Senate Advances 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 Senate Appropriations Committee today passed 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, would repeal a special tax break for insurance companies. 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 would repeal 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 And non-partisan research has shown this outdated corporate tax break doesn't bring jobs to Colorado and has actually rewarded firings, which is why we are putting an end to it.”

“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 bill 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.” 

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.

HB25B-1003 now moves to the Senate floor for further consideration.