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Legislative Year: 2021 Change
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Bill Detail: HB21-1311

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Title Income Tax
Status Governor Signed (06/23/2021)
Bill Subjects
  • Fiscal Policy & Taxes
House Sponsors M. Weissman (D)
E. Sirota (D)
Senate Sponsors D. Moreno (D)
C. Hansen (D)
House Committee Finance
Senate Committee Finance
Date Introduced 05/10/2021
Summary

Section 2 of the bill modifies how taxable income is determined
for individuals for purposes of the state income tax. Specifically, it:
  • Imposes a cap for taxpayers with adjusted gross incomes
equal to or exceeding $400,000 on certain itemized
deductions claimed under the internal revenue code;
  • Repeals, for social security income that is included in
federal taxable income only, the cap on the deduction for
pension and annuity income received;
  • Adds a cap, per taxpayer per beneficiary, on the deduction
for contributions made to 529 plans;
  • Requires individual taxpayers to add amounts of federal
taxable income that are equal to the enhanced federal
deductions for food and beverage in a restaurant for the
2022 income year; and
  • Extends the limit on the federal deduction allowed under
section 199A of the internal revenue code.
Section 3 increases the earned income tax credit to 20% for
income tax years commencing on or after January 1, 2022, and applies the
lowered minimum age for individuals without a qualifying child in the
federal American Rescue Plan Act of 2021 to the state credit for income
tax years commencing on or after January 1, 2022.
Section 4 funds the child tax credit for income tax years
commencing on or after January 1, 2022, and allows a child tax credit in
the state regardless of the federal requirement that a qualifying child must
have a social security number for the federal child tax credit. Section 4
also specifies that if the changes to the federal child tax credit in the
American Rescue Plan Act of 2021 are no longer in effect, the
percentages of the state child tax credit are increased.
Sections 5 through 7 make the state's corporate income tax more
uniform compared to other states by replacing the current combined
reporting standard with the multistate tax commission's standard. In
addition, these sections modify the computation of the receipts factor to
make it more congruent with the unitary business principle.
In addition to making the state's corporate income tax more
uniform compared to other states, section 6 also prevents corporations
from using tax shelters in foreign jurisdictions for the purpose of tax
avoidance.
Section 7 also modifies how taxable income is determined for C
corporations for purposes of the state income tax. Specifically, it requires
corporate taxpayers to add amounts of federal taxable income that are
equal to the enhanced federal deductions for food and beverage in a
restaurant for the 2022 income year.
Section 8 repeals a state subtraction for certain capital gains
incurred.
Section 9 creates a temporary income tax credit for a business for
a percentage of the conversion costs to convert the business to a
worker-owned coop, an employee stock ownership plan, or an employee
ownership trust.
Sections 10 through 13 address the avoidance of income tax by
certain captive insurance companies.

Committee Reports
with Amendments
Full Text
Full Text of Bill (pdf) (most recent)
Fiscal Notes Fiscal Notes (05/26/2021) (most recent)  
Additional Bill Documents Bill Documents
Including:
  • Past bill versions
  • Past fiscal notes
  • Committee activity and documents
  • Bill History
 
Lobbyists Lobbyists
Audio [This feature is available by subscription.]  
Votes House and Senate Votes
Vote Totals Vote Totals by Party
 
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