JOINT RELEASE: Bills Introduced to Close Corporate Tax Loopholes and Protect Access to Services to Responsibly Close Budget Deficit Caused by GOP’s Corporate Tax Cuts
DENVER, CO – After Republicans in Congress slashed corporate taxes when they passed the GOP budget bill, Democrats are back at the Capitol to responsibly address this crisis with a balanced approach that closes corporate tax loopholes, cuts spending where possible, and uses some of the state’s budget to protect the core services people rely on.
“We’re back because Trump and Washington Republicans’ big ugly budget, which any one of the GOP members of our Congressional delegation could have stopped, gave corporations massive tax cuts that blew a billion dollar hole in our budget,” said Speaker Julie McCluskie, D-Dillon. “We will take a balanced approach that closes corporate tax loopholes, responsibly cuts some spending, and uses some of the rainy-day savings Democrats have built up over the last few years to address this crisis and protect funding for health care, roads and education.”
“The GOP’s federal budget handed out a billion dollars of corporate tax breaks while making life more expensive for everyone else through higher health costs, energy costs, and grocery costs,” said Senate President James Coleman, D-Denver. “Coloradans cannot afford the impacts of the GOP budget, which is why we’re back at the Capitol standing up for Colorado families, listening to those on the frontlines of providing services, and working to maximize every dollar. We’re working on a balanced, responsible response to the budget shortfall that will close corporate tax loopholes and protect services that Coloradans rely on rather than the interests of corporations.”
“With nearly 80 percent of the tax breaks in Trump’s bill benefiting corporations, it only makes sense to close corporate tax loopholes and help preserve education, health care and public safety,” said House Majority Leader Monica Duran, D-Wheat Ridge. “Coloradans shouldn't lose funding for the core services people rely on to protect corporations who just got $1 billion in tax cuts from Trump and the GOP Congress. The GOP budget hurts vulnerable people the most, including veterans, people with disabilities, and people of color, which is why we are cracking down on offshore tax havens and special interest tax breaks to protect the core services Coloradans rely on to get ahead and thrive.”
“Trump and the Congressional Republicans’ big tax bill lets corporations dodge nearly $1 billion in taxes that they owe Colorado to help pay for essentials like health care, schools, and roads,” said Senate Majority Leader Robert Rodriguez, D-Denver. “While they put corporations and the wealthiest Americans first, we’re choosing the hardworking people of Colorado by closing corporate tax loopholes, protecting essential services, and prioritizing consumer protections during this special session.”
Closing Corporate Tax Loopholes
HB25B-1003 repeals special corporate tax breaks for insurance companies with a “Regional Home Office”: Under current law, insurance companies with a headquarters/regional home office (RHO) in Colorado can take a special tax break that allows them to pay a lower tax rate. To qualify, 2.5 percent of an insurer’s domestic workforce must be located in Colorado. While intended to incentivize job creation in the insurance industry in Colorado, the State Auditor found in March 2025 that the tax credit is not achieving this goal, and most insurance companies have actually eliminated jobs while claiming this special interest tax break that only exists for them. The bill would repeal this corporate tax break.
HB25B-1002 cracks down on foreign tax havens, offshore bank accounts, and tax loopholes for US companies that dodge Colorado taxes with foreign assets:
Expand the list of foreign tax havens: Colorado applies extra scrutiny to companies incorporated in common tax havens like the Cayman Islands and Panama, requiring these companies to still pay Colorado taxes unless they can prove they are legitimately operating in the foreign country (see HB21-1311). Updated information about international tax avoidance has indicated additional countries used for this purpose, and the bill applies the extra scrutiny to these countries.
No Colorado tax breaks for companies investing in other states: Trump’s 2017 tax cuts for the wealthy created a special tax break for multinational businesses that keep their intangible assets in the US, including patents, software, and trademarks. As a federal credit, the majority of claims are from corporations whose assets aren’t even located in Colorado. If the state allows the changes to apply to Colorado taxes as well, it would give a larger Colorado tax break to corporations for investments in other states. The bill would decouple the state from this federal credit entirely.
HB25B-1004 allows companies to pre-pay taxes / sells tax credits: This bill would allow an auction of a limited amount of future tax credits. Companies that buy the tax credits would effectively pre-pay a portion of their future taxes now, at a small discount, creating savings and flexibility for them while helping to fill the revenue hole created by H.R. 1 for the state. This was done in HB20-1413 to raise money for CLIMBER small business loans.
Several of the tax giveaways in H.R. 1, such as the changes to business depreciation rules, are retroactive or front-loaded to have a much bigger impact in the current fiscal year (2025-26) than future years; allowing companies to pre-pay future taxes now partially offsets this effect.
HB25B-1001 limits tax breaks for higher earning businesses: Trump’s 2017 tax cuts for the wealthy allowed certain business owners to deduct (not pay taxes on) 20 percent of “qualified business income” (QBI) through 2025. The QBI deduction applies to pass-through businesses, such as partnerships, S corporations, and real estate investment trusts. H.R. 1 made this deduction permanent and made some modifications.
In 2020, Colorado decoupled from this federal tax change for business owners with incomes over $500,000 per year (or $1 million per year for joint filers), maintaining that they still needed to pay taxes on all of their business income (HB20-1420 and HB21-1311). The bill for the special session makes Colorado’s decoupling permanent; without taking action, the decoupling is currently scheduled to expire after 2025.
HB25-1005 ends subsidies for collecting sales taxes by modernizing sales tax collection: Retailers and other companies that collect sales tax are currently allowed to retain a portion of that state sales tax, which was originally intended to cover the costs of collecting and remitting the tax. Currently, vendors can retain 4 percent of the sales tax they collect. Nowadays, electronic point-of-sale technology is ubiquitous even for small vendors, and it cheaply and easily automates the collection and payment of state sales tax. Since this burden has gone away, the bill would repeal this subsidy – about one cent on every $10 of sales.
Preserving Access to Services
SB25B-002 restores access to health care for Medicaid recipients at Planned Parenthood: H.R. 1 immediately removed Planned Parenthood from the federal Medicaid program, forcing PPRM providers to cancel thousands of appointments. Weeks later, a Temporary Restraining Order reversed this federal prohibition, though the issue is still working its way through the courts. This bill authorizes state-funded reimbursement to Planned Parenthood for certain services, including cancer screenings, birth control consultations, and STI checks.
SB25B-003 preserves SNAP funding by adjusting Healthy School Meals for All ballot question: The GOP budget cuts the Supplemental Nutrition Assistance Program (SNAP), and hundreds of thousands of recipients may now lose access to food. This bill would amend the language of a ballot measure (HB25-1274) that will be put before the voters this November. If it passes, it will allow funds raised for the Healthy School Meals for All (HSMA) program to be used to support SNAP, so long as the HSMA program is fully funded first.
Making Responsible Decisions for Colorado’s Fiscal Future
SB25B-001 updates spending reduction processes during revenue shortfalls: Under current law, the Governor has broad unilateral authority to suspend programs and services during a revenue shortfall via executive order. The bill would require the Governor to notify the Joint Budget Committee (JBC) of executive orders to reduce spending and requires the JBC to promptly meet to discuss the plan. The bill balances the authority between the Governor and the General Assembly by ensuring the JBC is involved in decision-making processes early on and by adding guardrails to the executive branch’s existing authority to help ensure that they continue to meet and implement legislative directives.
The bill would also update the required spending reduction triggers to more accurately reflect economic pressures and the current status of the reserve, which Democrats have worked to build up to 15 percent since the COVID pandemic when it fell below 4 percent. In addition to the triggers in existing law, the bill adds that if a regular quarterly revenue estimate indicates that the state needs to use an amount of the reserve equal to 2 percent of the general fund appropriations for that fiscal year (e.g. around $330 million for FY26), the Governor must take action to reduce spending.