Colorado 2025 Regular Session

Colorado Senate Bill SB026 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	First Regular Session
2	2	Seventy-fifth General Assembly
3	3	STATE OF COLORADO
4	4	INTRODUCED
5	5
6	6
7	7	LLS NO. 25-0215.01 Jed Franklin x5484
8	8	SENATE BILL 25-026
9	9	Senate Committees House Committees
10	10	Finance
11	11	A BILL FOR AN ACT
12	12	C
13	13	ONCERNING THE ADJUSTMENT OF CERTAIN TAX EXPENDITURES .101
14	14	Bill Summary
15	15	(Note: This summary applies to this bill as introduced and does
16	16	not reflect any amendments that may be subsequently adopted. If this bill
17	17	passes third reading in the house of introduction, a bill summary that
18	18	applies to the reengrossed version of this bill will be available at
19	19	http://leg.colorado.gov/
20	20	.)
21	21	Legislative Oversight Committee Concerning Tax Policy. The
22	22	bill adjusts several tax expenditures as follows:
23	23	! Section 1 of the bill disallows the income tax credit for
24	24	unsalable alcohol after December 31, 2025, and repeals the
25	25	credit on December 31, 2030;
26	26	! Currently, a taxpayer is allowed to deduct up to 2% of the
27	27	taxable gallons of fuel removed from a fuel terminal to
28	28	account for fuel that is lost in transit. Section 2 changes the
29	29	SENATE SPONSORSHIP
30	30	Mullica, Frizell, Weissman
31	31	HOUSE SPONSORSHIP
32	32	Marshall and Joseph,
33	33	Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
34	34	Capital letters or bold & italic numbers indicate new material to be added to existing law.
35	35	Dashes through the words or numbers indicate deletions from existing law. allowance to 1% starting January 1, 2026.
36	36	! Currently, for income tax years commencing before
37	37	January 1, 2025, a purchaser who installs an energy storage
38	38	system in a residential dwelling may claim an income tax
39	39	credit in an amount equal to 10% of the purchase price paid
40	40	by the purchaser for the energy storage system. Section 3
41	41	extends the credit to include subsequent income tax years
42	42	commencing before January 1, 2027, and extends the
43	43	repeal of the credit from January 1, 2028, to January 1,
44	44	2030.
45	45	! Currently, the reducing emissions from lawn equipment
46	46	income tax credit is available until the tax year beginning
47	47	January 1, 2027, and the department of revenue is required
48	48	to issue a report on the credit for each income tax year from
49	49	January 1, 2025, through January 1, 2028. Section 4
50	50	extends the credit until the tax year beginning January 1,
51	51	2029, extends the reporting requirement through January 1,
52	52	2030, and extends the repeal date of the credit from
53	53	December 31, 2033, to December 31, 2035.
54	54	! By amending a definition of "agricultural compounds" that
55	55	is incorporated into the definition of "wholesale sale" used
56	56	for purposes of the sales and use tax statutes, section 5
57	57	exempts from sales and use tax soil conditioners, plant
58	58	amendments, plant growth regulators, mulches, compost,
59	59	soil used for aboveground production of agricultural
60	60	commodities, manure, fish for non-stocking purposes, fish
61	61	embryos, and fish eggs beginning January 1, 2026;
62	62	! Section 6 states that the purpose of the insolvency
63	63	assessments paid insurance premium tax credit is to offset
64	64	the cost for an insurer paying required assessments into the
65	65	life and health insurance protection association and that the
66	66	credit's effectiveness is measured by how many eligible
67	67	insurers claim the credit and the amount claimed relative to
68	68	payments into the life and health insurance protection
69	69	association;
70	70	! Sections 7 and 8 state that the purpose of the state refund
71	71	income tax deduction is to avoid re-taxing a taxpayer's state
72	72	income tax refund when a state refund is required to be
73	73	included as income on the taxpayer's federal return
74	74	pursuant to the internal revenue code and that the
75	75	effectiveness of the deduction is measured by the number
76	76	of taxpayers claiming the deduction and the total amount of
77	77	state refunds claimed as deductions from Colorado taxable
78	78	income;
79	79	! Section 9 states that the purpose of the dyed special fuels
80	80	SB25-026
81	81	-2- and off-road fuel tax excise tax exemption is to entirely
82	82	exclude dyed diesel or kerosene from the special fuels
83	83	excise tax where the dyed fuel is used for specified
84	84	off-road purposes or by governmental entities and that the
85	85	effectiveness of the exemption is measured by the number
86	86	of taxpayers claiming the exemption and the amount of tax
87	87	that would have been paid without the exemption;
88	88	! Section 10 states that the purpose of the off-road fuel use
89	89	refund is to compensate taxpayers who buy and pay the tax
90	90	on otherwise taxable fuels for the purpose of using the
91	91	fuels for specified non-taxable purposes under federal law
92	92	and that the effectiveness of the refund is measured by the
93	93	number of taxpayers claiming a refund and the amount of
94	94	tax that was already collected and is refunded; and
95	95	! Section 11 states that the purpose of the wholesale sales
96	96	exemption from sales tax is to ensure that sales tax is levied
97	97	and collected only on a final end sale to a retail consumer
98	98	and not on wholesale sales and that the effectiveness of the
99	99	wholesale exemption from sales tax is measured by the
100	100	number of taxpayers claiming the wholesale exemption
101	101	from tax and the amount of tax liability not paid.
102	102	Be it enacted by the General Assembly of the State of Colorado:1
103	103	SECTION 1. In Colorado Revised Statutes, 44-3-503, amend (9)2
104	104	as follows:3
105	105	44-3-503. Excise tax - records - rules - definition - repeal.4
106	106	(9) (a) The department shall make a refund or allow a credit to the5
107	107	manufacturer, the wholesaler, or the holder of a winery direct shipper's6
108	108	permit, as the case may be, of the amount of the excise tax paid on7
109	109	alcohol beverages sold in this state when, after payment of the excise tax,8
110	110	the alcohol beverages are rendered unsalable by reason of destruction or9
111	111	damage upon submission of evidence satisfactory to the state licensing10
112	112	authority that the excise tax has actually been paid. Such refund or credit11
113	113	shall be made by the department within sixty days after the submission of12
114	114	evidence satisfactory to the department. N
115	115	O REFUND OR CREDIT IS13
116	116	SB25-026-3- ALLOWED AFTER DECEMBER 31, 2025.1
117	117	(b) T
118	118	HIS SUBSECTION (9) IS REPEALED, EFFECTIVE DECEMBER 31,2
119	119	2030.3
120	120	SECTION 2. In Colorado Revised Statutes, 39-27-102, amend4
121	121	(1)(b)(I) as follows:5
122	122	39-27-102. Tax imposed on gasoline and special fuel - deposits6
123	123	- penalties. (1) (b) (I) In the case of gasoline or special fuel removed7
124	124	from a terminal, the tax is imposed upon the person first receiving the8
125	125	gasoline or special fuel at the terminal even if such person is also the9
126	126	supplier. In the case of gasoline or special fuel removed from a terminal10
127	127	by a common carrier, the consignor who owns the gasoline or special fuel11
128	128	removed by the common carrier is deemed to be the remover and first12
129	129	recipient thereof. The amount of gasoline or special fuel removed is13
130	130	deemed to be the amount shipped from the terminal, measured in gallons,14
131	131	as shown by the terminal manifest; except that,
132	132	FOR TAX YEARS15
133	133	COMMENCING BEFORE JANUARY 1, 2026, an allowance of two percent of16
134	134	the total amount of gasoline or special fuel acquired during any calendar17
135	135	month,
136	136	AND, FOR TAX YEARS COMMENCING ON OR AFTER JANUARY 1,18
137	137	2026,
138	138	AN ALLOWANCE OF ONE PERCENT OF THE TOTAL AMOUNT OF19
139	139	GASOLINE OR SPECIAL FUEL ACQUIRED DURING ANY CALENDAR MONTH , as20
140	140	shown by terminal manifests, is deducted by the licensed distributor to21
141	141	cover losses in transit and in unloading the gasoline or special fuel but22
142	142	there is no allowance for liquefied petroleum gas or removal by bulk23
143	143	transfer. The two percent
144	144	allowance provided under this subsection24
145	145	(1)(b)(I) is allowed whether the terminal is within or without this state.25
146	146	SECTION 3. In Colorado Revised Statutes, 39-22-546, amend26
147	147	(3)(a) and (7) as follows:27
148	148	SB25-026
149	149	-4- 39-22-546. Credit against tax - residential energy storage1
150	150	systems - tax preference performance statement - legislative2
151	151	declaration - definition - repeal. (3) (a) For income tax years3
152	152	commencing on or after January 1, 2023, but before January 1, 20254
153	153	J
154	154	ANUARY 1, 2027, any purchaser that installs an energy storage system in5
155	155	a residential dwelling in this state is allowed a credit against the tax6
156	156	imposed by this article 22 in an amount equal to ten percent of the7
157	157	purchase price paid by the purchaser for the energy storage system. 8
158	158	(7) This section is repealed, effective January 1, 2028
159	159	JANUARY9
160	160	1, 2030.10
161	161	SECTION 4. In Colorado Revised Statutes, 39-22-550, amend11
162	162	(3)(a), (5), and (6) as follows:12
163	163	39-22-550. Tax credit for reducing emissions from certain13
164	164	lawn equipment - tax preference performance statement - legislative14
165	165	declaration - definitions - report - repeal. (3) (a) For income tax years15
166	166	commencing on or after January 1, 2024, but before January 1, 202716
167	167	J
168	168	ANUARY 1, 2029, a retailer qualified pursuant to subsection (3)(e)(II) of17
169	169	this section is allowed a tax credit against the tax imposed pursuant to this18
170	170	article 22 in an amount equal to thirty-three percent of the aggregate19
171	171	purchase price for all retail sales of new, electric-powered lawn20
172	172	equipment that the qualified retailer sold in the state during the tax year. 21
173	173	(5) Pursuant to section 39-21-304 (3), notwithstanding section22
174	174	24-1-136 (11)(a)(I), and for the purpose of providing data that allows the23
175	175	general assembly and the state auditor to measure the effectiveness of the24
176	176	tax credit created in subsection (3) of this section, the department of25
177	177	revenue, on or before January 1, 2025, and on or before January 1 of each26
178	178	year thereafter through January 1, 2028
179	179	JANUARY 1, 2030, shall submit to27
180	180	SB25-026
181	181	-5- the general assembly and the state auditor a report detailing the sales of1
182	182	new, electric-powered lawn equipment, as reported by a qualified retailer2
183	183	claiming the tax credit authorized under subsection (3) of this section.3
184	184	The tax credit established in this section meets its purpose if sales of new,4
185	185	gasoline-powered lawn equipment are significantly reduced within five5
186	186	years after the tax credit becomes effective, as determined by the general6
187	187	assembly and the state auditor pursuant to section 39-21-304 (3). 7
188	188	(6) This section is repealed, effective December 31, 20338
189	189	D
190	190	ECEMBER 31, 2035.9
191	191	SECTION 5. In Colorado Revised Statutes, 39-26-102, amend10
192	192	(19)(c)(II) introductory portion and (19)(c)(II)(C); and add (19)(c)(II)(D)11
193	193	as follows:12
194	194	39-26-102. Definitions. As used in this article 26, unless the13
195	195	context otherwise requires:14
196	196	(19) (c) (II) For purposes of this paragraph (c)
197	197	SUBSECTION15
198	198	(19)(c), "agricultural compounds" means:16
199	199	(C) Animal pharmaceuticals that have been approved by the food17
200	200	and drug administration;
201	201	OR18
202	202	(D) F
203	203	OR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY19
204	204	1,
205	205	2026, SOIL CONDITIONERS, PLANT AMENDMENTS , PLANT GROWTH20
206	206	REGULATORS, MULCHES, COMPOST, SOIL USED FOR ABOVEGROUND21
207	207	PRODUCTION OF AGRICULTURAL COMMODITIES , MANURE, FISH FOR22
208	208	NON-STOCKING PURPOSES, FISH EMBRYOS, AND FISH EGGS.23
209	209	SECTION 6. In Colorado Revised Statutes, 10-20-113, add (3)24
210	210	as follows:25
211	211	10-20-113. Credits for assessments paid - tax offsets.26
212	212	(3) (a) T
213	213	HE PURPOSE OF THE CREDIT AUTHORIZED IN SUBSECTION (1)(a)27
214	214	SB25-026
215	215	-6- OF THIS SECTION IS TO OFFSET THE COST FOR AN INSURER PAYING1
216	216	REQUIRED ASSESSMENTS INTO THE LIFE AND HEALTH INSURANCE2
217	217	PROTECTION ASSOCIATION CREATED IN SECTION 10-20-106 (1).3
218	218	(b) T
219	219	HE EFFECTIVENESS OF THE CREDIT AUTHORIZED IN4
220	220	SUBSECTION (1)(a) OF THIS SECTION IS MEASURED BY HOW MANY ELIGIBLE5
221	221	INSURERS CLAIM THE CREDIT AND THE AM OUNT CLAIMED RELATIVE TO6
222	222	PAYMENTS INTO THE LIFE AND HEALTH INSURANCE PROTECTION7
223	223	ASSOCIATION CREATED IN SECTION 10-20-106 (1).8
224	224	SECTION 7. In Colorado Revised Statutes, 39-22-104, amend9
225	225	(4)(e) as follows:10
226	226	39-22-104. Income tax imposed on individuals, estates, and11
227	227	trusts - single rate - report - tax preference performance statement12
228	228	- legislative declaration - definitions - repeal. (4) There shall be13
229	229	subtracted from federal taxable income: 14
230	230	(e) (I) The amount of any refund or credit for overpayment of15
231	231	income taxes imposed by this state or any other taxing jurisdiction to the16
232	232	extent included in gross income for federal income tax purposes but not17
233	233	previously allowed as a deduction for Colorado income tax purposes; 18
234	234	(II) T
235	235	HE PURPOSE OF THE DEDUCTION AUTHORIZED IN THIS19
236	236	SUBSECTION (4)(e) IS TO AVOID RE-TAXING A TAXPAYER'S STATE INCOME20
237	237	TAX REFUND WHEN A STATE REF UND IS REQUIRED TO BE INCLUDED AS21
238	238	INCOME ON THE TAXPAYER 'S FEDERAL RETURN PURSUANT TO THE22
239	239	INTERNAL REVENUE CODE;23
240	240	(III) T
241	241	HE EFFECTIVENESS OF THE DEDUCTION AUTHORIZED IN THIS24
242	242	SUBSECTION (4)(e) IS MEASURED BY THE NUMBER OF TAXPAYERS25
243	243	CLAIMING THE DEDUCTION AND THE TOTAL AMOUNT OF STATE REFUNDS26
244	244	CLAIMED AS DEDUCTIONS FROM COLORADO TAXABLE INCOME ;27
245	245	SB25-026
246	246	-7- SECTION 8. In Colorado Revised Statutes, 39-22-304, amend1
247	247	(3)(f) as follows:2
248	248	39-22-304. Net income of corporation - legislative declaration3
249	249	- definitions - repeal. (3) There shall be subtracted from federal taxable4
250	250	income:5
251	251	(f) (I) The amount of any refund or credit for overpayment of6
252	252	income taxes imposed by this state to the extent included in federal7
253	253	taxable income;8
254	254	(II) T
255	255	HE PURPOSE OF THE DEDUCTION AUTHORIZED IN THIS9
256	256	SUBSECTION (3)(f) IS TO AVOID RE-TAXING A TAXPAYER'S STATE INCOME10
257	257	TAX REFUND WHEN A STATE REF UND IS REQUIRED TO BE INCLUDED AS11
258	258	INCOME ON THE TAXPAYER 'S FEDERAL RETURN PURSUANT TO THE12
259	259	INTERNAL REVENUE CODE; AND13
260	260	(III) T
261	261	HE EFFECTIVENESS OF THE DEDUCTION AUTHORIZED IN THIS14
262	262	SUBSECTION (3)(f) IS MEASURED BY THE NUMBER OF TAXPAYERS15
263	263	CLAIMING THE DEDUCTION AND THE TOTAL AMOUNT OF STATE REFUNDS16
264	264	CLAIMED AS DEDUCTIONS FROM COLORADO TAXABLE INCOME ;17
265	265	SECTION 9. In Colorado Revised Statutes, 39-27-102.5, add18
266	266	(2.3) as follows:19
267	267	39-27-102.5. Exemptions on tax imposed - ex-tax purchases -20
268	268	performance statement - definition - repeal. (2.3) (a)
269	269	THE PURPOSE OF21
270	270	THE EXEMPTION AUTHORIZED IN SUBSECTIONS (1.5) AND (2)(a) OF THIS22
271	271	SECTION IS TO ENTIRELY EXCLUDE DYED DIESEL OR KEROSENE FROM THE23
272	272	SPECIAL FUELS EXCISE TAX WHERE THE DYED FUEL IS USED FOR SPECIFIED24
273	273	OFF-ROAD PURPOSES OR BY GOVERNMENTAL ENTITIES .25
274	274	(b) T
275	275	HE EFFECTIVENESS OF THE EXEMPTION AUTHORIZED IN26
276	276	SUBSECTIONS (1.5) AND (2)(a) OF THIS SECTION IS MEASURED BY THE27
277	277	SB25-026
278	278	-8- NUMBER OF TAXPAYERS CLAIMING THE EXEMPTION AND THE AMOUNT OF1
279	279	TAX THAT WOULD HAVE BEEN PAID WITHOUT THE EXEMPTION .2
280	280	SECTION 10. In Colorado Revised Statutes, 39-27-103, add (8)3
281	281	as follows:4
282	282	39-27-103. Refunds - penalties - checkoff - limits on collections5
283	283	- performance statement. (8) (a) T
284	284	HE PURPOSE OF THE REFUND6
285	285	AUTHORIZED IN SUBSECTIONS (2.7) AND (3) OF THIS SECTION IS TO7
286	286	COMPENSATE TAXPAYERS WHO BUY AND PAY THE TAX ON OTHERWISE8
287	287	TAXABLE FUELS FOR THE PURPOSE OF USING THE FUELS FOR SPECIFIED9
288	288	NON-TAXABLE PURPOSES UNDER FEDERAL LAW .10
289	289	(b) T
290	290	HE EFFECTIVENESS OF THE REFUND AUTHORIZED IN11
291	291	SUBSECTIONS (2.7) AND (3) OF THIS SECTION IS MEASURED BY THE NUMBER12
292	292	OF TAXPAYERS CLAIMING A REFUND AND THE AMOUNT OF TAX THAT WAS13
293	293	ALREADY COLLECTED AND IS REFUNDED .14
294	294	SECTION 11. In Colorado Revised Statutes, 39-26-102, amend15
295	295	(19)(a) as follows:16
296	296	39-26-102. Performance statement - definitions. As used in this17
297	297	article 26, unless the context otherwise requires:18
298	298	(19) (a) (I) "Wholesale sale" means a sale by wholesalers to retail19
299	299	merchants, jobbers, dealers, or other wholesalers for resale and does not20
300	300	include a sale by wholesalers to users or consumers not for resale, and the21
301	301	latter sales shall be deemed retail sales and subject to the provisions of22
302	302	this article
303	303	ARTICLE 26.23
304	304	(II) T
305	305	HE PURPOSE OF THE WHOLESALE SALE EXEMPTION FROM THE24
306	306	TAX LEVIED PURSUANT TO SECTION 39-26-104 (1)(a) IS TO ENSURE THAT25
307	307	SALES TAX IS LEVIED AND COLLECTED ONLY ON A FINAL END SALE TO A26
308	308	RETAIL CONSUMER AND NOT ON WHOLESALE SALES TO AVOID A SINGLE27
309	309	SB25-026
310	310	-9- PRODUCT BEING TAXED MULTIPLE TIMES BEFORE IT IS SOLD TO A1
311	311	CONSUMER.2
312	312	(III) T
313	313	HE EFFECTIVENESS OF THE WHOLESALE EXEMPTION FROM3
314	314	THE TAX LEVIED PURSUANT TO SECTION 39-26-104 (1)(a) IS MEASURED BY4
315	315	THE NUMBER OF TAXPAYERS CLAIMING THE WHOLESALE EXEMPTION FROM5
316	316	TAX AND THE AMOUNT OF TAX LIABILITY NOT PAID .6
317	317	SECTION 12. Act subject to petition - effective date. This act7
318	318	takes effect at 12:01 a.m. on the day following the expiration of the8
319	319	ninety-day period after final adjournment of the general assembly; except9
320	320	that, if a referendum petition is filed pursuant to section 1 (3) of article V10
321	321	of the state constitution against this act or an item, section, or part of this11
322	322	act within such period, then the act, item, section, or part will not take12
323	323	effect unless approved by the people at the general election to be held in13
324	324	November 2026 and, in such case, will take effect on the date of the14
325	325	official declaration of the vote thereon by the governor.15
326	326	SB25-026
327	327	-10-