HB 22-1125

House Bill 22-1125 makes permanent a reduction in Colorado's income tax rate by 0.05% every year when the state has excess revenues that need to be refunded according to TABOR rules. This applies to both individual and corporate income taxes, and it removes the requirement for a performance statement and repeal date for these reductions. Since the bill has been signed into law, this tax reduction will now take effect as planned, benefiting taxpayers by lowering their state income tax burden annually under certain conditions.

Official Summary

One of the mechanisms for refunding state revenues in excess of the state fiscal year spending limit imposed by the Taxpayer's Bill of Rights (TABOR) is a temporary income tax rate reduction. For any state fiscal year commencing on or after July 1, 2022, the bill makes this income tax rate reduction permanent and establishes the reduction as always equaling a .05% reduction of the current income tax rate. Thus, under the bill, every year when the executive director of the department of revenue determines it is necessary to reduce the state income tax, both the individual state income tax rate and the corporate tax rate are permanently reduced by .05%. The bill exempts the state income tax rate and corporate tax rate reduction in the bill from the otherwise required tax preference performance statement and repeal date. (Note: This summary applies to this bill as introduced.)