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The House 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.
“The billion-dollar revenue shortfall we’re facing from Congressional Republicans’ corporate tax breaks would require cuts to health care, public education, transportation and other essential services, which is why we’re taking action with this special session to protect Coloradans and core services," said Rep. Rebekah Stewart, D-Lakewood, sponsor of HB25B-1004. “By allowing companies to pre-pay future taxes, we can boost revenue now to fund these services. We’re using all the tools in our toolbelt to address the crisis caused by Trump and Congressional Republicans when they passed a budget bill that hands out corporate tax giveaways at the expense of hardworking Coloradans.”
“Unlike Republicans in Congress, Colorado Democrats are demonstrating that we prioritize the needs of our constituents, not the ultra-wealthy,” said Rep. Sean Camacho, D-Denver, sponsor of HB25B-1004. “Our legislation would allow businesses to pay their future taxes now, at a discounted price, to save them some money while protecting funding for services that all Coloradans rely on. This bill is one of many steps that Colorado Democrats are taking to blunt the destructive impacts of Trump’s tax bill.”
HB25B-1004, which passed by a vote of 41-20, would create 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. Beginning next fiscal year,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 subsidy. The bill passed by a vote of 41-21.
“Under Trump’s budget, corporations that are boasting record profits will see special tax breaks while everyday Coloradans are kicked off their health care and kids lose food and nutrition support,” said Rep. Javier Mabrey, D-Denver, sponsor of HB25B-1003. “Colorado Democrats don’t believe in subsidizing corporations while hardworking people lose access to life-saving health care. This bill would end a special insurance industry tax break and protect funding for schools, roads and health care.”
“Trump’s budget will increase prices for health care, energy and everyday necessities while slashing taxes for major corporations,” said Speaker Pro Tempore Andy Boesenecker, D-Fort Collins, sponsor of HB25B-1003. Our bill would end the special tax rate for insurance companies and protect the services that matter most to hardworking Coloradans, like health care and public education. While this special tax rate was meant to create jobs, nonpartisan audits show that insurance companies continue to cut jobs and clearly do not need this loophole.”
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 cost the state $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.