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Legislative Year: 2021 Change
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Bill Detail: HB21-1327

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Title State And Local Tax Parity Act For Businesses
Status Sent to the Governor (06/22/2021)
Bill Subjects
  • Business & Economic Development
  • Fiscal Policy & Taxes
House Sponsors K. Van Winkle (R)
D. Ortiz (D)
Senate Sponsors R. Woodward (R)
C. Kolker (D)
House Committee Finance
Senate Committee State, Veterans and Military Affairs
Date Introduced 06/01/2021
Summary

The 2017 federal Tax Cuts and Jobs Act placed a cap of $10,000
on the amount of state and local taxes paid that an individual can deduct
on their federal taxes. This limitation did not apply to C corporations.
Consequently, businesses organized as pass-through entities like S
corporations and partnerships pay increased taxes on business profits
compared to C corporations because pass-through entities pay taxes on

business profits at the individual (partner or shareholder) level.
For income tax years commencing on or after January 1, 2022, the
bill allows pass-through entities to elect to pay their state income tax at
the entity level so that the pass-through entity can claim an unlimited
deduction at the federal level of state and local taxes paid.
While this reduces federal taxable income for the pass-through
entity, it does not reduce Colorado taxable income because, under current
law, the individual and the partnership are required to add back any state
and local taxes deducted at the federal level.

Committee Reports
with Amendments
Full Text
Full Text of Bill (pdf) (most recent)
Fiscal Notes Fiscal Notes (06/03/2021) (most recent)  
Additional Bill Documents Bill Documents
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  • Past fiscal notes
  • Committee activity and documents
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