HB 21-1311

  • Colorado House Bill
  • 2021 Regular Session
  • Introduced in House May 25, 2021
  • Passed House May 25, 2021
  • Passed Senate Jun 03, 2021
  • Signed by Governor Jun 23, 2021

Abstract

Section 2 of the act requires CollegeInvest to provide the department of revenue (department) with a secure electronic report of CollegeInvest account holders who are also Colorado taxpayers who made distributions between January 1, 2017, and January 1, 2021. The department is required to examine a risk-based sample of such taxpayers to substantiate that the distribution was made for authorized purposes. The department is also required to regularly example a risk-based sample of distributions on or after January 1, 2021, and determine if the taxpayer paid the correct amount of income tax. The executive director of the department is required to provide a report of the examinations as part of the department's presentation to its legislative committee of reference.Section 3 of the act modifies how taxable income is determined for individuals for purposes of the state income tax. Specifically, it:Extends the limit on the federal deduction allowed under section 199A of the internal revenue code; Imposes a cap for taxpayers with adjusted gross incomes equal to or exceeding $400,000 on certain itemized deductions claimed under the internal revenue code; Requires individual taxpayers to add amounts of federal taxable income that are equal to the enhanced federal deductions for food and beverage in a restaurant for the 2022 income year (this is also required for corporate taxpayers in section 7 of the act); Repeals, for social security income earned by individuals who are 65 years of age or older that is included in federal taxable income only, the cap on the deduction for pension and annuity income received; and Adds an annually adjusted cap, per taxpayer per beneficiary, on the income tax deduction for contributions made to 529 plans, and requires CollegeInvest to provide the department with a secure electronic report containing specified information for the 529 plans account owners and third-party contributors necessary for the administration of the income tax deduction. Section 4 of the act increases the earned income tax credit to 20% for income tax years commencing on or after January 1, 2022, but before January 1, 2023, and income tax years commencing on or after January 1, 2026. Section 3 also increases the earned income tax credit to 25% for income tax years commencing on or after January 1, 2023, but before January 1, 2026. Finally, section 4 of the act applies the lowered minimum age for individuals without a qualifying child in the federal "American Rescue Plan Act of 2021" to the state credit for income tax years commencing on or after January 1, 2022.Section 5 of the act funds the child tax credit for income tax years commencing on or after January 1, 2022, and allows a child tax credit in the state regardless of the federal requirement that a qualifying child must have a social security number for the federal child tax credit. Section 5 of the act also specifies that if the changes to the federal child tax credit in the "American Rescue Plan Act of 2021" are no longer in effect, the percentages of the state child tax credit are increased.Section 6 of the act modifies the computation of the corporate income tax receipts factor to make it more congruent with combined reporting and also prevents corporations from using tax shelters in foreign jurisdictions for the purpose of tax avoidance.Section 7 of the act functions to prevent corporations from using tax shelters in foreign jurisdictions for the purpose of tax avoidance and additionally modifies how taxable income is determined for C corporations for purposes of the state income tax. Specifically, it requires corporate taxpayers to add amounts of federal taxable income that are equal to the enhanced federal deductions for food and beverage in a restaurant for the 2022 income year.Section 8 of the act limits the state subtraction for certain capital gains incurred by allowing the subtraction to a taxpayer who is required to file a Schedule F, profit or loss from farming, as an attachment to the taxpayer's federal income tax return for the tax year in which the net capital gains arise for the sale of real property, not tangible personal property, that is classified as agricultural land for property tax purposes.Section 9 of the act creates a temporary income tax credit for a business for a percentage of the conversion costs to convert the business to a worker-owned coop, an employee stock ownership plan, or an employee ownership trust.Sections 10 through 13 of the act address the avoidance of income tax by certain captive insurance companies.Section 14 of the act adds an appropriation to:The office of the governor for use by the office of economic development for the administration of the income tax credit for a business converting to a worker-owned coop, an employee stock ownership plan, or an employee ownership trust; and The department of revenue for administration and support.(Note: This summary applies to this bill as enacted.)

Bill Sponsors (4)

Votes


Actions


Jun 23, 2021

Office of the Governor

Governor Signed

Jun 17, 2021

Office of the Governor

Sent to the Governor

Jun 16, 2021

House

Signed by the Speaker of the House

Senate

Signed by the President of the Senate

Jun 07, 2021

House

House Considered Senate Amendments - Result was to Concur - Repass

Jun 04, 2021

House

House Considered Senate Amendments - Result was to Laid Over Daily

Jun 03, 2021

Senate

Senate Third Reading Passed with Amendments - Floor

Jun 02, 2021

Senate

Senate Second Reading Special Order - Passed with Amendments - Floor

Jun 01, 2021

Senate

Senate Committee on Appropriations Refer Unamended to Senate Committee of the Whole

  • Committee-Passage
  • Referral-Committee
Senate Committee of the Whole Appropriations

May 26, 2021

Senate

Senate Committee on Finance Refer Unamended to Appropriations

  • Referral-Committee
Finance Appropriations

May 25, 2021

Senate

Introduced In Senate - Assigned to Finance

  • Introduction
Finance

House

House Third Reading Passed with Amendments - Floor

May 24, 2021

House

House Third Reading Laid Over Daily - No Amendments

May 22, 2021

House

House Second Reading Special Order - Passed with Amendments - Committee, Floor

May 21, 2021

House

House Second Reading Special Order - Laid Over Daily - No Amendments

May 20, 2021

House

House Second Reading Laid Over Daily - No Amendments

May 18, 2021

House

House Committee on Appropriations Refer Amended to House Committee of the Whole

  • Committee-Passage
  • Referral-Committee
House Committee of the Whole Appropriations

May 14, 2021

House

House Committee on Finance Refer Amended to Appropriations

  • Referral-Committee
Appropriations Finance

May 10, 2021

House

Introduced In House - Assigned to Finance

  • Introduction
Finance

Bill Text

Bill Text Versions Format
Signed Act (06/23/2021) PDF
Final Act (06/16/2021) PDF
Rerevised (06/03/2021) PDF
Revised (06/02/2021) PDF
Reengrossed (05/25/2021) PDF
Engrossed (05/22/2021) PDF
Introduced (05/10/2021) PDF
PA2 (05/18/2021) PDF
PA1 (05/17/2021) PDF
Committee Amendment PDF

Related Documents

Document Format
Fiscal Note SA1 (05/17/2021) PDF
Fiscal Note SA2 (05/31/2021) PDF
Fiscal Note FN1 (05/13/2021) PDF
Fiscal Note FN2 (05/18/2021) PDF
Fiscal Note FN3 (05/26/2021) PDF
Fiscal Note FN4 (08/31/2021) PDF

Sources

Data on Open States is updated periodically throughout the day from the official website of the Colorado General Assembly.

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