Legislators introduced two tax-related bills this week that change tax policy for employers and employees. These bills would raise taxes as businesses are working to keep employees on payroll and bring back jobs that have been lost during the pandemic.
House Bill 1311, “Income Tax,” sponsored by Rep. Emily Sirota (D-Denver), Rep. Mike Weissman (D-Aurora), Sen. Chris Hansen (D-Denver) and Sen. Dominick Moreno (D-Commerce City), would impact personal and corporate income taxes and limit a variety of specific federal deductions. The bill would change the way state taxes are determined for C corporations and limit deductions, including 199A Qualified Business Income deductions, contributions to 529 plans, food and beverage expenses and the capital gains subtraction.
House Bill 1312, “Insurance Premium Property Sales Severance Tax,” would change certain rules, definitions, procedures and exemptions related to business personal property tax. It would also narrow the scope of the home office insurance premium tax rate reduction, remove the sales tax vendor fee for businesses earning $1 million a year or more, phase out tax credits and exemptions for the severance on coal and expand the business personal property tax exemption from $7,000 to $50,000.
The additional revenue that would come from the rolled-back exemptions in House Bill 1311 would help expand the Child Care Tax Credit and the Earned Income Tax Credit while the additional revenue from changes in House Bill 1312 would be used to expand the business personal property tax exemption. While we see great value in expanding and enhancing all of these programs, these bills ignore the fact that working families need both tax relief and good jobs. The legislation also comes at a time when the state is flush in revenue, thanks to strong budget projections and extensive federal assistance.
“Today, we have funding that will allow us to both expand these important tax credits for working families and avoid raising taxes for the same employers that keep our working families working by providing jobs,” said Chamber President and CEO Kelly Brough. Read her full planned testimony for a hearing anticipated to occur later today.
We are concerned that the bills:
- Complicate filings for multi-state and multi-national companies.
- Add sales and use taxes on digital goods, which would discourage technology companies from moving and growing in our state.
- Harm nonprofits by putting a cap on individual deductions.
- Hurt the more than 300,000 families that save for college through Colorado’s CollegeInvest program.
- Fail to include indexes to account for future economic conditions.
Bills sponsors and House leadership have been open to our feedback to date and we will continue to discuss our concerns with them in coming days. We will track these bills as they move through the legislature and provide you with updates.
Chamber Opposes Bill that Would Disrupt Workers’ Comp Process
In March, Sen. Robert Rodriguez (D-Denver), Rep. Steven Woodrow (D-Denver) and Rep. Andrew Boesenecker (D-Fort Collins) introduced Senate Bill 197, “Workers’ Compensation Physician,” which would change the existing workers’ compensation statute by expanding physician choice for employees beyond the current agreed-to level, allowing individuals to change their physicians at any point. While this may seem like a minimal change, we anticipate the move will significantly raise workers’ compensation costs costs and disrupt a process that the vast majority of workers are satisfied with.
The network of physicians currently available through workers’ compensation provides high-quality care to workers as providers are thoroughly vetted and screened for both quality and cost. According to Pinnacol Assurance, 77% of workers are satisfied or very satisfied with the care they receive from the existing network of physicians, and only 0.002% of the 40,000 workers that Pinnacol covered in 2019 took advantage of their already established statutory right to change physicians.
The bill would also increase costs for employers and employees. Pinnacol estimates that the shift from in-network to out-of-network physicians could increase its claims costs over the next two years by a minimum of 11% and increase premiums by up to 14.9% annually.
The bill moved through the Senate where several amendments were made, but none addressed our concerns with the legislation. It’s now headed to the House Committee on Business Affairs & Labor to be heard on Thursday.
Concerns with Price Caps in Drug Affordability Bill
Legislation creating the Colorado prescription drug affordability review board, giving the board the authority to set price caps for prescription drugs that they identify as unaffordable for Colorado consumers, has moved out of the Senate on third reading to begin its process in the House chamber.
Laura Giocomo Rizzo, vice president of external affairs for the Chamber, testified in opposition to Senate Bill 175 last month in the Senate Health and Human Services Committee, stating that “fixing prices typically distorts a market and doing this on a state-by-state basis is a dangerous move. In a worst-case scenario, patient access to drugs may be threatened if market distortions are too serious, or if drug-makers believe government price-setting in Colorado presents too great a risk to their business model for them to participate in our market.”
While we applaud efforts to reduce the cost of health care and increase transparency, we do not support artificial price-setting for any industry. We continue to actively lead efforts to decrease the high cost of health care and encourage all stakeholders to collaborate toward solutions that work for consumers and employers. We will continue to follow this one closely as it moves through the legislative process.
Tell Your Senators to Vote No on Public Option Bill
Thank you to those of you who have written to your state senators to vote no on House Bill 1232, “Standardized Health Benefit Plan Colorado Option.” We sent out an alert Tuesday sharing our concerns with this legislation and asked you to take action.
House Bill 1232 directs the Commissioner of Insurance to establish a single, standardized health benefit plan for the individual and small group markets. Private insurers would then be required to offer the highly regulated plan in every county where they currently operate.
Insurers would also be forced to lower premiums by an arbitrary 18% over three years. If plans fail to meet premium reduction targets, the Commissioner of Insurance can hold a public hearing to establish government-set reimbursement rates that all health care providers must accept to ensure premium reduction targets are met.
Unfortunately, rather than address the true drivers of health care costs in ways that will benefit all consumers, House Bill 1232 seeks to provide cost-savings to some Coloradans by increasing costs for the majority of Coloradans – namely those who get their care through private, non-standardized insurance plans, most often employer-sponsored benefits. Further, it threatens access to care, reduces competition and consumer choice and gives a tremendous amount of power and authority to the Commissioner of Insurance, an appointed administrator who is not accountable to Colorado voters.
We still need your help! The bill goes to the Senate Health & Human Services Committee on Monday. Write your state senator now to make sure they know where you stand on this legislation.
Chamber Takes Positions on Seven Bills and Testifies on Four
This week, the Chamber also took a position on seven bills and submitted testimony on four.
- House Bill 1302 Continue COVID 19 Small Business Grant Program | Rep. Leslie Herod (D-Denver), Rep. Lindsey Daugherty (D-Arvada) and Sen. Faith Winter (D-Westminster)
- House Bill 1306 Accreditation Of Postsecondary Institutions | Rep. Alex Garnett (D-Denver), Rep. Tim Geitner (R-Falcon), Sen. Robert Rodriguez (D-Denver) and Sen. Paul Lundeen (R-Monument)
- Senate Bill 252 Community Revitalization Grant Program | Sen. Stephen Fenberg (D-Boulder), Sen. Chris Holbert (R-Douglas County), Rep. Brianna Titone (D-Arvada) and Rep. Susan Lontine (D-Denver)
- Senate Bill 262 Special District Transparency | Sen. Rachel Zenzinger (D-Arvada), Sen. Bob Gardner (R-Colorado Springs), Rep. Shannon Bird (D-Westminster) and Rep. Hugh McKean (R-Loveland)
- Senate Bill 264 Adopt Programs Reduce Greenhouse Gas Emissions | Sen. Chris Hansen (D-Denver) and Sen. Don Coram (R-Montrose)
- House Bill 1311 Income Tax | Rep. Emily Sirota (D-Denver), Rep. Mike Weissman (D-Aurora), Sen. Chris Hansen (D-Denver) and Sen. Dominick Moreno (D-Commerce City)
- House Bill 1312 Insurance Premium Property Sales Severance Tax | Rep. Mike Weissman (D-Aurora), Rep. Emily Sirota (D-Denver), Sen. Chris Hansen (D-Denver) and Sen. Dominick Moreno (D-Commerce City)
- House Bill 1191: Prohibit Discrimination COVID-19 Vaccine Status | Testimony
- House Bill 1264: Funds Workforce Development Increase Worker Skills | Testimony
- Senate Bill 106: Concerning Successful High School Transitions | Testimony
- Senate Bill 260: Sustainability Of The Transportation System | Testimony
Visit our current legislation page to see all our positions and testimony so far this session.