Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Insurance Tax topic
No spam. Unsubscribe anytime.
Senate revokes regional-home-office break in insurance premium tax after auditor review
Summary
Senators approved House Bill 1003 to end the Regional Home Office (RHO) preferential premium-tax rate after state auditor reviews found the tax break did not correlate with job growth. Backers said the change restores tax equity; opponents warned of job losses and urged phased approaches.
The Colorado Senate on Aug. 24 passed House Bill 1003, which phases out a reduced tax rate for certain insurance companies that qualify as regional home offices (RHO). The measure ends the 50% rate reduction for qualifying premium activity after tax year 2025; supporters cited state-auditor reviews that found the RHO did not reliably produce job growth in Colorado.
"The data indicate that this provision does not lead to jobs," said Senator Weisman, noting a recent Office of the State Auditor (OSA) report that found 15 of 18 eligible groups reported net job losses while receiving RHO benefits. Senate debate referenced both the 2020 and 2025 OSA reports.
Opponents argued the change is a blunt instrument and urged a staged approach or additional stakeholder work to avoid sudden disruptions. "If we could somehow limit it to a one year pause and then come back with a stakeholder process next year, that would be my preferred way to go," said Senator Snyder, who proposed a phased alternative.
Supporters said the measure recaptures tens of millions of dollars in revenue and aligns with Colorado—s longstanding policy of taxing insurance based on premiums rather than offering targeted state subsidies. The bill passed the Senate on second reading and was placed on the calendar for final passage.
What the bill does: Under current law qualified insurers pay a reduced premium tax rate in specified circumstances; the bill ends that reduced rate for tax years after 2025 and retains the state—s general premium tax structure. Supporters pointed to OSA findings that the RHO benefit cost state revenue while not reliably increasing jobs.
Next steps: The measure advances to third reading and final passage; sponsors said they will continue stakeholder engagement about transition timing. Department of Revenue and economic development offices will monitor impacts on employer location and tax collections.
