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Colorado House approves broad tax package to offset federal changes and fund affordability credits
Summary
After hours of debate, the House passed HB12‑22 to decouple several federal tax provisions for state purposes, add back certain deductions and create a family affordability credit designed to offset revenue shifts; supporters said it preserves child‑poverty gains while opponents warned of business impacts and TABOR risks.
The Colorado House passed a sweeping tax package, HB12‑22, that adjusts how state law treats several federal business tax changes and creates a new family affordability credit to channel revenues back to households. Sponsors said the measures are intended to restore tax policy balance after changes at the federal level and to protect the state’s recent gains in reducing child poverty. "This bill ensures that our tax base is not reduced from out of state investments," Rep. Brad McCormick, the finance sponsor, said during debate.
Supporters argued the measure offsets provisions in last year’s federal tax law that shrank Colorado’s tax base and threatened the state’s family affordability programs. "This bill only decouples from a few federal expansions and uses the proceeds to preserve the Family Affordability Tax Credit," said Representative Brett McCormick.
Opponents pressed several concerns on the floor. Representative de Graaf argued the package pairs new revenue provisions with a narrowly targeted credit in a way that could circumvent Colorado’s taxpayer‑approval rules. "This creates a new tax program that should be considered by voters," de Graaf said, urging amendments that would send some provisions to the ballot or strip the new credit.
Other members pressed the bill’s effect on businesses. Representative Richardson warned that changes to research and development expensing could chill innovation and asked the House to reconsider elements that would force companies to expand deductions over time instead of allowing immediate expensing. "Cutting R&D incentives is short‑sighted," Richardson said.
Floor votes rejected a set of amendments offered by both sides. The bill passed after committee reports and floor debate; sponsors and legislative staff said the package is intended to be budget‑neutral over the medium term by redirecting offsets to the family affordability credit and other targeted programs. The legislation will now move toward implementation steps and administrative rulemaking by state agencies.
