Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 22-0162.01 Ed DeCecco x4216
HOUSE BILL 22-1025
House Committees Senate Committees
Finance
A BILL FOR AN ACT
C
ONCERNING THE REPEAL OF INFREQUENTLY USED TAX101
EXPENDITURES.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/
.)
Legislative Oversight Committee Concerning Tax Policy. The
bill repeals the following tax expenditures:
! The exemption from the insurance premium tax for
educational and scientific institution life insurance (section
1 of the bill);
! The alternative minimum income tax based on annual gross
HOUSE SPONSORSHIP
Benavidez,
SENATE SPONSORSHIP
Kolker, Hansen
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. receipts from sales in or into the state (sections 2 and 4);
! The income tax credit for investment in technologies for
recycling plastics (section 3);
! The income tax credit for crop or livestock contributions to
a charitable organization (section 4);
! The income tax deduction for income or gain for a C
corporation that was taxed prior to 1965, to the extent it is
included in current taxable income (section 5);
! Income tax credits for qualifying investments (sections 6
and 7);
! The sales and use tax exemption for the transfer of
complimentary promotional materials to an out-of-state
vendee (section 8);
! The requirement that a portion of a state-employed
chaplain's salary is designated as a rental allowance
(section 9); and
! The excise tax exemption for sacramental wines sold and
used for religious purposes (section 12). This section also
specifies that a religious organization that distributes
sacramental wines for religious purposes is not subject to
licensing and other regulatory requirements.
Sections 10 and 11 make conforming amendments.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 10-3-910, repeal (3)2
as follows:3
10-3-910. Application of this part 9. (3) This part 9 shall not
4
apply to any life insurance company organized and operated, without5
profit to any private shareholder or individual, exclusively for the purpose6
of aiding educational or scientific institutions organized and operated7
without profit to any private shareholder or individual by issuing8
insurance and annuity contracts directly from the home office of the9
company and without agents or representatives in this state only to or for10
the benefit of such institutions and to individuals engaged in the services11
of such institutions, nor to any policy or contract which it issues; but this12
exemption is conditioned upon any such company complying with the13
HB22-1025-2- following requirements:1
(a) Payment of an annual registration fee of five thousand dollars;2
except that the commissioner by rule or as otherwise provided by law may3
reduce the amount of the fee if necessary pursuant to section 24-75-4024
(3), C.R.S., to reduce the uncommitted reserves of the fund to which all5
or any portion of the fee is credited. After the uncommitted reserves of6
the fund are sufficiently reduced, the commissioner by rule or as7
otherwise provided by law may increase the amount of the fee as provided8
in section 24-75-402 (4), C.R.S.9
(b) Filing a copy of any policy or contract issued to Colorado10
residents with the commissioner;11
(c) Filing a copy of its annual statement prepared pursuant to the12
laws of its state of domicile, as well as such other financial material as13
may be requested with the commissioner; and14
(d) Providing, in such form as may be acceptable to the15
commissioner, for the appointment of the commissioner as its true and16
lawful attorney upon whom may be served all lawful process in any17
action or proceeding against such company arising out of any policy or18
contract it has issued to, or which is currently held by, a Colorado citizen,19
and process so served against such company shall have the same force20
and validity as if served upon the company.21
SECTION 2. In Colorado Revised Statutes, 39-22-104, amend22
(5) as follows:23
39-22-104. Income tax imposed on individuals, estates, and24
trusts - single rate - report - legislative declaration - definitions -25
repeal. (5) (a) F
OR INCOME TAX YEARS COMMENCING PRIOR TO JANUARY26
1,
2023, any person who is required by the terms of this article
ARTICLE27
HB22-1025
-3- 22 to file a return whose only activities in Colorado consist of making1
sales, who does not own or rent real estate within the state of Colorado,2
and whose annual gross sales in or into this state amount to not more than3
one hundred thousand dollars may elect to pay a tax of one-half of one4
percent of his annual gross receipts derived from sales in or into Colorado5
in lieu of paying an income tax.6
(b) T
HIS SUBSECTION (5) IS REPEALED, EFFECTIVE JULY 1, 2025.7
SECTION 3. In Colorado Revised Statutes, 39-22-114.5, amend8
(1); and add (4) as follows:9
39-22-114.5. Tax credit for investment in technologies for10
recycling plastics - repeal. (1) F
OR INCOME TAX YEARS COMMENCING11
PRIOR TO JANUARY 1, 2023, there shall be allowed to each resident12
individual, as a credit against the income taxes imposed by this article
13
ARTICLE 22, a plastic recycling credit equal to twenty percent of net14
expenditures to third parties for rent, wages, supplies, consumable tools,15
equipment, test inventory, and utilities up to ten thousand dollars made by16
the taxpayer for new plastic recycling technology in Colorado, with a17
maximum credit of two thousand dollars. The tax credit allowed in this18
section shall be applicable only to income related to the expenditures19
described in this subsection (1).20
(4) T
HIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2029.21
SECTION 4. In Colorado Revised Statutes, 39-22-301, amend22
(2) and (3)(b); and add (3)(e) as follows:23
39-22-301. Corporate tax imposed. (2) (a) F
OR INCOME TAX24
YEARS COMMENCING PRIOR TO JANUARY 1, 2023, any corporation which25
is required by the terms of this article
ARTICLE 22 to file a return, and26
whose only activities in Colorado consist of making sales, and which does27
HB22-1025
-4- not own or rent real estate within the state of Colorado, and whose annual1
gross sales in or into this state amount to not more than one hundred2
thousand dollars may elect to pay a tax of one-half of one percent of its3
annual gross receipts derived from sales in or into Colorado in lieu of4
paying an income tax.5
(b) T
HIS SUBSECTION (2) IS REPEALED, EFFECTIVE JULY 1, 2025.6
(3) (b) F
OR INCOME TAX YEARS COMMENCING PRIOR TO JANUARY7
1,
2023, there shall be allowed to taxpayers, as a credit with respect to the8
income taxes imposed by this part 3, an amount equal to twenty-five9
percent of the wholesale market price or twenty-five percent of the most10
recent sale price of crop contributions or livestock contributions, or both,11
made to a tax-exempt charitable organization. Credit, as provided for in12
this subsection (3), may not exceed one thousand dollars per tax year.13
(e) T
HIS SUBSECTION (3) IS REPEALED, EFFECTIVE JULY 1, 2029.14
SECTION 5. In Colorado Revised Statutes, 39-22-304, amend15
(3)(e) as follows:16
39-22-304. Net income of corporation - legislative declaration17
- definitions - repeal. (3) There shall be subtracted from federal taxable18
income:19
(e) (I) F
OR AN INCOME TAX YEAR COMMENCING PRIOR TO JANUARY20
1,
2023, the amount necessary to prevent the taxation under this article
21
ARTICLE 22 of any annuity or other amount of income or gain which was22
properly included in income or gain and was taxed under the laws of this23
state, for a taxable year prior to January 1, 1965, to the taxpayer, or to a24
decedent by reason of whose death the taxpayer acquired the right to25
receive the income or gain, or to a trust or estate from which the taxpayer26
received the income or gain;27
HB22-1025
-5- (II) THIS SUBSECTION (3)(e) IS REPEALED, EFFECTIVE JULY 1, 2024.1
SECTION 6. In Colorado Revised Statutes, 39-22-507.5, amend2
(1) introductory portion; and add (13) as follows:3
39-22-507.5. Credits against tax - investment in certain4
property - repeal. (1) Except as otherwise provided in this section, there5
shall be allowed to any person as a credit against the tax imposed by this6
article ARTICLE 22, for income tax years commencing on or after January7
1, 1979,
BUT PRIOR TO JANUARY 1, 2023, an amount equal to the total of:8
(13) T
HIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2031. 9
SECTION 7. In Colorado Revised Statutes, 39-22-507.6, amend10
(1) introductory portion; and add (7) as follows:11
39-22-507.6. Credits against corporate tax - investment in12
certain property - repeal. (1) Except as otherwise provided in this13
section, there shall be allowed to any person as a credit against the tax14
imposed by part 3 of this article
ARTICLE 22, for income tax years15
commencing on or after January 1, 1988,
BUT PRIOR TO JANUARY 1, 2023,16
an amount equal to the total of:17
(7) T
HIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2027.18
SECTION 8. In Colorado Revised Statutes, 39-26-713, amend19
(1) introductory portion and (2)(h); and repeal (1)(b) and (2)(i) as20
follows:21
39-26-713. Tangible personal property. (1) The following shall22
be exempt from taxation under the provisions of part 1 of this article
23
ARTICLE 22:24
(b) The transfer of tangible personal property without25
consideration, other than the purchase, sale, or promotion of the26
transferor's product, to an out-of-state vendee for use outside of this state27
HB22-1025
-6- in selling products normally sold at wholesale by the transferor;1
(2) The following are exempt from taxation under part 2 of this2
article 26:3
(h) The storage, use, or consumption of tangible personal property4
purchased by a resident of Colorado while outside the state in amounts of5
one hundred dollars or less;
AND6
(i) The storage, use, or consumption of tangible personal property
7
that is thereafter transferred to an out-of-state vendee without8
consideration, other than the purchase, sale, or promotion of the9
transferor's product, for use outside of this state in selling products10
normally sold at wholesale by the corporation or person storing, using, or11
consuming said property; and12
SECTION 9. In Colorado Revised Statutes, repeal 39-22-510 as13
follows:14
39-22-510. State-employed chaplains - designation of rental15
allowance. (1) In the case of a chaplain, "salary" means the amount of16
money or credit received as compensation for services rendered,17
exclusive of mileage, traveling allowances, and other sums received for18
actual and necessary expenses incurred in the performance of the state's19
business.20
(2) The state of Colorado, being a tax-exempt entity, designates21
a portion of the annual compensation of every chaplain who is employed22
full-time by this state, in the amount of four thousand two hundred23
dollars, as the payment of a rental allowance for the purpose of renting or24
providing a home for the chaplain and his family when such rent or home25
is not provided by the state.26
SECTION 10. In Colorado Revised Statutes, 39-22-517, amend27
HB22-1025
-7- (1) and (2) as follows:1
39-22-517. Tax credit for child care center investments.2
(1) With respect to taxable years commencing on or after January 1,3
1992, there shall be allowed to any person operating a child care center,4
family child care home, or foster care home licensed pursuant to the5
provisions of section 26-6-104, C.R.S., a credit against the tax imposed6
by this article ARTICLE 22 in the amount of twenty percent of the7
taxpayer's annual investment in tangible personal property to be used in8
such child care center, family child care home, or foster care home. Such9
credit shall be in addition to any credit for which the taxpayer may be10
eligible pursuant to the provisions of section 39-22-507.5 or section11
39-22-507.6.12
(2) With respect to taxable years commencing on or after July 1,13
1992, there shall be allowed to any sole proprietorship, partnership,14
limited liability corporation, subchapter S corporation, or regular15
corporation which provides child care facilities which are incidental to16
their business and are licensed pursuant to section 26-6-104, C.R.S., for17
the use of its employees a credit against the tax imposed by this article18
ARTICLE 22 in the amount of ten percent of the taxpayer's annual19
investment in tangible personal property to be used in such child care20
facilities. Such credit shall be in addition to any credit for which the21
taxpayer may be eligible pursuant to the provisions of section22
39-22-507.5 or section 39-22-507.6.23
SECTION 11. In Colorado Revised Statutes, 39-30-104, amend24
(1)(a); and repeal (2)(a) as follows:25
39-30-104. Credit against tax - investment in certain property26
- definitions. (1) (a) In lieu of any credit allowable under section27
HB22-1025
-8- 39-22-507.5, There shall be allowed to any person as a credit against the1
tax imposed by article 22 of this title TITLE 39, for income tax years2
commencing on or after January 1, 1986, an amount equal to the total of3
three percent of the total qualified investment, as determined under4
section 46 (c)(2) of the federal "Internal Revenue Code of 1986", as5
amended, in such taxable year in qualified property as defined in section6
48 of the internal revenue code to the extent that such investment is in7
property that is used solely and exclusively in an enterprise zone for at8
least one year. The references in this subsection (1) to sections 46 (c)(2)9
and 48 of the internal revenue code mean sections 46 (c)(2) and 48 of the10
internal revenue code as they existed immediately prior to the enactment11
of the federal "Revenue Reconciliation Act of 1990".12
(2) (a) For income tax years commencing prior to January 1, 2014,13
the amount of the credit set forth in subsection (1) of this section shall be14
subject to the limitations of section 39-22-507.5; except that, in15
computing the limitations on credit pursuant to section 39-22-507.5 (3),16
a taxpayer's actual tax liability for the income tax year shall not be17
reduced by the amount of credits allowed by section 39-30-105.1 and the18
limit on that portion of a taxpayer's tax liability that exceeds five thousand19
dollars shall be fifty percent.20
SECTION 12. In Colorado Revised Statutes, 44-3-106, amend21
(1) as follows:22
44-3-106. Exemptions. (1) (a) The provisions of this article 323
shall not apply to the sale or distribution of sacramental wines sold and24
used for religious purposes. EXCEPT AS PROVIDED IN SUBSECTION (1)(b)25
OF THIS SECTION, THE REQUIREMENTS SET FORTH IN THIS ARTICLE 3 DO26
NOT APPLY TO ANY RELIGIOUS ORGANIZATION THAT DISTRIBUTES27
HB22-1025
-9- SACRAMENTAL WINES FOR RELIGIOUS PURPOSES .1
(b) T
HE SALE OR DISTRIBUTION OF SACRAMENTAL WINES USED FOR2
RELIGIOUS PURPOSES IS SUBJECT TO THE EXCISE TAX AS SPECIFIED IN3
SECTION 44-3-503.4
SECTION 13. Act subject to petition - effective date.5
(1) Except as set forth in subsection (2) of this section, this act takes6
effect at 12:01 a.m. on the day following the expiration of the ninety-day7
period after final adjournment of the general assembly; except that, if a8
referendum petition is filed pursuant to section 1 (3) of article V of the9
state constitution against this act or an item, section, or part of this act10
within such period, then the act, item, section, or part will not take effect11
unless approved by the people at the general election to be held in12
November 2022 and, in such case, will take effect on the date of the13
official declaration of the vote thereon by the governor.14
(2) Sections 8, 10, and 11 of this act take effect January 1, 2023.15
HB22-1025
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