Signed! Bill to Auction Future Tax Credits at Discount
DENVER, CO – Governor Jared Polis on Thursday signed legislation to allow businesses to pre-pay taxes at a small discount, after a $1 billion hole was created in Colorado’s budget by recent federal tax changes.
HB25B-1004, sponsored by Senators Janice Marchman, D-Loveland, and Marc Snyder, D-Manitou Springs, and Representatives Rebekah Stewart, D-Lakewood, and Sean Camacho, D-Denver, allows businesses to pre-pay taxes at a discount for future years when Colorado is anticipated to collect more revenue than the state’s spending limit under TABOR.
“HB25B-1004 gives Colorado businesses a chance to save on future taxes while helping the state manage this year’s billion-dollar budget shortfall,” said Marchman. “It’s a practical approach that supports local economies, protects essential services, and makes sure businesses and communities both come out ahead.”
“The billion-dollar revenue shortfall we’re facing from Congressional Republicans’ corporate tax breaks would require cuts to health care, public education, transportation and other essential services, which is why we took action with this special session to protect Coloradans and core services," said Stewart. “By allowing companies to pre-pay future taxes, we can boost revenue now to fund these services. We’re using all the tools in our tool belt to address the crisis caused by Trump and Congressional Republicans when they passed a budget bill that hands out corporate tax giveaways at the expense of hardworking Coloradans.”
“This new law lets Colorado businesses work with the state to save money now and protect the things we all rely on like K-12 public schools, roads, and health care,” said Snyder. “By prepaying future taxes at a discount, businesses can reduce long-term costs while helping the state weather the budgeting storm caused by Republicans in Congress. This law represents who we are as Colorado, where all of us chip in to keep our communities thriving.”
“Unlike Republicans in Congress, Colorado Democrats are demonstrating that we prioritize the needs of our constituents, not the ultra-wealthy,” said Camacho. “Our legislation will allow businesses to pay their future taxes now, at a discounted price, to save them some money while protecting funding for services that all Coloradans rely on. This law is one of many steps that Colorado Democrats are taking to blunt the destructive impacts of Trump’s tax bill.”
HB25B-1004 allows a one-time auction of future tax credits, giving companies the opportunity to buy tax credits to pre-pay a portion of their future taxes at a small discount. This saves businesses money, allowing companies to pre-pay future taxes now, and bolsters our state revenue to offset the immediate impacts of recent federal tax changes. This does decrease revenue in future years, but after 2025-2026 the state budget is forecast to be limited by the TABOR cap, not the amount of revenue collected, so this won’t cut deeper into state services.