Governor Signs Legislation to Close a Special Interest Corporate Tax Loophole

Congressional Republicans’ budget created a $1 billion deficit by allowing corporations to dodge nearly $1 billion in taxes owed to Colorado

DENVER, CO – The Governor on Thursday signed legislation to close a special interest corporate tax loophole for insurance companies after Republicans in Congress created a $1 billion hole in Colorado’s budget with massive corporate tax cuts.

HB25B-1003, sponsored by Senators Mike Weissman, D-Aurora, and Julie Gonzales, D-Denver, and Representatives Javier Mabrey, D-Denver, and Andrew Boesenecker, D-Fort Collins, repeals a special tax break for insurance companies. Before this new law, insurance companies with a headquarters or regional home office (RHO) in Colorado could pay a lower tax rate if at least 2.5 percent of their domestic workforce resides in Colorado. HB25B-1003 repeals this reduction. 

“In H.R. 1, Congressional Republicans doubled down on broken tax laws, rewarding the wealthy and connected instead of supporting families and small businesses,” said Weissman. “But here in Colorado we try to base our choices in the facts. And non-partisan research has shown this outdated corporate tax break doesn't bring jobs to Colorado and has actually rewarded firings, which is why we are putting an end to it.”

“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 Mabrey. “Colorado Democrats don’t believe in subsidizing corporations while hardworking people lose access to life-saving health care. This law ends a special insurance industry tax break and protects funding for schools, roads and health care.”

“Insurance companies and billionaires don’t need any more tax handouts – they’ve gotten plenty from the Trump administration and Republicans in Congress,” said Gonzales. “This new law is a step toward making Colorado’s tax code work for our communities and not corporations. It ends a tax giveaway to major insurance companies that tax experts agree isn’t effective, and instead helps protect funding for schools and essential services.” 

“Trump’s budget will increase prices for health care, energy, food, and everyday necessities while slashing taxes for major corporations,” said Boesenecker. “This law ends an outdated and ineffective special tax reduction for insurance companies while protecting the services that matter most to hardworking Coloradans, like health care and public education. While this special tax reduction was meant to create jobs, nonpartisan audits show that insurance companies continue to cut jobs, making it necessary to close 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 sector, 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.