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HB21-1312

Insurance Premium Property Sales Severance Tax

Concerning taxation, and, in connection therewith, narrowing the scope of the home office insurance premium tax rate reduction and the annuities consideration exemption for the insurance premium tax; for purposes of the property tax, requiring the actual value of real property to reflect the value of the fee simple estate and requiring personal property to be based on the property's value in use; increasing the per-schedule exemption for business personal property tax and reimbursing local governments for the lost tax revenue; for purposes of the sales and use tax, codifying that the definition of tangible personal property includes digital goods and specifying that the tax on sales and purchases of tangible personal property includes amounts charged for mainframe computer access, photocopying, and packing and crating; disallowing the sales tax vendor fee for retailers with a substantial amount of taxable sales during the filing period; for the severance tax on oil and gas, requiring the net-back deductions used to determine gross income be direct costs actually paid by the taxpayer; phasing-out tax credits and exemptions for the severance tax on coal; and making an appropriation.
Session:
2021 Regular Session
Subject:
Fiscal Policy & Taxes
Bill Summary



To be deemed to maintain a home office or regional home office and pay the insurance premium tax at a rate of 1%, the act requires a company to have a minimum percentage of its total domestic workforce in the state. This percentage is 2% for 2022, 2.25% for 2023, and 2.5% for 2024 and thereafter. The act also narrows the tax exemption for annuities considerations. For the purpose of auditing a company's tax statement, the commissioner of insurance may appoint an independent examiner to conduct an examination on behalf of the commissioner.

For purposes of imposing the property tax, the act specifies that the actual value of real property reflects the value of the fee simple estate and the actual value of personal property is determined based on the property's value in use, which will be defined by the property tax administrator. The act also increases the per schedule exemption for business personal property from $7,900 to $50,000, adjusted for inflation, and the state is required to reimburse local governments for lost property tax revenue caused by the increase. Assessors are required to provide an estimate of the exempt business personal property along with the certifications to local governments.

The state sales and use tax is imposed on the sale and use of tangible personal property. The act codifies the department of revenue rule that the definition of "tangible personal property" includes "digital goods" and specifies that the state sales tax applies to amounts charged for mainframe computer access, photocopying, and packing and crating. Beginning January 1, 2022, a retailer whose total taxable sales were greater than $1 million for a filing period is not permitted to retain any portion of the sales and use tax collected as compensation for the retailer's tax-collection expenses.

The act limits the allowable deductions, which are used to determine the taxable amount of oil and gas subject to the severance tax, to direct costs actually paid or accrued by the taxpayer for those purposes. Beginning with the 2022 taxable year, the act phases out the quarterly exemption and the tax credits for the severance tax on coal. The additional revenue that results from changes to the coal severance tax is credited to the just transition cash fund.

(Note: This summary applies to this bill as enacted.)

Status

Introduced
Passed
Became Law

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Bill Text

COVID-19 Resources
2021 Ballot Information Booklet (Blue Book)
NORTH ENTRANCE IS CURRENTLY CLOSED.  TO ENTER THE CAPITOL, USE THE SOUTH ENTRANCE, UNDER THE STAIRS, AT 14th AVENUE AND SHERMAN STREET.