builds on a bill from the 2018 session that requested information from vendors to build an electronic system that will allow businesses to do all of their state and municipal sales tax reporting in one place at one time. Four companies submitted information, this bill directs the state to ask for proposals and pick one. It also directs the department of revenue to start accepting returns and payments through the system when it comes online. It says that it is the assembly’s intent for at least three local governments that control their own sales and use taxation (“home rule” jurisdictions) to use the system when it comes online and for all home rule jurisdictions to use it within three years.

Arguments For:

Colorado has one of the most complicated sales and use tax setups in the country. In addition to state sales tax, businesses have to worry about a variety of municipal tax jurisdictions: 70 in the state that collect outside of the state’s existing system. This can become so complicated for some businesses that they have to pay an outside firm to do their sales and use tax reporting. This bill takes the next step required to solve this problem. We cannot force home rule jurisdictions to adopt it because of their rights under the Colorado Constitution to self-government in the levy and collection of sales and use taxes. But they will be happy to give up the responsibility and effort required to collect on their own.

Arguments Against:

We have a live example of trying to get home rule jurisdictions to voluntarily adopt statewide standards: the effort that began in 1992 to get all jurisdictions to adopt the same standardized definitions of what is taxable and what is exempt. 45 of the 71 have adopted the definitions. This bill needs to enact these definitions into state law and find other ways to put more teeth into getting municipalities into the one-stop shop system. Otherwise we may face a situation where we spend all this money to build a shiny new toy that doesn’t fix the fundamental problem because ½ the state won’t use it.

Using a uniform system requires uniform definitions and standards. It’s clear that although the state isn’t yet forcing this on any municipalities, it will find a way to do it. The current system is fine, if some businesses have to farm out some tax work four times a year it doesn’t seem to be hurting our economy any.

How Should Your Representatives Vote on SB19-006

SB19-016 Severance Tax Operational Fund Distribution Methodology (Donovan, Coram) [Esgar, Saine]

From the Water Resources Review Committee

PASSED

Short Description:

Changes the way the state disperses severance taxes in its operational fund by increasing the reserve for tier 2 programs (to guard against fluctuations in the account) from 15% to 100% and requiring transfers occur after the fiscal year and based on actual, not estimated, revenues. Currently transfers occur three times a year

Long Description: n/a

Arguments For:

The current way of doing things relies too much on guesswork and is too susceptible to fluctuations. Having a larger reserve, and making sure we actually have the revenue before committing to spend it, will make for a smoother process for all of the accounts affected by this and won’t shortchange anyone. The tier 2 accounts already pull money from the reserve now, the change here simply makes sure there is more money there.

Arguments Against:

Going for three distributions a year to just one makes it more difficult to be flexible and adaptive. Going from 15 to 100% also means we are putting more money toward these programs, millions more. It won’t necessarily be spent, but it will be held in the program and not spent in other places.

How Should Your Representatives Vote on SB19-016

SB19-024 Taxes Paid By Electronic Funds Transfers (Tate) [Arndt, Hooton] TECHNICAL BILL

From the Statutory Revision Committee

PASSED

Short Description:

Authorizes department of revenue to require severance taxes to be remitted electronically and to require an earlier hour deadline for sales tax remittance by electronic funds transfer than by those who use other means.

Long Description: n/a

SB19-029 Income Tax Residency Presumption for Military (Crowder)

AMENDED: Minor

PASSED

Short Description:

Make the law a presumption that if an individual in the armed forces whose home is in Colorado is stationed in another state their state of residence is not Colorado if they provide documentation to that effect.

Currently, an individual in active duty military service whose home is in Colorado but whose state of residence is another state is allowed to reacquire residency and not pay Colorado state income tax on their military income. This bill presumes that if an individual is stationed in another state their state of residence is not Colorado if they provide documentation to that effect. Only a preponderance of evidence that the individual did not intend to change their state of residence can overcome this presumption.

Arguments For:

This simplifies matters for the men and women in our armed forces by giving them an easy method (including just a simple written notification) for changing their state of residence to where they are stationed.

Arguments Against: n/a

How Should Your Representatives Vote on SB19-029

SB19-035 DOR Department of Revenue Enforcement Measures Collection of Tax Owed (Court) [Benavidez]

AMENDED: Technical (requires repassage in Senate)

PASSED

Short Description:

Specifies that the state cannot collect on tax issues while an individual’s assets are in bankruptcy and for six months after. Also clarifies state’s ability to sell a delinquent taxpayer’s motor vehicle and its ability to seize property from delinquent taxpayers.

Specifies that the state’s ability to collect tax, penalty, interest, fine, or other charges is suspended while an individual’s assets are in the control of a bankruptcy court and for six months after. Also clarifies department of revenue’s ability to sell a delinquent taxpayer’s motor vehicle, when property or rights to property must be surrendered and what the penalties are for failing to do so. Also clarifies that a court can order, with probable cause, the seizure of assets for a delinquent taxpayer.


Arguments For:

Whenever we are dealing with taking someone’s personal property for failure to pay taxes, it is good to have clarification. In addition, it just makes sense that if someone has no control over their own assets due to bankruptcy proceedings, we need to wait to try to collect taxes and penalties.

Arguments Against: n/a

How Should Your Representatives Vote on SB19-035

SB19-055 Reduce State Income Tax Rate (Sonnenberg) [Pelton]

KILLED IN SENATE COMMITTEE

Short Description:

Reduces the state income tax rate from 4.63% to 4.49% for both corporate and individual taxes. Reduces the state alternative minimum tax by 0.14%.

Long Description: n/a

Arguments For:

The state is flush with cash, so much so that we are projecting three straight years of TABOR tax refunds. This is a sign that our taxes are too high and that we should allow taxpayers to keep more of their own money, where they can put it to use bolstering our state economy rather than having the state sit on it for a year only to give some of it back.

Arguments Against:

Another recession is coming. It is inevitable and the only question is when and how hard will it hit. Balancing our state revenues around their peak is a recipe for disaster when we reach a valley. We still haven’t fully recovered from the last recession, as we still owe our schools hundreds of millions of dollars. The state needs to use as much money as it can to get back to even from our last recession and put away some reserves to prepare for the next one. Colorado’s economy is booming with our current tax structure. Our unemployment is among the lowest in the country. The state is one of the fastest-growing in the country. We don’t need lower taxes.

Three straight years of TABOR refunds along with hundreds of millions of dollars owed to our schools and billions in transportation needs shortfalls shows that we have a TABOR problem, not a tax problem.

A tax cut done in this matter is highly regressive. Those earning under $100,000 would see less than $100 of tax relief, while those earning over $1,000,000 would get over $1,000. This is unacceptable.

How Should Your Representatives Vote on SB19-055

SB19-130 Sales Tax Administration (Gardner) [Rich, Larson]

KILLED IN SENATE COMMITTEE

Short Description:

Establishes that out-of-state retailers must do a certain amount of business in Colorado to owe sales tax. Tax is based on destination of goods. Requires department of revenue to create single form for returns, provide sales tax database, and free-of-charge software that calculates sales tax at the time of transaction, files returns, and updates itself when any tax changes are made. A portion of the vendor fee (kept by retailers for submitting tax on time) pays for the software. Home rule jurisdictions must opt-in to state rules around sales tax to collect any tax for out-of-state retailers and provide the state with timely updates of its sales tax percentage.

Long Description:

Establishes that out-of-state retailers must do at least $100,000 or 200 or more separate transactions in Colorado to owe sales tax and that only the state sales tax will apply (not local sales taxes) to these businesses. Tax is based on destination of goods. Requires department of revenue to create single form for returns, provide sales tax database that includes local jurisdiction boundaries, and free-of-charge software that calculates sales tax at the time of transaction, files returns, and updates itself when any tax changes are made. A portion of the vendor fee (kept by retailers for submitting tax on time) pays for the software. Out-of-state retailers do not have to use the system. Home rule jurisdictions must opt-in to state rules around sales tax to collect any tax for out-of-state retailers and provide the state with timely updates of its sales tax percentage.


Arguments For:

This is in response to the Wayfair v. South Dakota Supreme Court case last year which opened up the ability for states to collect sales tax from out-of-state retailers. This is a great leveler for Colorado businesses, who don’t have to compete with these retailers who haven’t been charging sales tax and thus are more easily able to undercut our Colorado businesses on price. We must balance this need for fairness, however, with the ability of a business to function in the state. If simply force businesses to deal with our complicated sales tax regime as it exists now, for all transactions, some businesses will choose to simply not sell products in our state. So first it makes sense to have a threshold where we start to require the tax, to make it worth these businesses’ time and effort, and then it makes sense to give them a single source to deal with, not our over 70 different home rule municipalities. So many different sets of rules is just no longer a viable option in 2019. Finally, we cannot expect these businesses to keep track of all of this on their own, we have to provide them with software that does all of the calculations automatically.

Arguments Against:

Despite the attempts at safeguards, this could be problematic for a lot of businesses who don’t have the resources of Amazon or something similar. It’s all well and good to have a software program that does these calculations, but plugging that software into an online point-of-sale system is not simply a matter of snapping your fingers. It will require programming, potentially expensive programming, and any updates or alterations to the software may require additional programming to make it work. We have one of the most complicated sales tax setups in the country, and this just puts a band-aid on that complication and the burden of dealing with it still largely falls on businesses.

Home rule jurisdictions have the right in the state constitution to set their own sales tax regimes. This tramples on that right by forcing the jurisdictions to enter into statewide compliance in order to receive this money and is thus possibly unconstitutional. Even it survived the court challenge, it would force home rule jurisdictions to face sharp declines in revenue (because the state exempts many more products from taxation than most home rule jurisdictions) and be forced to try to get voters to agree to a tax rate increase or cut services to cope.

This still puts some state businesses at a disadvantage, if they are up against multiple companies who are under the $100,000 threshold but still compete with an in-state business. It’s not always Amazon that is the competitive threat.

How Should Your Representatives Vote on SB19-130

SB19-131 Exempt Certain Businesses from Destination Sourcing Rule (Woodward) [Van Winkle, Arndt]

KILLED IN SENATE COMMITTEE

Short Description:

Specifies that the new destination sourcing rule (where sales taxes must be collected based on the destination of delivery of product rather than retailer location) only applies to a retailer in the state that has sold more than $100,000 worth on an annual basis outside its physical location jurisdiction.

Long Description: n/a

Arguments For:

The new system, which was declared in December in response to the Supreme Court Wayfair v South Dakota case that allows for collection of taxation from retailers without a physical presence in the jurisdiction, is a recipe for madness. Each retailer will have to set-up a non-physical location in each jurisdiction where they make deliveries. All across the state. To ask any small business to keep track of all of this is extreme and will greatly damage Colorado businesses. This bill makes sure that only those businesses that are truly capable of handling this complexity will have to worry about it. Without this bill, some companies may simply stop selling to parts of the state, since the license tax fee may exceed potential profits. We also have two sets of rules without this bill: one for out-of-state retailers who have less than $100,000 and one for in-state retailers who have no minimum threshold to reach.

Arguments Against:

The entire point of Wayfair, and collecting sales tax from out-of-jurisdiction retailers is to fix the enormous competitive problem local retailers are facing with online sales from retailers who don’t have to worry about collecting sales tax. This is more than just an Amazon problem, this is about a local small business not having to compete with operations outside their jurisdiction that don’t have to worry about sales tax and so can offer a lower price.

No business should have to jump through all of these hoops, calculating all of these different sales tax regimes based on where the customer is located and then having to remit all of these different sales tax payments and forms four times a year, no matter how big it is. This is going to cost these businesses money and they may pass it on to consumers in the form of higher prices. Reverse the decision from last December entirely and go back to how the state has operated for years.

This bill does not solve the fundamental problems of our sales tax system. We need one bill that takes it all on and fixes it all, not just for those retailers who sell in small amounts to various parts of the state that are not in home rule areas, because what may happen is that things get worse, not better. Home rule areas aren't touched by this bill, so this won't fix that problem for home rules at all. We must solve home rules before we can touch anything else because then we'll have two sets of rules operating in the state.

How Should Your Representatives Vote on SB19-131

SB19-140 Income Gain on Transactions Using Virtual Currency (Tate)

KILLED BY SPONSOR

Goal: To allow people using cryptocurrency as a money substitute to avoid capital gains taxes.

Short Description:

Allows individuals and corporations to take a state income tax deduction of up to $600 per sale or exchange of cryptocurrency.

Additional Information: n/a

Arguments For:

Taxation is a deterrent to establishing cryptocurrency as a real alternative to traditional money because it makes people less likely to use it if they might have to pay capital gains taxes on their transaction. The $600 limit ensures that we are truly catching people who are using this as a money substitute, not speculative investors.

Arguments Against:

Absent a federal tax exemption, which does not currently exist, no one is going to claim a state tax deduction only to have to pay much more in federal tax.

How Should Your Representatives Vote on SB19-140