Standard Deduction Adjustment
For the purposes of determining state taxable income and calculating state income tax for taxpayers who claim the standard deduction allowed under section 63 (c) of the internal revenue code, the bill subtracts an amount from the taxpayer's federal taxable income equal to the standard deduction claimed by the taxpayer not adjusted pursuant to section 63 (c)(4) or (c)(7)(B)(ii) of the internal revenue code multiplied by the combination of:
- The percentage change in the United States department of labor's bureau of labor statistics consumer price index for Denver-Aurora-Lakewood for all items paid by all urban consumers, or its applicable predecessor or successor index, (CPI) in the most recent year compared to 2017; and
- Twenty thousandths of a percent for every percent that the United States department of labor's bureau of labor statistics motor fuel index, or its applicable predecessor or successor index, exceeds the increase in CPI since 2017.
The subtraction is only allowed for income tax years commencing on or after January 1, 2023.
(Note: This summary applies to this bill as introduced.)