These are all of the taxes and fees bills proposed in the 2020 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 or highlighted in yellow. Pink highlights mean House amendments to the original bill; orange mean Senate amendments; yellow highlights mean conference committee amendments. The bill will say under the header if it has been amended.

Each bill has been given a "magnitude" category: Mega, Major, Medium, Minor+, 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.

House

Click on the House bill title to jump to its section:

MEGA

HB20-1203 EITC Earned Income Tax Credit And Child Tax Credit And Income Definition KILLED ON HOUSE CALENDAR
HB20-1420 Adjust Tax Expenditures For State Education Fund PASSED VERY SIGNIFICANTLY AMENDED

MAJOR

MEDIUM

HB20-1020 Long-term Lodging Sales Tax Exemption SIGNED INTO LAW AMENDED
HB20-1025 Sales Tax Exemption Industrial And Manufacturing Energy Use KILLED BY BILL SPONSORS
HB20-1112 Expand Child Care Contribution Income Tax Credit KILLED ON HOUSE CALENDAR

MINOR+

HB20-1306 Excise Tax Credit Unsalable Alcohol Beverages KILLED BY BILL SPONSORS
HB20-1342 Property Tax Valuation Appeals KILLED BY BILL SPONSORS

MINOR

HB20-1022 Sales And Use Tax Simplification Task Force PASSED AMENDED
HB20-1023 State Address Data For Sales And Use Tax Collection SIGNED INTO LAW AMENDED
HB20-1024 Net Operating Loss Deduction Modifications PASSED AMENDED
HB20-1083 Nursing Home Definition For Residential Property Tax KILLED BY BILL SPONSORS
HB20-1194 Extend Red Cross Tax Check-off KILLED BY BILL SPONSORS
HB20-1303 Excise Tax On Alcohol Beverages Sacramental Wines KILLED BY BILL SPONSORS
HB20-1322 Public Participation Property Tax Manuals KILLED ON HOUSE CALENDAR
HB20-1421 Delinquent Interest Payments Property Tax PASSED AMENDED

TECHNICAL

HB20-1166 Amendments Due To Automatic Repeal of Tax Credit SIGNED INTO LAW
HB20-1174 Sales Tax Statute Modifications To Address Defect SIGNED INTO LAW
HB20-1175 Modify Certain Tax Statutes To Address Defects SIGNED INTO LAW
HB20-1176 Income Tax Statute Modification To Address Defects SIGNED INTO LAW
HB20-1177 Enterprise Zone Statute Fixes Of Defects PASSED
HB20-1181 Nonprofit Transit Authority Agency Fuel Tax SIGNED INTO LAW
HB20-1182 Residents Of Bordering States Sales Tax Exemption SIGNED INTO LAW
HB20-1202 Previous Taxed Income Gain Deduction C Corporation KILLED BY BILL SPONSORS
HB20-1205 Pre-1987 Net Operating Loss Deduction SIGNED INTO LAW
HB20-1304 Clarify Occasional Alcohol Beverage Sale Exemption KILLED BY BILL SPONSORS

HB20-1020 Long-term Lodging Sales Tax Exemption (Moreno (D)) [Snyder (D), Benavidez (D)]

AMENDED: Minor

SIGNED INTO LAW

Appropriation: None
Fiscal Impact: Difficult to estimate, but guess is at least $7.4 million a year

Goal: Require a natural person as the occupant in order to obtain the long-term lodger sales tax exemption for stays of 30 days or more.

Description:

Changes the requirements for the long-term lodger sales tax exemption from occupants to a natural person. This eliminates corporations and chained-stays: it must be one person staying for more than 29 days. Also extends the exemption to local governments unless they explicitly subject 30 plus day stays to sales tax.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

The original intent of this tax exemption was to treat individuals who cannot rent or own a property and thus need to stay for longer than 30 days in these sorts of lodgings the same as renters, who are not subject to sales tax. But it was being used by corporations for multiple different individuals to stay in the same lodging for more than 30 days. This fixes the exemption back to its original intent by requiring a living person but keeps the exemption which can provide an alternative to housing, particularly with our affordable housing crisis.

Arguments Against:

The department of revenue does not study this exemption at all and many motels and hotels aren’t abiding by the law around this exemption which requires a signed agreement for a minimum 30 day stay. We are really flying blind in terms of how much use is corporate, how much motels and hotels are complying with legal requirements (and what shenanigans, if any, they are constructing around the 30 day mark, such as only renting rooms for 29 days maximum), and therefore just how much money this will bring into the state. The status quo is doing fine for just about everyone and the state certainly doesn’t need the extra money.

How Should Your Representatives Vote on HB20-1020

HB20-1022 Sales And Use Tax Simplification Task Force (Williams (D), Tate (R)) [Kraft-Tharp (D), Van Winkle (R)]

From the Sales and Use Tax Simplification Task Force

AMENDED: Minor

PASSED

Appropriation: $34,836
Fiscal Impact: Negligible

Goal: Extend the sales and use tax simplification task force, refocus its mission on new tasks, and remove it from the sunset review process.

Description:

Extends the sales and use tax simplification task force for five more years. Adds more simplification and uniformity tasks for it to examine, as well as monitor the progress of recent legislation designed to make it easier to submit sales and use taxes while allowing for destination-based taxation, and removes the task force from sunset review.

Additional Information:

Specific areas the task force should consider are:

  • Making retail audits more uniform
  • Using a single form for state and local tax returns
  • Streamlining requirements for licenses
  • Making uniform the filing thresholds among various state entities
  • Simplifying use taxes
  • Simplifying how motor vehicle sales and use taxes are collected
  • Simplifying issuance of building permits and use taxes on building materials and equipment
  • Simplifying process to claim and administer various exemptions
  • Simplifying requirements for non-profits

Task force also shall get regular updates on progress of recently passed electronic sales and use tax system and encourage participation once it is online, as well as the purchase and development of a geographic information database to maintain jurisdictional boundaries and calculate appropriate tax rates. Also must:

  • Review how special district taxes add to overall complexity
  • Review how state standards and definitions match with local standards and definitions
  • Examine how the changes to the vendor fee are working
  • Explore eliminating requirement for taxpayers to use branch ID reporting
  • Explore an exemption for isolated or occasional sale of a business in an asset sale
  • Streamlining and possibly making uniform the state and local sales tax exemptions for medical devices
  • Any other relevant topics


Auto-Repeal: July 2025

Arguments For:

The work here is still on-going, as we have come a long way with bills in the last few sessions but still have one of the most complicated sales and use tax setups in the country. Committees like this tend to be restricted to defined areas of study, so this bill opens up new ones for the committee to explore in order to further simplify our system here in Colorado. We also need to monitor how the large recent changes are doing. Legislative committees such as this one usually do not undergo sunset review. The legislature decides if it needs to keep going.

Arguments Against:

No committee should remove itself from the sunset review process. This committee only proposed two bills out of its allowable five this session and one of them was this one, so it is not so clear that it needs to continue.

How Should Your Representatives Vote on HB20-1022

HB20-1023 State Address Data For Sales And Use Tax Collection (Williams (D), Tate (R)) [Kraft-Tharp (D), Van Winkle (R)]

From the Sales and Use Tax Simplification Task Force

AMENDED: Minor

SIGNED INTO LAW

Appropriation: None
Fiscal Impact: Negligible

Goal: Give guidance to state regarding geographic information system database it is required to develop in association with bill from last session on destination-based sales taxation.

Description:

Requires minimum of 95% accuracy on a statistically valid sample of addresses from the database for the geographic information system state is to build for sales tax vendors to determine taxation jurisdictions and amounts. Holds vendors harmless from errors based on errors or omissions in system data. Requires state to create rules to administer bill. Auto-repeals 90 days after verification of a working and tested system goes online.

Additional Information: n/a

Auto-Repeal: 90 days after verified system is online

Arguments For:

The state needed just a little more guidance on this system specifications and the bill provides it. In general it is good practice to remove obsolete provisions from statute, thus the auto-removal.

Arguments Against:

The auto-renew also removes the section that holds vendors harmless in the event of errors in the database. That should stay.

How Should Your Representatives Vote on HB20-1023

HB20-1024 Net Operating Loss Deduction Modifications (Moreno (D)) [Benavidez (D), Snyder (D)]

AMENDED: Minor

PASSED

From the Tax Expenditure Evaluation Interim Study Committee

Appropriation: None
Fiscal Impact: Unknown

Goal: Put the net operating loss tax deduction back the way it was before federal law changed in 2017 making it unlimited and to treat financial institutions the same as other taxpayers.

Description:

The state’s net operating loss tax deduction operation is tied to federal law. That law used to allow businesses to carry operating losses forward up to 20 years but changed in 2017 to allow businesses to carry losses forward for an unlimited period of time. This bill puts Colorado back onto the 20 year period by decoupling from federal law. Bill also repeals a provision that limited financial institutions to just 15 years of carry forward.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

This actually aligns Colorado with most other states, who have also recognized that it is not wise to allow unlimited years of loss carry forward. The 20 year period is sufficient for most companies and anything beyond that is likely an enormous company like Microsoft or Amazon using huge start-up losses to prevent the paying of taxes into the distant future. They don’t need any more help.

Arguments Against:

The federal law was changed to encourage businesses to take even more chances and innovate, secure that their losses would come back to them in the form of tax deductions into the future, not that they would eventually reach a cap where the losses ceased to matter. We should stick with federal law.

How Should Your Representatives Vote on HB20-1024

HB20-1025 Sales Tax Exemption Industrial And Manufacturing Energy Use (Tate (R)) [Benavidez (D), Snyder (D)]

From the Tax Expenditure Evaluation Interim Study Committee

AMENDED: Moderate

KILLED BY BILL SPONSORS

Appropriation: None
Fiscal Impact: Hard to estimate, guess is $12-31 million in added revenue at full implementation

Goal: Better quantify the energy use tax exemption by requiring that energy used is measured by a metered machine.

Description:

Makes is so in order to qualify for the sales tax exemption for energy used in various processes, it must be measured by a metered machine or a third party that quantifies the amount used for the exact purpose in the exemption.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

It is extremely for most people to correctly report in this section. Energy that is used but not for one of the allowed purposes does not count, so for instance energy used to light the break room does not qualify but energy used to power an industrial machine does. This leaves high possibility of either mistakes or outright fraud. We therefore need to require an easy way to measure this usage to allow for easier reporting and prevent potential fraud.

Arguments Against:

This sets up a larger burden for many businesses, who need to first understand that they need this meter and then be able to track it. Installing and maintaining the meter will also cost money. The department of revenue can always audit a taxpayer if they believe someone is trying to cheat the state out of taxes.

How Should Your Representatives Vote on HB20-1025

HB20-1083 Nursing Home Definition For Residential Property Tax (Holbert (R)) [Kraft-Tharp (D), Van Winkle (R)]

KILLED BY BILL SPONSORS

Appropriation: None
Fiscal Impact: $4.7 million lost for local governments, minimal gained by state

Goal: Treat all nursing homes the same for property tax purposes.

Description:

Slightly expands the definition of nursing homes by including nursing homes that provide convalescent care or rehabilitation services such as physical and occupational therapy and clarifying that the length of stay for resident’s does not matter. Then defines nursing homes as residential for property tax purposes. Previously there was a 30 day breakpoint, under 30 day stay facilities were classified as non-residential.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

First of all, we should be consistent in how we assess property taxes here just to avoid confusion. But more importantly, a nursing home is a home, regardless of length of stay, and should be classified as such. This will have the effect of lowering property tax bills for several facilities in the state, while slightly increasing income taxes (because businesses can deduct property taxes from income taxes and this will give them less money to deduct). On the whole, businesses will come out slightly ahead. Lost property tax revenues for schools can be offset by increased state revenues (around $1 million a year statewide). Last year’s education budget was $6.1 billion. The net loss in revenue the state will have to make up for schools is approximately 0.01% of the total education budget. Adams County’s budget last year was $517 million. It would lose around 0.04% of that with this change. Not as big a deal as it might sound.

Arguments Against:

This will put less money in local governments, an estimated $4.7 million a year. $1 million of that is school money the state would have to backfill (and the state’s increase will fall well short of $1 million per year, so this is a net drain on resources) but the rest is just gone. Adams County in particular looks to be the hardest hit, accounting for roughly half of the estimated loss by itself. At a time where schools are desperate for funds and we are looking in all the couch cushions for a way to do it, we don’t need to make a change that will result in less revenue, even if it a small percentage of the overall budget. Small changes add up.

How Should Your Representatives Vote on HB20-1083

HB20-1112 Expand Child Care Contribution Income Tax Credit [Hooton (D)]

AMENDED: Very Significant

KILLED ON HOUSE CALENDAR

Appropriation: None
Fiscal Impact: $15.5 million at full implementation

Goal: Expand age of children eligible for child care tax credit up to 18 Expands child care tax credit to care for those who are under 18 and in homeless shelters and makes donating money to child advocacy centers eligible expenses.

Description:

Changes the upper age range for child cares expenses to be eligible for the state income tax child care credit (50% of expense eligible for credit) from 12 to 18 by including those between 12 and 18 and in homeless shelters. Expands eligible expenses to include money donated to a child advocacy center for its establishment or operation. Child advocacy centers provide a comprehensive multi-disciplinary team response to allegations of child abuse or neglect in a dedicated, child-friendly setting.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

Parents are still responsible for their children’s care after the age of 12 and really we do not expect people to support themselves until they become adults. We have the child care tax credit because we recognize that proper care of children is expensive and benefits us all. It allows both parents to work, which not only fosters additional income and economic productivity, but also lives independent of the home. That again does not end at 12. Teenagers may be older, they may have more freedom, and by the tail end of their time as a minor they may be able to drive. But they may still require expensive care at times so that parents can work. Expanding this credit allows parents who may not otherwise be able to afford it to provide quality care for their child other than sitting home alone. This will also support the facilities that provide this care by increasing the size of their customer base. Child advocacy centers are a crucial child care tool, for children whose parents may not be doing the job of raising their children. In a sense, by donating to these centers we as a society are stepping into that parenting role and thus it is appropriate to encourage more donations to these centers by tying them into this tax credit.

Arguments Against:

The reason we do not currently extend the tax credit beyond 12 is that teenagers can be home alone. It isn’t always ideal, but the idea behind this credit is that parents for younger children have to find someone to take care of them when the parents need to work. It is simply mandatory. So of course we want to lend a helping hand. Teenagers are a different story. There is nothing mandatory about child care at this age, the kids are capable of being home by themselves. So we rightly cut the credit off because it is not the job of the state to supplement ideal out-of-home and out-of-school experiences for all teens. As for the advocacy centers, they are of course something that should be encouraged. But this tax credit is not the proper place, this tax credit is for parents paying for the care of their children. We certainly do not need to put $15.5 million toward this, money that we can spend better in other places.


This tax credit shouldn’t exist in the first place, much less be expanded. Having and raising a child is a choice, it is not the responsibility of the state to buttress those who cannot properly support their children or to subsidize those who want to lavish funds on child care.

How Should Your Representatives Vote on HB20-1112

HB20-1166 Amendments Due To Automatic Repeal of Tax Credit (Tate (R)) [Arndt (D), McKean (R)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Fixes an income tax credit that was replacing another credit in law but didn’t refer to the new credit in multiple places in the law (reference is still to old credit).

HB20-1174 Sales Tax Statute Modifications To Address Defect (Tate (R)) [McKean (R), D. Valdez (D)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Makes penalties for failure to pay the correct sales tax the same in law as charged by department of revenue. Realigns penalty section for sales tax and use tax. Repeals a useless sales tax deduction for vehicles over 26,000 pounds.

HB20-1175 Modify Certain Tax Statutes To Address Defects (Tate (R)) [McKean (R), D. Valdez (D)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Puts all of the exceptions for prohibiting disclosure by the department of revenue in the same place. Adds some missing mandatory electronic tax filing and payment requirements that didn’t make it into H19-1256. Fixes a conflict for the tax threshold that requires estimated payments from two different laws on corporate severance taxes.

HB20-1176 Income Tax Statute Modification To Address Defects (Tate (R)) [D. Valdez (D)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Repeals obsolete tax deductions and credits and fixes some language errors.

HB20-1177 Enterprise Zone Statute Fixes Of Defects (Tate (R)) [Arndt (D)] TECHNICAL BILL

From the Statutory Revision Committee

PASSED

Description:

Repeals an obsolete provision, moves another and fixed an incorrect reference in tax credit provisions for enterprise zone administration.

HB20-1181 Nonprofit Transit Authority Agency Fuel Tax (Moreno (D), Woodward (R)) [Arndt (D), McKean (R)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Repeals an obsolete fuel tax exemption that has never been claimed.

HB20-1182 Residents Of Bordering States Sales Tax Exemption (Moreno (D)) [Arndt (D), McKean (R)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Repeals a sales tax exemption for bordering states that no one can qualify for.

HB20-1194 Extend Red Cross Tax Check-off (Coram (R), Story (D)) [Exum (D), Will (R)]

AMENDED: Significant

KILLED BY BILL SPONSORS

Appropriation: None
Fiscal Impact: None

Goal: Permanently reauthorize the Red Cross check-off box for voluntary contributions of income tax refunds on state income tax return forms.

Description: Permanently reauthorizes the Red Cross to appear as on option on the list of groups for voluntary contributions of income tax refunds on state income tax return forms through 2025.

Additional Information: n/a

Auto-Repeal: January 2026

Arguments For:

The Red Cross has been a successful option on this form, bringing in an average of $87,808 dollars on over 7,400 donations in each of the past three years. So not only is it a worthy charity, people clearly utilize this option on their tax return. It has clearly earned a permanent spot as on option on tax returns.

Arguments Against: 

This entire program is far too unregulated and needs to change. There is no state oversight or reporting required for how the money raised is spent and it has turned into a political popularity contest at the legislature, with the best connected groups able to get on the form since there is no formal application process (it just requires a bill like this one) and then sometimes stay on even when they fail to meet the minimum number of contributions (the legislature just rewrites the rules). We need something with stronger oversight and should not reauthorize organizations until we have it, and we certainly should not do so permanently.

How Should Your Representatives Vote on HB20-1194

HB20-1202 Previous Taxed Income Gain Deduction C Corporation (Moreno (D)) [D. Valdez (D)] TECHNICAL BILL

From the Statutory Revision Committee

KILLED BY BILL SPONSORS

Description:

Repeals an obsolete tax deduction that can no longer be claimed.

HB20-1203 EITC Earned Income Tax Credit And Child Tax Credit And Income Definition (Gonzales (D)) [Sirota (D), Gray (D)]

AMENDED: Minor

KILLED ON HOUSE CALENDAR

Appropriation: None
Fiscal Impact: About $500,000 a year in additional expenses, unknown precisely how much tax revenue but should be around zero

Goal: Remove a state tax break based on federal law for business income passed-through to personal taxes and use that money to expand the state earned income tax credit and create a state child tax credit.

Description:

Requires any taxpayer who claims the federal pass-through tax deduction for sole proprietorships, partnerships, and S corporations that are taxed through their owners’ individual incomes to base their state of Colorado tax amount on income with that deduction added back in (as if it did not exist for Colorado). Expands the state earned income tax credit (EITC) from 10% of the federal EITC to 20% 20.12%. The Colorado version of the federal child tax credit was enacted with the provision that it could only become active if Congress passed legislation allowing states to collect sales tax on sales made out of the state. This bill repeals that requirement and makes the tax credit active.

Additional Information:

The federal pass-through deduction allows these owners to deduct 20% of income earned by their companies when computing their federal tax income. Colorado bases your income tax rate on your federal tax income, which is why the federal tax law affects Colorado income taxation. So in essence it is a 1% tax cut for anyone who qualifies for Colorado taxes, which this bill reverses. This law was part of the massive federal tax law changes in 2017 and expires in 2025.

The EITC is available to taxpayers with incomes falling below certain thresholds. In 2020 those are $15,820 with zero children, $41,756 with one child, $47,440 with two, and $50,954 with three or more. Benefits also range depending on number of children, ranging from $538 to $6,660. The Colorado portion of this is a percentage of that benefit, so right now it is $54 to $660, this bill doubles it to $108 to $1,320.

The federal child tax credit is available to people filing jointly at under $400,000 or singly at $200,000. It is $2,000 per child under 17. If the total credit is more than what the taxpayer owes they can take a refundable credit of $1,400 per child (the $2,000 is not refundable, so you don’t get money back if you zero out your taxes). The Colorado version of this is 30% of the federal 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). So that’s $600, $300, and $100 per child.


Auto-Repeal: None

Arguments For:

There is a lot going on here but in essence we are taking about $150 million in tax breaks away from some Coloradans and giving it instead to low income Coloradans. The net revenue impact to the state may fluctuate and cannot be estimated to the exact dollar but it should be around zero at least until 2026. Before discussing the individual tax credits, an important fact about Colorado: we have a regressive income tax system, which means the rich pay a lower percentage in taxes than the poor. This is because we start with a flat tax rate, and there are more lucrative tax breaks for the wealthy than for the poor. And this is all before we even consider this additional federal tax break. This unfairness is compounded by sales taxes, which of course are the same no matter what your income is, but hurt poor people much more. 2015 is the last year for which we have complete data, and those earning $200,000 or more paid an effective total tax rate to the state of 3.9% of their income. Those earning $0-$15,000 paid 6.3%. But people don’t put percentages into the bank account, so even if it was the same percentage the fact remains that you talking about people who in poverty versus people who are most definitely not. With that in mind let’s talk about each of these three tax credits individually. The federal tax break for pass-through income firstly benefits business owners and no one else. Freelancers of course can form their own personal business, and many legal, consulting, and accounting firms are set up this way. So are a lot of hedge funds and private equity groups. But on the whole, people making more than $1 million a year are getting 44% of the benefits from this law and people making less than $200,000 are getting less than 25%. Think about what it means that we aren’t even thinking about breaking down lower levels of income. So this is a tax break for the wealthy who need it the least. Getting rid of it in Colorado frees up that money for someone else who might need it. The EITC is one of the most effective tools in our battle against poverty. Numerous studies have shown it boosts work effort, particularly among single mothers. This in turn helps get people off welfare programs. Spending around ½ of the money we save on these tax breaks for the rich is spending about $75 million to help lift Coloradans out of poverty. On the federal level this credit has helped millions of families escape poverty. The child tax credit operates in a similar manner but it focuses more intensely on families with children. It is hard to overestimate how expensive children are, and the overall societal benefits to keeping children out of poverty are immense. Increased health and education outcomes lead to better paying jobs and a better future. This is a multi-generation tax credit. And it should be law already. The bill that enacted this credit into law wasn’t written well: instead of focusing on the outcome that would trigger the credit (collecting out of state sales tax revenue) it focused on the mechanism. So since the mechanism turned into a Supreme Court ruling (Mayfair v. South Dakota), the tax credit failed to trigger. So the added revenue from out of state sales tax collections is already expected to pay for this particular credit. It is important to point out that it is irrelevant that the federal tax credit expires in 2025. If the credit expires, it won’t affect Colorado taxes at all because this bill already is removing the credit. It would affect how much taxpayers pay to the federal government, but that is not our concern. It is also worth noting that the real engine of our economy is the workers: no business exists without demand and if people don’t make enough money to buy things, all of the job creators in the world can’t help. Corporate taxes are also at the same level as individual taxes in Colorado, so the entire point of the business pass through cut (that just cutting corporate taxes down to individual levels wouldn’t help some people) doesn’t make sense here.

Arguments Against:

The idea that wealthy people just don’t need their hard earned money is not fair to them. Another way to look at our state taxes is that those who make over $200,000 a year support 1/3 of the entire tax burden of the state, while those that make $0-15,000 support just 3%. So the rich are paying. And the idea behind the pass-through tax credit is to help the engine of our economy, business owners who create jobs. The more money we can allow them to keep in their businesses (remember their business income is being paid on personal taxes) the more they can grow their businesses and create more jobs. So it has to be a balancing act between credits targeted to help the poor and those targeted to help create more jobs for everyone. Pulling $150 million out of businesses in the state and redistributing it to poor people may help us feel better and some individual families here and there but may also damage the overall economy in the state.


We can do the child tax credit since the out of state sales tax revenue should cover it without doing the rest of this bill. Keep the tax credit to help businesses.


This is a good time to revisit the entire child tax credit 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 HB20-1203

HB20-1205 Pre-1987 Net Operating Loss Deduction (Moreno (D)) [McKean (R)] TECHNICAL BILL

From the Statutory Revision Committee

SIGNED INTO LAW

Description:

Repeals an obsolete net operating loss tax deduction.

HB20-1303 Excise Tax On Alcohol Beverages Sacramental Wines [Benavidez (D), Snyder (D)]

KILLED BY BILL SPONSORS

Appropriation: None
Fiscal Impact: Negligible

Goal: Repeal the exemption on excise tax for sale or distribution of sacramental wines used for religious purposes.

Description:

Repeals the exemption on excise tax for sale or distribution of sacramental wines used for religious purposes.

Additional Information: n/a

Arguments For:

This exemption is very narrowly tailored and thus is claimed by a very small number of taxpayers for just $2,600 a year. It doesn’t even apply to some religions. Given our extremely confusing sales tax code, we need to get rid of rarely used provisions where we can to simplify things for retailers and consumers.

Arguments Against: n/a

How Should Your Representatives Vote on HB20-1303

HB20-1304 Clarify Occasional Alcohol Beverage Sale Exemption [Benavidez (D), Snyder (D)] TECHNICAL BILL

KILLED BY BILL SPONSORS

Description:

Clarifies that while occasional sales of alcohol by public auction do not require a license they are subject to excise tax.

HB20-1306 Excise Tax Credit Unsalable Alcohol Beverages [Benavidez (D)]

KILLED BY BILL SPONSORS

Appropriation: None
Fiscal Impact: Minimal each year

Goal: Repeal ability for manufacturers and distributors of alcohol to get a refund or credit for excise tax paid on alcoholic beverages that later became unsellable due to damage or destruction.

Description: Repeals ability for manufacturers and distributors of alcohol to get a refund or credit for excise tax paid on alcoholic beverages that later became unsellable due to damage or destruction.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

Only 19% of the state’s eligible businesses claimed this credit in the 2017 tax year (most recent year for which we have data) for just an average of $1,561. To claim this refund taxpayers have to submit an affidavit itemizing the items destroyed and the date of destruction, as well as evidence that the tax was paid on the product. Because the department almost never witnesses the destruction in person (although they ask businesses to let them know if such destruction is going to occur) the credit is ripe for fraud. It also likely overlaps with most commercial property insurance, which usually covers retail value of a product (which includes the excise tax). This credit is therefore mostly redundant, open to fraud, and little used. The additional hoops envisioned in arguments against would make it even less worth it for most businesses to pursue. It should be repealed.

Arguments Against:

Little used is not the same as not used and since it is little used it would seem it is not being abused fraudulently. Since most commercial insurance is not the same as all commercial insurance, we should let the credit stand so everyone can be made whole in cases of damage or destruction. If we are concerned about fraud, we can require photo evidence. If we are concerned about double-dipping, we can require proof the excise tax was not covered by commercial property insurance.

How Should Your Representatives Vote on HB20-1306

HB20-1322 Public Participation Property Tax Manuals (Lundeen (D), Moreno (D)) [Larson (R), Gray (D)]

KILLED ON HOUSE CALENDAR

Appropriation: None
Fiscal Impact: None

Goal: Require public hearings prior to making any changes to materials used to determine property value for taxation purposes in Colorado.

Description:

Requires a public hearing prior to the property tax administrator proposing any change to manuals, appraisal procedures, instructions, or guidelines for determining property value in Colorado. At least two weeks prior to the hearing the administrator must publish a notice of the proposed changes, including the date, place, and time of the hearing, and either the terms or the substance of the proposed change or a description of the subjects and issues involved.

For notification, the administrator must keep a list of all people who have expressed interest in being notified with e-mail addresses. A person on the list can request a copy of the notice via mail, but must then pay for postal expenses. Administrator must consider all public input, including any petitions related to these materials, but the decision is ultimately up to them.  All of this must start in 2021.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

Property tax valuation is extremely important to everyone in Colorado, because precisely how we decide how things are valued not only affects individual’s and business’ property tax payments, but also the property tax rate of the entire state. This is because of the Gallagher amendment, which requires personal and business property taxes to maintain a certain ratio. So if a change in valuation would cause that ratio to go out of balance, rates would have to be lowered in order to get the balance back (rates cannot be raised without voter permission due to TABOR). So the public and any interested party should absolutely be able to weigh in on these matters.

Arguments Against:

The administrator is not making sweeping decisions without consulting key stakeholders, that’s just how state government works. So we don’t have to worry about a decision triggering rate changes. Leave all of this to the experts.

How Should Your Representatives Vote on HB20-1322

HB20-1342 Property Tax Valuation Appeals [Gray (D), Larson (R)]

KILLED BY BILL SPONSORS

Appropriation: None
Fiscal Impact: Not yet released

Goal: Allow for expedited property valuation appeals to a hearing officer instead of the board of assessment appeals under certain circumstances, require assessors to put the estimated tax payments on valuation notices and to fix any systematic errors discovered across all affected assessments, and create a task force to study changes to the protest deadlines.

Description:

Allows the board of assessment appeals to refer a matter before it to a hearing officer for an expedited hearing. This can only occur if the difference in the contested valuation is less than 10% of the previous year’s valuation and if the taxpayer requests it on-time (30 days after document request or 60 days after appeal is filed, whichever is later). Appeal must occur within 60 days of request and decision must come within 30 days of hearing. Board may alter or vacate the ruling but if it does not act within 30 days of the decision the decision stands and is unappealable (just like rulings by the board).

Currently assessor may include in their notice of valuation an estimate of property taxes owed upon permission of the county board. The bill makes this mandatory. Requires any assessor that finds through the appeals process that they made a systematic error to not only correct the assessment of the person making the appeal, but all similar properties with the same error.

Creates the Property Tax Valuation Protest Deadline Task Force to consider changes to the deadlines and related issues for a taxpayer to protest a property tax valuation that would enable taxpayers to have more time before they must act. Task force must submit a report to the legislature by end of 2021.

Additional Information:

At the direction of the board, the office of the attorney general shall attend the hearing conducted by the officer and advise the officer on matters of procedure, evidence and law. If the state property tax administrator is party to an appeal the legal counsel cannot be the same person who represents the state in the matter. The written decision of the officer can either be a summary upon request from both parties, or a full decision which includes specific findings of fact and conclusions of law. If either party is dissatisfied with a summary decision they may request a full decision within 10 days.

Task force is composed of the property tax administrator and members appointed by the governor: three county assessors from different county categories, one member who is a small business owner, one member who is a building owner or manager, and one member who represents residential taxpayers. All members must be appointed by end of year and members serve without compensation. It must meet at least four times. Repeals in July 2022.


Auto-Repeal: July 2022 for task force

Arguments For:

This provides an expedited process for smaller assessment disputes that should relieve some of the burden on the board of assessment appeals while still providing a fair process for the taxpayer. We absolutely should be fixing known errors in assessments, so requiring that to be done when systematic errors are made is a no-brainer. It is also more transparent to provide the actual taxes that would be owed rather than just the valuation as the property owner likely views it more through the lens of how much they will need to pay rather than how much the property is worth. So making that mandatory rather than optional should help more property owners have a better understanding of exactly what the valuation means. Finally there may be ways we can improve the timing of this process, which is still pretty tight despite recent changes. That not only helps property owners but also may actually cut down on the number of appeals since right now some folks may be appealing just to preserve their right to do so rather than because they have studied the assessment and believe it is wrong.

Arguments Against:

Given that the decision is unappealable, we should not be foisting off appeals onto a hearing officer that may require legal guidance from the attorney general’s office. It is true that the property owner has to request this process, but sometimes you need to save people from themselves and they may not understand what they are giving up in the interests of speed. It is also true the full board has 30 days to review the decision but given their workload it seems unlikely they are going to put much effort into doing that.

How Should Your Representatives Vote on HB1342

HB20-1420 Adjust Tax Expenditures For State Education Fund (Moreno (D), Hansen (D)) [Sirota (D), Gray (D)]

AMENDED: Very Significant

PASSED

Appropriation: $49,002
Fiscal Impact: Net $90 million this year, $32 million next year, then a $58 million loss by 2022-23

Goal: Repeal multiple tax breaks, expand the Earned Income Tax Credit, reduce the sales and use tax exemptions for industrial energy uses, in part to balance the budget this year (and help with next year) and put $150 $175 $113 million toward education next year and $200 $275 $23 million in each of the following three years in 2022.

Description:

Repeals multiple tax breaks, expands the Earned Income Tax Credit (EITC), and reduces the sales and use tax exemptions for industrial energy uses. This will net the state $248 $234 $94.1 million this year, $408 $373 $32 million next year, and then $350 the state will lose $58 million by 2022-23. Requires $150 $175 $113 million to be transferred from the general fund to the state education fund next year, then $200 $275 $23 million each of the following three years in 2022. Before discussing the tax breaks, it is important to understand that your income for state tax purposes is the same as it is for federal purposes unless the state specifically passes a law saying otherwise. So when federal tax law changes, so does state law (again, unless the state changes its own laws, which is in large part what is happening here).

Specific tax breaks that are repealed or reduced are:

  • The bill limits the operating losses that C corporations can take against tax liability to $400,000 (C corporations pass through the income of the business to the owner’s individual taxes, so you can use operating losses to offset personal income). Any excess losses can be carried forward to future years with 3.25 annual interest. This will bring in $62 million this year, $129 million next year, and up to $147 million by 2023-24
  • For taxpayers whose adjusted gross income exceeds $75,000 $163,300 for single filers or $150,000 $326,600 for joint filers, the provision in the 2017 federal tax bill that allowed pass-through businesses and C corporations to deduct 20% of that pass-through income is repealed at the state level. So in essence it is a 1% tax cut for anyone who qualifies for Colorado taxes, which this bill reverses. This law was part of the massive federal tax law changes in 2017 and expires in 2025. That will bring in $43 $19.5 million this year, $95 $43 million next year and up to $120 $24 million by 2023-24
  • Currently insurance policies underwritten by insurers with a regional office in Colorado are taxed at a rate of 1% on premiums instead of 2%. The bill repeals this, making it 2% for everyone except surplus line brokers who stay at 3%. The bill also ends an exemption for insurance policies issued in conjunction with an annuity plan if the plan is a deposit-like contract that do not incorporate mortality or morbidity risks. Other annuities remain exempt. This will bring in $38 million this year, $119 million next year, and $132 million by 2023-24
  • Three tax breaks that were in the federal CARES act earlier this year are reversed at the state level. They are all dealing with pass-throughs to personal income tax and were all delays in implementation of previous law until 2021. One is a net operating loss deduction that was reduced from 100% to 80%, one is a business loss deduction that was capped, and one was a business interest income deduction that was reduced from 50% to 30%. Eliminating the delay in implementation brings in $80 million this year and $23 million next year. It has no effect after that (since the CARES act delay expires)
  • Currently electricity, coal, gas, fuel oil, steam, coke, or nuclear fuel for industrial use is entirely exempt from sales and uses taxes. This bill repeals that exemption, then creates a refund of up to $1,000 per filing period except the limit does not apply to diesel for off-road use; all of the energy currently exempted when used for agricultural purposes or for generating electricity or for use in street and railroad transportation. This entire section cannot affect the sales and use taxes of local governments that use the state as their base. This begins in 2023. The net effect of this is $38 million by 2023-24.
  • The bill eliminates the current state tax deduction for capital gains income for real or tangible personal property acquired after May 9, 1994, and held for at least 5 years, leaving only property acquired before May 9, 1994, as eligible. This will bring in $8 million this year, $17 million next year, and $21 million by 2023-24.

The tax break that is expanded is the EITC. The bill increases the EITC tax credit from 10% to 20% 15% of the EITC allowed on federal returns, but delays the increase until 2023, and expands the EITC to include those who do not have social security numbers but do have state taxpayer identification numbers in a phased-in manner: 10% until 2023 at which point it becomes 20% 15% like everyone else. The EITC is available to taxpayers with incomes falling below certain thresholds. In 2020 those are $15,820 with zero children, $41,756 with one child, $47,440 with two, and $50,954 with three or more. Benefits also range depending on number of children, ranging from $538 to $6,660. The Colorado portion of this is a percentage of that benefit, so right now it is $54 to $660, this bill doubles it to $108 to $1,320. This will cost the state $15 $13 million next year from the expanded benefit, and then $109 $58 million by 2023-24, of which $20 $15.7 million comes from expanding the benefit.

Additional Information: n/a

Auto-Repeal: n/a

Arguments For:

There is a lot going on here, but in essence we are removing $263 $211 $100 million of tax breaks this year and about $460 $65 million at full implementation from in 2022, in the overwhelming majority of cases, the wealthiest Coloradans, and diverting large chunks of that to our cash-strapped education budget. At this point the budget woes for this year are well-known. We had to slash $600 million from education, most of which will hopefully be made up for by federal CARES act funds. Next year will be worse. Everyone already knows it and we are not likely to have federal aid to help backfill the losses. So it makes sense to take a hard look at some tax law, in particular new tax laws, which are helping the wealthiest among us who need it the least. All so we can avoid having to make even more drastic cuts next year (and this year: $263 $211 $100 million will help save the Homestead Property Tax break from being cut). Before discussing the individual tax credits, an important fact about Colorado: we have a regressive income tax system, which means the rich pay a lower percentage in taxes than the poor. This is because we start with a flat tax rate, and there are more lucrative tax breaks for the wealthy than for the poor. And this is all before we even consider this additional federal tax break. This unfairness is compounded by sales taxes, which of course are the same no matter what your income is, but hurt poor people much more. 2015 is the last year for which we have complete data, and those earning $200,000 or more paid an effective total tax rate to the state of 3.9% of their income. Those earning $0-$15,000 paid 6.3%. But people don’t put percentages into the bank account, so even if it was the same percentage the fact remains that you talking about people who in poverty versus people who are most definitely not. With that in mind let’s talk about each of these three tax credits individually. The federal tax breaks for pass-through income firstly benefits business owners and no one else. Freelancers of course can form their own personal business, and many legal, consulting, and accounting firms are set up this way. So are a lot of hedge funds and private equity groups. But on the whole, people making more than $1 million a year are getting 44% of the benefits from this law and people making less than $200,000 are getting less than 25%. Think about what it means that we aren’t even thinking about breaking down lower levels of income. It’s also pretty important to remember that big chunks of this are simple resets to previous law. Businesses were doing just fine in 2016. And then we have the deductions to do with net operating losses. Think about that $400,000 annual cap. That says that if you lose more than $400,000 in your business, you cannot use those losses to offset taxes owed on your personal income. Because of course the business could still have been paying you hundreds of thousands of dollars in salary. It is estimated that 2% of corporate tax filers are using this right now. For the capital gains reduction, 99% of the benefits of this credit go to the wealthiest 1%, and capital gains is mostly about selling stocks and selling property. Neither has much to do with creating jobs. For insurers, the insurance industry is one of the most profitable industries in the entire country, and dangling out the 1% break to try to get regional HQs here in Colorado simply isn’t worth the revenue we are losing (this according to the state auditor). Another highly profitable industry is energy, the bill exempts some sectors that either would have a hard time dealing with the loss of the exemption or provide wider energy concerns to all us (like electricity generation) but again, having to pay some sales and use tax like the rest of us isn’t going to hurt this industry. Which brings us to the one increase in tax breaks in the bill: the EITC. The EITC is one of the most effective tools in our battle against poverty. Numerous studies have shown it boosts work effort, particularly among single mothers. This in turn helps get people off welfare programs. Spending around some of the money we save on these tax breaks for the rich is spending about $100 million to help lift Coloradans out of poverty. On the federal level this credit has helped millions of families escape poverty. And severe poverty affects us as a society, through increased social safety net costs and worse outcomes for children. So it does not make sense to exclude any Coloradan who is paying state income taxes from this credit.

Arguments Against:

The idea that wealthy people just don’t need their hard earned money is not fair to them. Another way to look at our state taxes is that those who make over $200,000 a year support 1/3 of the entire tax burden of the state, while those that make $0-15,000 support just 3%. So the rich are paying. And the idea behind the pass-through tax credit is to help the engine of our economy, business owners who create jobs. The more money we can allow them to keep in their businesses (remember their business income is being paid on personal taxes) the more they can grow their businesses and create more jobs. So it has to be a balancing act between credits targeted to help the poor and those targeted to help create more jobs for everyone. Pulling $263 $100 million out of businesses in the state during an economic recession may also damage the overall economy in the state, just as much or possibly more than cutting government programs (and we could cut programs other than the Homestead Act to make up the needed difference to balance this year’s budget). Some of these tax breaks were included in the CARES act specifically to help struggling businesses stay afloat. Pulling $460 million out of businesses in the future to divert large chunks to education and the EITC and also keep some in the general fund for whatever purpose the legislature wants could also be shortsighted. Yes we need to fund education, but there are other ways to do it. The bill also targets two industries for tax increases: insurers and energy producers. Both targets could lead to job losses in the state, as energy is one of our biggest business sectors and any regional HQ that is here for the tax credit (or may come in the future) is bringing jobs with it. We also should not be expanding the EITC to include those without social security numbers, which is basically those who are in this country illegally. Immigration law is a federal matter, but the more attractive we make Colorado to those in the country illegally, the more likely it is that more of them will come to Colorado as opposed to other states (or simply staying in their home country).


This is a good time to revisit the entire child tax credit idea and get rid of it, using the savings to fund our budget gaps and educational needs. 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.


We should not be using the elimination of these privileged tax breaks as solely fuel for the education budget, EITC, and whatever else the excess money (which is a lot!) ends up going to. We should instead use the excess to lower everyone’s taxes in an across the board cut.


This bill is more than just a hollow shell of itself, it is now a long-term net negative to our budget, once the CARES act cuts fade but the EITC expansion is still there. The cuts that were removed from this bill weren't going to be some sort of drag on our economy, they affect income (yes income, so you have to make money) on the wealthiest people in the state. First the deductions to do with net operating losses. Think about that $400,000 annual cap. That says that if you lose more than $400,000 in your business, you cannot use those losses to offset taxes owed on your personal income. Because of course the business could still have been paying you hundreds of thousands of dollars in salary. It is estimated that 2% of corporate tax filers are using this right now. For the capital gains reduction, 99% of the benefits of this credit go to the wealthiest 1%, and capital gains is mostly about selling stocks and selling property. Neither has much to do with creating jobs. For insurers, the insurance industry is one of the most profitable industries in the entire country, and dangling out the 1% break to try to get regional HQs here in Colorado simply isn’t worth the revenue we are losing (this according to the state auditor). Another highly profitable industry is energy, the bill exempts some sectors that either would have a hard time dealing with the loss of the exemption or provide wider energy concerns to all us (like electricity generation) but again, having to pay some sales and use tax like the rest of us isn’t going to hurt this industry.

How Should Your Representatives Vote on HB20-1420

HB20-1421 Delinquent Interest Payments Property Tax (Donovan (D), Sonnenberg (R)) [Roberts (D), Saine (R)]

AMENDED: Moderate

PASSED

Appropriation: None
Fiscal Impact: None at state level

Goal: Allow counties to temporarily reduce, waive, or suspend delinquent interest payments for property tax payments if the county is running behind on collections compared to last year, with the ability for local jurisdictions to get financial help from the county if this would make them unable to meet bond payment requirements.

Description:

Allows any county to temporarily reduce, waive, or suspend delinquent interest payments for property tax payments if the county has collected 90% or less of the total amount of property taxes between January and June this year than it did last year. County must notify local taxing jurisdictions if it takes this step and the local taxing jurisdiction must notify the county board if this suspension would make it unable to meet bond payments and if the local jurisdiction demonstrates financial need the county must advance property tax payments to help. This advance cannot exceed the shortfall.

Additional Information: n/a

Auto-Repeal: January 2021

Arguments For:

This is a way for us to ease the burden of property tax payments on citizens affected by the Coronavirus, but it leaves the matter up to the elected officials of each county. Since that decision can have a cascading effect on local jurisdictions, we need a way to ensure those jurisdictions don’t get into serious financial difficulty as a result.

Arguments Against:

This is both too broad and not broad enough. Rather than trying to target relief for those affected by Coronavirus, this bill is just a blanket provision. But rather than ensure all Coloradans have relief, the bill leaves it up to counties to decide.

How Should Your Representatives Vote on HB20-1421

SB20-019 Legislative Oversight Committee Concerning Tax Policy (Tate (R)) [Benavidez (D), Bockenfeld (R)]

From the Tax Expenditure Evaluation Interim Study Committee

AMENDED: Minor

KILLED ON SENATE CALENDAR

Appropriation: $80,222
Fiscal Impact: Minimal each year

Goal: Create a legislative committee on tax policy and a working group to examine our tax code and make recommendations for changes.

Description:

Creates the legislative oversight committee concerning tax policy. Members appointed by chamber leadership in unequal manner (2:1 in favor of majority party of chamber). and two non-legislative members each, one representing state counties and one representing state cities and towns. Committee tasked with overseeing task force created by bill and with considering policy considerations in tax expenditure report prepared by state auditor. Task force consists of 21 members of various backgrounds, including government officials, experts, and citizens. Task force will study all tax policy in the state and make annual recommendations to the legislature. It must also be available to the oversight committee to provide feedback on proposals not directly associated with the task force. Task force ends in July 2025.

Additional Information:

Committee functions like other legislative committees in terms of membership and staffing from state staff. It must meet at least four times a year and committee members must attend at least one task force meeting. It is treated like an interim committee in terms of the rules around bill introduction deadlines and limitations on number of bills members can sponsor.

Task force must meet at least six times a year. Members are not compensated. Membership as follows:

  • Four non-voting expert members appointed by director of research of legislative council, director of office of legislative legal services, staff director of joint budget committee, and state auditor
  • Voting members selected by chair and vice chair of oversight committee
    • Representative of office of state planning and budgeting
    • Representative from taxation division of department of revenue
    • Representative of office of economic development
    • Representative of office of state treasurer
    • Two individuals from public or private institution of higher education, one with tax policy expertise and one with economics expertise
    • Four people representing local governments: one from home rule city, one from statutory city, one from home rule county, and one from statutory county
    • Two tax law practitioners not employed by a local government
    • Two CPAs not employed by a local government
    • Two business owners, one small business and one large
    • One person representing a non-profit with expertise in tax policy


Auto-Repeal: Task Force, July 2025

Arguments For:

We last had a comprehensive review of this sort of our tax policy in 2000 and the state has experience numerous tax code changes since then. The code has become more complicated and outdated through a long history of incremental and piecemeal modifications that may have resulted in unintended consequences, including the tax burden being borne disproportionately by some taxpayers and a diminished ability to attract and retain businesses in the state. We therefore need another comprehensive review and a more permanent structure going forward to keep an eye on the bigger picture, which is what this bill does. Any changes to the tax code will of course have to run through the legislative, and if appropriate, TABOR process.

Arguments Against:

We don’t need a formal task force to do a deep dive on tax issues. There are several outside groups who have done this work already (from both sides of the political aisle) and we should just rely on their work to guide our thoughts on what needs to be done going forward, rather than creating more layers of decision-making and fact-finding. The composition of the task force also only features two regular citizens (out of 21), with the rest either state or local government employees or tax experts. We need more regular voices for such a critical issue.

How Should Your Representatives Vote on SB20-019

SB20-020 Reduce The State Income Tax Rate (Sonnenberg (R)) [Pelton (R), Holtorf (D)]

KILLED IN SENATE COMMITTEE

Appropriation: None
Fiscal Impact: Loss of $100 million property tax exemption would have come from TABOR surplus in two years, plus potential additional losses in future years for same reason

Goal: Reduce the state income tax rate by 0.14%.

Description:

Reduces the state individual and corporate income tax rates from 4.63% to 4.49% and the alternative minimum tax by the same 0.14%.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

The state is flush with cash, so much so that we are projecting three straight years of TABOR tax refunds and the refund in 2019 was so large it triggered an automatic temporary reduction of the tax rate down to 4.5%. Right now the state is projected to return $1.1 billion to state taxpayers in the next three years. 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 cannot simply raise taxes back up in that circumstance, it would require voter approval on a general election ballot. 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. In addition, this bill causes the state to have to find tens of millions of dollars for property tax exemption refunds that would have been covered by TABOR refunds.


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. Lowering our taxes permanently will only make these funding issues worse. The solution continues to be, despite the results of the last election, to fix TABOR.


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 SB20-020

SB20-021 Tax Expenditure Bill Requirements (Tate (R)) [Snyder (D), Benavidez (D)]

From the Tax Expenditure Evaluation Interim Study Committee

PASSED

Appropriation: None
Fiscal Impact: None

Goal: Require more information about goals and measurement metrics for any tax expenditure (exemption, deduction, or credit).

Description:

Currently any tax expenditure bill must have a legislative declaration stating the purpose of the expenditure (whether it is new or an extension). This bill would require that declaration to be in the law itself, not non-statutory, for the expenditure to be classified by type, and for detailed information on the purpose of the expenditure including clear, relevant, and ascertainable metrics and data requirements to measure effectiveness. Also requires a defined automatic repeal date of the expenditure.

Additional Information:

Classifications are:

  • Intended to induce specific behavior by taxpayers
  • Intended to improve industry competitiveness
  • Intended to create or retain jobs
  • Intended to reduce structural inefficiencies in tax structure
  • Intended to provide tax relief to certain businesses or individuals


Auto-Repeal: None

Arguments For:

Part of the over-complication of our tax code comes from these expenditures, which is a fancy way of saying spending money through the tax code. In essence, we tell selected individuals and businesses that they do not have to pay their full tax burden. We advantage them over others in the state. This is not something that we should ever undertake lightly, so the current system of any sort of vague declaration being OK just isn’t good enough. We need to know what the precise goal is and how we are going to measure if we are achieving it, so that when it comes time to consider if we want to keep the expenditure, we have all the data we need to make an informed decision (but of course the data does not dictate the decision). Finally, no tax expenditure should ever be permanent. Having them expire means the expenditure has to be re-evaluated and repassed in order to continue.

Arguments Against:

This may prove to be a very difficult task for some tax expenditures where hard metrics might be elusive. Data is also a tricky thing in general: if you have a tax expenditure designed to spur more construction of affordable housing, for instance, and a measurement point is the amount of affordable housing in inventory statewide, an increase in inventory may or may not mean that the expenditure was actually successful. There may have been other factors and the expenditure had no impact. Likewise a decrease in inventory may be because of some other factor and the tax expenditure actually prevented the decrease from being worse. Correlation does not always equal causation. But data used in this manner may become short-hand for a superficial look at a tax expenditure rather than a deeper dive. The bill also does not establish an upper-bound for number of years an expenditure can exist. In theory, a tax expenditure with a 500 year duration would be permissible.


Some tax expenditures are so core to our state that it is needless to have to keep renewing them. If someone has a problem with a permanent tax expenditure, they can always repeal it legislatively.

How Should Your Representatives Vote on SB20-021

SB20-049 Senior Property Tax Exemption Medical Necessity (Gardner (R)) [Carver (R)]

KILLED IN SENATE COMMITTEE

Appropriation: None
Fiscal Impact: $0.8 million of tax revenue lost in initial year, up to $10.1 million of tax revenue lost at full implementation in 10 years.

Goal: Allow seniors who had to move for medical reasons to still qualify for the 10-year owner-occupier property tax exemption.

Description:

Allows seniors to receive the 10-year owner-occupier of a primary residence standard (required to be eligible for the 50% property tax exemption) if they would have qualified for the 10 years but for a medically forced move from a previous residence and they did not previously receive the exemption for a different residence and if they haven’t owned another residence in-between their current one and the one they had to leave for medical reasons. Senior must provide a form created by the state, signed by a doctor, establishing the proof of medical necessity to leave their previous residence.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

Needing to leave a home because of a medical necessity is a sad reality for some seniors. We should not penalize them for this, if they would have qualified for the 50% property tax exemption otherwise then they deserve the exemption. The bill has sufficient safeguards to prevent double dipping or reaching back to earlier residences to qualify.

Arguments Against:

If the point of this program is to keep seniors in their homes when property taxes rise above what they were when the senior bought the place, then a more recently purchased residence doesn’t apply. The point isn’t to give seniors money just because, it is that if you live in your home for a long time, the value of the property will rise, and so will the taxes, potentially to the point where you can’t afford the taxes anymore. Not being able to afford it is something that cannot happen when you purchase the residence, or even a few years afterwards. The current setup makes sense and there is no need to include those who had to move, for whatever reason.

How Should Your Representatives Vote on SB20-049

SB20-067 Vehicle Specific Ownership Tax Actual Price (Crowder (R))

KILLED IN SENATE COMMITTEE

Appropriation: None
Fiscal Impact: Full implementation: $13.5 million lost state revenue, $60 million lost local revenue a year

Goal: Change the way car ownership taxes are calculated for most vehicles from a percentage of MSRP to the actual amount paid for the vehicle.

Description:

Changes how the specific ownership tax (what is paid instead of property tax when the vehicle is registered) is calculated. Currently, Class A and B vehicles that weigh 16,000 pounds or less are calculated 75% of MSRP, those over 16,000 pounds use actual purchase price. Class C and D, regardless of weight, use 85% of MSRP. This bill changes all of those classes to use actual purchase price, regardless of weight. It does not alter the tax rates used for the classes, which decrease based on the age of the car.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

Many people do not pay MSRP for their vehicles, in fact the estimate is that the actual average purchase price is 16% lower than the MSRP. This is money we are unfairly taking out of the pockets of our citizens. The “R” in MSRP stands for recommended, it is not the actual price. And the vast majority of car dealerships do quite a bit of negotiating when they sell a car. So to base the tax on a price that few people actually pay artificially inflates it and adds money to our government coffers that is not deserved. The fact that it is a lot of money makes it even more important to rectify. This is the people's money, it belongs to them.

Arguments Against:

This would be a devastating blow to our local governments, school districts, and state budget. At full implementation the state is losing around $13.5 million, mostly in money that must be spent to backstop losses in school districts. The thing is, we already owe our school districts hundreds of millions of dollars, so that $13.5 million is funds that cannot be spent paying down our debt to schools. In the end, they may lose out on that money. And our local governments would lose $60 million in revenue at full implementation. That is a blow that many localities may struggle to withstand. We already have a system to account for cars losing their value based on their age, it’s the tax value percentage that drops from 2.1% in year one to 0.45% in year 5. And this is supposed to replace a property tax, not a sales tax. We pay property taxes based on the value of the property, not what was paid for it.

How Should Your Representatives Vote on SB20-067

SB20-099 Thresholds For Sales Tax Collection Requirements (Rankin (R)) [Will (R)]

KILLED IN SENATE COMMITTEE

Appropriation: None
Fiscal Impact: About $2.7 million at full implementation right now in state tax revenue and an un-estimated amount at the local level, some places with high concentrations of business could come out ahead.

Goal: Raise the cap where businesses have to pay destination-sourced sales taxes and make it permanent for in-state businesses.

Description:

Currently a business in Colorado has to do more than $100,000 of sales in Colorado in order to worry about destination-sourced sales taxes (where the tax is paid based on where the person receiving the goods or services is, rather than where the company is) and instead pays based on the business location until the state has an online tool available to help businesses navigate all of the tax ramifications. Businesses outside of the state have the same $100,000 threshold for destination-sourced taxes (they of course simply do not pay sales tax on orders in Colorado). This bill lifts both of these thresholds to $200,000 and makes the in-state exemption permanent.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

We know from data from the last year that there were 643 out-of-state tax holders that would not have needed to pay Colorado sales tax. There may be more businesses that decided not to sell in the state because of the sales tax requirements, we don’t have a way of knowing. As for in-state businesses, we have one of the most complicated sales taxes setups in the country, including over 70 different home rule municipalities. Businesses may simply refuse to sell to some parts of the state if it means jumping through multiple hoops (regardless of any online tool) in order to fulfill the order. So it makes sense to ensure that smaller businesses don’t have to worry about all of this and make the exemption permanent. We are really going to ask a $75,000 a year business to figure out double-digit sales tax regimes? And even a $175,000 business may struggle, so that is the reason to lift the cap.

Arguments Against:

We haven’t even really tested this yet, this is a brand new law from last year. We do of course know there are some businesses who would get exempt but let’s give it a least a few years before we start messing around with the thresholds. There are always going to be businesses that exist just beyond whatever number we set. The question is at what point does the economic activity in the state rise to the level that we need to be concerned about routing sales tax revenue to the appropriate places (and where it is worth the headache for the business). $100,000 in sales is quite a bit of money and thus an appropriate threshold. It seems like the 643 businesses did it last year. And remember it is mostly local governments who miss out on this, since they don’t get destination sourcing, not the state. The online tool and evolving work on the state’s online tax platform will allow people to interact with the system without too much hassle.

How Should Your Representatives Vote on SB20-099

SB20-134 Estimate Of Non-fee Sources Of Cash Fund Revenue (Woodward (R), Zenzinger (D)) [Arndt (D)] TECHNICAL BILL

SIGNED INTO LAW

Description:

Repeals unnecessary and confusing language around calculating the estimated revenue for non-fee sources.

SB20-148 Property Tax Exemption Value Adjustments (Marble (R)) [Saine (R)]

KILLED IN SENATE COMMITTEE

Appropriation: None
Fiscal Impact: Around $125 million a year

Goal: Increase the property tax exemption for qualifying seniors and disabled veterans from 50% of the first $200,000 to 50% of the first $435,000 and then tie future amounts to housing values.

Description:

Increases the property tax exemption for qualifying seniors and disabled veterans from 50% of the first $200,000 to 50% of the first $435,000. The amount is then tied to the average actual value of residential real property, excluding new construction, in the state with the $435,000 as the base amount. So if the average value increases by 5%, then the top end of the exemption must increase by 5%.

Additional Information: n/a

Auto-Repeal: None

Arguments For:

This exemption has not been raised since this exemption, called the homestead exemption, was first created in 2002. Obviously the value of homes has shot up since then, so the value of this exemption has greatly decreased. This bill simply fixes this first by catching us up to the present, and then by tying the future amount to the actual value of homes in the state. To qualify a senior must be 65 years or older and have lived in the same house for 10 years. The point is to help seniors stay in their homes when the property taxes skyrocket (since they are based on the value of the home). This is a program the voters of Colorado approved and we owe it to them to keep it current. The state has the power to reduce this exemption down to zero in tough budgetary times (as it did during the recession), so it won’t destroy our budget in good times, like right now. $200,000 doesn’t go very far when it comes to owning a home in Colorado anymore. It is time to change the law to recognize that.

Arguments Against:

When we have a TABOR refund, this exemption gets paid first. Otherwise it is general fund money. And it is a lot of money, around $125 million annually that will get sucked out of the state’s revenues (or alternatively, will not go to taxpayers in a TABOR refund year). A massive redistribution of resources to seniors and disabled veterans (but mostly seniors) instead of spending that money on schools, roads, or health care. This program is not means-tested, which means that although the value is capped at $435,000, someone who owns a multi-million dollar home still gets that 50% exemption on the first $435,000. Because you also have to own your home to benefit, the program also disproportionately benefits wealthier seniors (and white seniors). We don’t need to make it more generous on the upper end, if anything we need to think harder about how we can help those on the lower end.

How Should Your Representatives Vote on SB20-148

SB20-208 Extending Expiring Tax Check-offs (Story (D), Coram (R)) [Cutter (D), Duran (D)]

PASSED

Appropriation: None
Fiscal Impact: None

Goal: Permanently extend the spot on the list of groups for voluntary contributions of income tax refunds on state income tax return forms for multiple non-profits who will otherwise be removed from the form.

Description:

The American Red Cross, state domestic abuse program, Habitat for Humanity, pet overpopulation fund, and Special Olympics Colorado are all due to lose their spot on the on the list of groups for voluntary contributions of income tax refunds on state income tax return forms unless they are renewed. This bill authorizes all of them to stay on the list permanently so long as they meet the legal requirement of at least $50,000 in contributions each year. They join the homeless prevention activities fund, the Western Slope Military Veterans’ Cemetery, and the donate to a Colorado non-profit as permanent options without need for review or renewal.

Additional Information: n/a

Auto-Repeal: n/a

Arguments For:

This first in the nation but now widely copied program is a great way for deserving Colorado non-profits to raise money. People frequently end up with small amounts of income tax refunds that they do not mind donating. The list of companies provides them with an easy outlet to do so. These are all extremely worthy causes and have earned a permanent spot on the fund through large amounts of contributions each year. So long as they meet the contribution requirement, they deserve to stay permanently.

Arguments Against:

This entire program is far too unregulated and needs to change. There is no state oversight or reporting required for how the money raised is spent and it has turned into a political popularity contest at the legislature, with the best connected groups able to get on the form since there is no formal application process (it just requires a bill like this one) and then sometimes stay on even when they fail to meet the minimum number of contributions (the legislature just rewrites the rules, like the Western Slope Military Veterans Cemetery which does not need to meet the annual donation requirement). We need a stronger program with better oversight and should not be making anything permanent until we get it. Since we are in an emergency right now, we can extend these programs for another year to give us time to sort out the larger problems.

How Should Your Representatives Vote on SB208

SB20-223 Assessment Rate Moratorium & Conforming Changes (Hansen (D), Tate (R)) [Esgar (D), Soper (R)]

PASSED

Appropriation: None
Fiscal Impact: None, except to prevent local tax rate decreases

Goal: Freeze changing the ratio of valuation for property taxes if the Gallagher Amendment (which prescribes a specific ratio in the state Constitution) is repealed by voters this fall.

Description:

Freezes changing the ratio of valuation for property taxes if the Gallagher Amendment (which prescribes a specific ratio in the state Constitution) is repealed by voters this fall.

Additional Information: n/a

Auto-Repeal: n/a

Arguments For:

A key worry of some rural communities is that if Gallagher is repealed, the commercial property tax rate will get lowered around the state, which will drain resources out of these communities in just the same way the plummeting residential rate already has (commercial rates basically cannot be lowered under Gallagher because the required residential/commercial ratio of taxes is always out of whack toward lowering the residential side). This bill ensures this will not happen. This is a matter of state concern because the state must backfill missing school revenue for local governments. So if any of them decide to slash their tax rates, they know the state has to make up the difference at least for the education budget. It is also extremely difficult to raise taxes back up again, it requires a vote of the people due to TABOR.

Arguments Against:

We need to leave this up to the elected representatives of these counties, not use a statewide mandate. These are the folks who the people in these jurisdictions elected to make these very decisions and if the people in those places are not happy, they can vote them out.

How Should Your Representatives Vote on SB20-223

SCR20-001 Repeal Property Tax Assessment Rates (Tate (R), Hansen (D)) [Esgar (D), Soper (R)]

AMENDED: Minor

PASSED

Appropriation: None
Fiscal Impact: Prevent $695 million in lost property tax revenue next year

Goal: Put a measure on the 2020 ballot to repeal the Gallagher Amendment, which requires the proportion of property tax from residential and non-residential property remain constant by adjusting the residential property tax rate against a permanent rate of 29% for non-residential property.

Description:

Puts a measure on the 2020 ballot to repeal the Gallagher Amendment, which requires the proportion of property tax from residential and non-residential property remain constant by adjusting the residential property tax rate against a permanent rate of 29% for non-residential property so that residential property taxes are no more than 45% of the overall pie.

Additional Information: n/a

Auto-Repeal: n/a

Arguments For:

There’s a real good reason why this measure has bipartisan support. Property taxes are the main source of revenue for our schools. When Gallagher was implemented in 1982 the residential property tax rate was 21%. Because of the Gallagher amendment, it is now 7.15%. Rapidly rising home values have generally been the culprit (which because this is a statewide calculation severely penalizes the rest of the state as compared to the Front Range where most of that increase occurs). That is billions of dollars being sucked out of our schools over the past 35 years. The state backfills in as much as it can from the general fund each year (which has its own side effect in limiting what the state can spend in other areas like transportation), but has not been able to keep up and going into this year owed our schools hundreds of millions of dollars. Some areas have tried to counteract this with voter approved mill levies, which have the side-effect of hitting businesses even harder than residences to keep that crazy ratio going. This bad situation is about to get downright catastrophic. It is believed that Gallagher will force another huge residential property tax decrease next year, with $491 million being cut out of our schools and another $204 million lost revenue for county governments. This is due to a collapse in business taxation from the economic fallout from Coronavirus. That is a near game ender for some smaller districts and counties, who would not be able to fund basic functions like fire and hospital services. The good news is that we know about this in advance and do not have to go through with it. The people of Colorado can stop it and we can work towards building a more stable property tax future in a different way.

Arguments Against:

Gallagher has saved Colorado homeowners $35.3 billion in property taxes since 1983. That’s billion with a “b”. In 2019 alone it saved Coloradans $2.8 billion. That’s money in our pockets we can spend to help the state economy. Gallagher also guarantees that the business tax rate of 29% cannot be lowered, which is a boom to many local communities. Given the realities of TABOR, where any tax increase requires the vote of the citizens but tax cuts do not, it is entirely possible that free to cut this tax rate for the first time, lawmakers will do so and then we will be unable to raise the tax rates at all in the future. So local governments may weather this crisis only to find the rug pulled out from underneath them as business tax rates race toward the bottom in the same way that residential rates already have.

How Should Your Representatives Vote on SCR20-001