Colorado changed its tax code with a few signatures from Gov. Jared Polis on Wednesday.
Gone are some tax breaks for wealthy Coloradans and the large insurance and oil and gas sectors, among other businesses. Here to stay, at least for a couple of years, are $200 million in property tax cuts. All three new laws take effect immediately.
HB21-1311 and HB21-1312 are intended to tax higher earners and companies more than lower earners, while also helping small businesses and working families.
HB21-1311 reduces tax credits for people who make at least $400,000 by capping deductions at $30,000 for individuals and $60,000 for joint filers. The resulting state money will be used to expand the Earned Income Tax Credit and fund the Colorado Child Tax Credit.
HB21-1312 will remove tax breaks for certain industries, including large insurance companies (estimated $80 million a year); coal, oil and gas industries ($25 million a year); and large retailers that generate at least $1 million a month in sales ($17 million a year).
The new law also requires companies to have a minimum amount of their total domestic workforce located in the state to get certain tax credits. And, as a means of helping small businesses, lawmakers increased the business personal property tax exemption to $50,000.
“Taking these measures as a whole, and across 1311 and 1312, means that that we’re going to reduce the regressive nature of our tax code,” said bill sponsor Democratic Sen. Chris Hansen of Denver. “And I think most importantly, we’ve targeted the tax relief to the people who need it most — working families, small businesses, ITIN filers (taxpayers who aren’t eligible to have social security numbers and have an Individual Taxpayer Identification Number) who have been completely left out of the federal assistance.”
The third bill Polis signed had Democratic support, with only a few Republicans on board. Sponsors were clear that it is meant to thwart a conservative-backed possible ballot measure, Initiative 27, that would cut property taxes by $1 billion.
SB21-293 will reduce property taxes by $200 million for two years, and expands the tax code from two classifications of commercial and personal property taxes to six classifications. That means the tax categories that Initiative 27 uses would be outdated by the November election.
The sponsors and other Democrats told The Post during the legislative session that Initiative 27 would cut into the budgets of rural districts, schools, fire departments and other special districts.
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