.png){kind=logo}
Congressional Republicans’ budget created a $1 billion deficit by allowing corporations to dodge nearly $1 billion in taxes owed to Colorado
DENVER, CO – The House Appropriations Committee today passed two bills that would close a special interest corporate tax loophole for insurance companies and allow corporations to pre-pay taxes at a small discount, after Republicans in Congress created a $1 billion hole in Colorado’s budget with massive corporate tax cuts.
HB25B-1004 allows businesses to pre-pay taxes at a discount for future years when Colorado is anticipated to collect more revenue than the state’s spending limit under TABOR, and HB25B-1003 would repeal a special tax break for insurance companies.
“Congressional Republicans passed a budget bill that created a billion-dollar revenue shortfall in Colorado in order to give tax breaks to the ultra-rich, and we’re doing everything we can to combat the destruction that the GOP budget will cause for hardworking Coloradans,” said Rep. Rebekah Stewart, D-Lakewood, sponsor of HB25B-1004. “This bill would allow companies to pre-pay future taxes to boost revenue now and save them money in the process. This is crucial to protect funding for core services that Coloradans depend on.”
“Our legislation utilizes a proven, business-friendly method to offset the draconian GOP budget bill,” said Rep. Sean Camacho, D-Denver, sponsor of HB25B-1004. “Colorado’s budget funds essential services that all Coloradans benefit from, like our K-12 public schools and transportation infrastructure, and the GOP budget blew a massive hole in it that we have to address now. It’s going to take an all-hands approach to safeguard our state from the impacts of Trump’s budget bill, and by allowing businesses to pay their future taxes now, they can save money and help us protect core services.”
HB25B-1004, which passed by a vote of 7-4, would allow a one-time auction of future tax credits, giving companies the opportunity to buy tax credits to pre-pay a portion of their future taxes at a small discount. This saves businesses money, allowing companies to pre-pay future taxes now and offsetting the immediate impacts of the GOP budget bill. This does shift state revenue out of future years, but after 2025-2026 the state budget is forecasted to be limited by the TABOR cap, not the amount of revenue collected, so this won’t cut deeper into state services.
Under the current law established in the 1950s, insurance companies with a headquarters or regional home office (RHO) in Colorado can pay a lower tax rate if at least 2.5-percent of their domestic workforce resides in Colorado. HB25B-1003 repeals this reduction. The bill passed by a vote of 7-4.
“While the GOP sides with corporations, Colorado Democrats fight for everyday Coloradans,” said Rep. Javier Mabrey, D-Denver, sponsor of HB25B-1003. “When Congressional Republicans passed Trump’s budget bill, they carved out massive tax breaks for the 1 percent and corporations by increasing costs for everyone else. Colorado Democrats are ending special interest tax breaks like this that aren’t effective, don’t create jobs, and are nothing more than corporate handouts that come at the expense of everyone else.”
“The data shows this special interest corporate loophole doesn’t create jobs and is clearly unnecessary,” said Speaker Pro Tempore Andy Boesenecker, D-Fort Collins, sponsor of HB25B-1003. “While it was created to increase jobs, this corporate tax loophole has had the opposite outcome, and data shows that most insurance companies are receiving tax breaks while actually eliminating Colorado jobs. We’re eliminating this special interest tax break and putting hardworking Coloradans first.”
A 2025 report from the Office of the State Auditor found that the tax credit is not achieving its goal of incentivizing job creation in Colorado’s insurance agency, yet it has impacted state revenue by $68 million to $105 million per year. Since the implementation of the workforce percentage requirement, the number of insurers and groups that qualify for the RHO rate reduction has not only decreased, but 15 of the 18 qualifying insurance groups reported a decrease in Colorado jobs while receiving a $17.5 million increase in credits.