Tax Expenditure Adjustment

The act adjusts several state tax expenditures as follows:

• Section 2 of the act allows an individual to present a copy of their federal tax return to be exempted from the medical marijuana registry application fee;
• Section 3 requires insurance companies, when submitting certain filings with the division of insurance, to submit the total annual dollar amount of premiums collected or contracted for on policies or contracts of insurance covering property or risks in Colorado during the previous calendar year from entities that are exempt from taxation;
• Section 4 ensures that the valuation for assessment for qualified-senior primary residence real property is reduced for the property tax years commencing on January 1, 2025, and January 1, 2026;
• Section 6 adds the amount of any overtime compensation excluded or deducted from a taxpayer's federal gross income to that taxpayer's federal taxable income for purposes of determining the taxpayer's state taxable income;
• Section 7 expands the definition of local government to include counties for purposes of the alternative transportation options tax credit;
• Section 8 modifies the tax credit for qualified costs incurred in preservation of historic structures by removing the 5% increase in the percentage of rehabilitation expenses incurred in a rehabilitation in a disaster area for the rehabilitation of a commercial structure that are applicable for the tax credit;
• Section 9 extends the tax credit for monetary contributions to promote child care, so that the tax credit is available through income tax years commencing before January 1, 2030, rather than January 1, 2026;
• Section 10 limits the existing business personal property tax credit so that a taxpayer may only claim the tax deduction for income tax years commencing before January 1, 2026;
• Section 12 clarifies and modifies definitions for the qualified care worker tax credit;
• Section 13 allows the executive director of the department of revenue to direct employers who make payments of compensation other than wages to withhold an amount that approximates an employee's income tax due to the state from that employee's compensation;
• Section 14 expands the definition of agricultural commodities to include products regulated under article 10 of title 44 for purposes of the pesticides, fertilizers, and spray adjuvants wholesale sales tax exemption;
• Section 15 ensures that, beginning July 1, 2025, interstate telephone and telegraph services are subject to state sales tax;
• Section 16 exempts the sale of medical marijuana to an individual who presents a valid electronic benefits transfer card or certain other identification from sales tax; and
• Section 17 modifies the enterprise zone tax credit for income tax years beginning January 1, 2026, by limiting the total amount of the credit that may be claimed to $2 million, providing an exemption process for that limit, and prohibiting certain taxpayers from claiming that credit.
  (Note: This summary applies to this bill as enacted.)