On March 7, 2025, the Colorado State Legislature introduced House Bill 1005, a legislative proposal aimed at bolstering the state's film festival industry through a targeted tax credit initiative. This bill seeks to address the growing need for financial support within the film sector, particularly for global and small Colorado film festival entities, by providing a tax credit that can enhance their operational viability.

The key provisions of House Bill 1005 include the establishment of a tax credit certificate that must detail the taxpayer's name, Social Security number or federal employer identification number, the approved tax credit amount, and the calendar year for which the credit is applicable. Notably, if the tax credit exceeds the income tax due for qualifying entities, or if the entity is tax-exempt under federal law, the excess credit will not be carried forward. Instead, the bill mandates that 100% of any unclaimed tax credit value be refunded to the film festival entity by the Colorado Department of Revenue.

This legislative move has sparked discussions among lawmakers and industry stakeholders regarding its potential economic implications. Proponents argue that the tax credit could significantly stimulate local economies by attracting more film-related activities and events, thereby creating jobs and increasing tourism. However, critics have raised concerns about the long-term sustainability of such tax incentives and their impact on state revenue.

The bill is set to be repealed on December 31, 2041, unless further legislative action is taken. Additionally, it includes a provision for a referendum petition, allowing voters to weigh in on the bill's implementation if such a petition is filed within the stipulated timeframe. This aspect underscores the bill's contentious nature, as it may face public scrutiny and debate leading up to the potential referendum in November 2026.

As House Bill 1005 progresses through the legislative process, its outcomes could have lasting effects on Colorado's cultural landscape and economic framework. The ongoing discussions surrounding the bill highlight the balancing act between fostering creative industries and ensuring fiscal responsibility within the state. Stakeholders will be closely monitoring its developments, as the implications of this bill could resonate well beyond the film festival community.