DENVER, CO - The House today passed legislation to create a tax exemption for Colorado homeowners who are underinsured for rebuilding or replacement costs after a declared wildfire disaster. HB23-1240 passed by a vote of 44-16, with 16 Republicans voting against the bill.
“After the Marshall Fire, nearly 60% of families who lost their homes did not have enough insurance coverage to rebuild their home,” said Rep. Kyle Brown, D-Louisville. “Hundreds of families were burdened with restoring their property on their own dime. Our bill gives these families a tax refund on building materials that will save them money on construction costs, giving them an extra boost when they need it most.”
“When a wildfire wipes out hundreds of homes at once, it’s almost impossible to get the resources you need to rebuild,” said Rep. Judy Amabile, D-Boulder. “Insurance companies struggle to quickly provide quotes and building materials are stretched thin. This legislation creates a tax exemption for wildfire victims to help address the barriers that prevent them from rebuilding their home.”
HB23-1240 creates a state sales and use tax exemption for construction and building materials for homeowners looking to rebuild or repair their home after a declared wildfire disaster. The exemption for qualified purchases is administered through a refund process, which must be claimed by June 30, 2028, and allows homeowners that have already made purchases to retroactively claim a refund.
This bill is accompanied by HB23-1174, also sponsored by Representatives Kyle Brown and Judy Amabile, to reduce homeowner underinsurance for damaged homes or structures. It would require home insurance companies to offer a variety of coverages to protect them, covering the cost of repair or replacement for a damaged or destroyed structure. If a homeowner wants additional coverage, the insurer must offer coverage for extended replacement, law and ordinance, and inflation protection. It would also extend the length of time in which an insurer would have to notify a homeowner of a cancellation or refusal to renew a homeowner’s policy from 30 days to 60 days. The bill passed the House by a vote of 45-17.