HB 22-1166

HB 22-1166, titled "Incentives Promote Colorado Timber Industry," aims to support the growth of Colorado's timber industry by offering financial incentives for hiring interns and reducing tax burdens on wood products. The bill creates a program that reimburses timber businesses up to 50% of costs related to hiring interns, helping them develop their workforce. Additionally, it extends sales tax exemptions for various wood products until 2026 and allows timber companies to claim a state income tax credit for purchasing equipment used in wood production. Since the bill has been signed into law, these incentives are now active, benefiting timber businesses across Colorado by reducing costs and encouraging investment in workforce development and modernization.

Official Summary

Section 1 of the bill creates the timber industry workforce development program (internship program) in the Colorado state forest service (forest service) to provide incentives to timber businesses to hire interns through partial reimbursement of the costs to such businesses of hiring interns. Not later than January 1, 2023, the forest service is required to promulgate policies, procedures, and guidelines for administering the internship program. The bill specifies minimum components of the policies, procedures, and guidelines. Subject to available appropriations, the forest service may reimburse a qualified timber business an amount not to exceed 50% of the actual cost to the business to employ the intern. The actual cost includes the wages paid to the intern, a reasonable allocation of fixed overhead expenses, and all incidental costs directly related to the internship. Based on the annual appropriation for the internship program, the forest service shall determine how many internships may be approved, the amount of reimbursement per internship, and whether a timber business may be reimbursed for more than one intern in the same fiscal year. However, no timber business may be reimbursed for more than 3 internships in the same fiscal year. Under current law, for fiscal years commencing on or after July 1, 2008, but prior to the fiscal year commencing on July 1, 2020, and for fiscal years commencing on or after July 1, 2021, but prior to the fiscal year commencing on July 1, 2026, all sales, storage, and use of wood from salvaged trees in Colorado that were killed or infested by mountain pine beetles or spruce beetles, including but not limited to products such as lumber, furniture built from the salvaged trees, and wood chips or wood pellets generated from the salvaged trees, are exempt from the state sales and use tax. For fiscal years commencing on or after July 1, 2022, but prior to the fiscal year commencing on July 1, 2026, section 2 extends this exemption to include all sales, storage, and use of wood harvested in Colorado that is sold on a retail basis, including but not limited to products such as lumber, furniture built from such wood, wood chips or wood pellets generated from such wood, and wood from salvaged trees in Colorado that were killed or infested by mountain pine beetles or spruce beetles. For income tax years commencing on or after January 1, 2021, but prior to January 1, 2027, section 3 allows a timber business doing business in Colorado to claim a credit against the state income tax for 20% of the costs incurred by the taxpayer in purchasing mechanized equipment, certain vehicles, and equipment infrastructure used in the production of wood products, not to exceed $10,000 for the aggregate of all such qualifying items purchased in any one income tax year. The bill specifies additional requirements concerning the administration of the tax credit.(Note: This summary applies to this bill as introduced.)

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