All Roll Calls
Yes: 342 • No: 238
ColoradoHB26-12892026 Regular SessionHouseWALLET
Modification of Certain Tax Expenditures
Sponsored By: Kyle Brown (Democratic), Lorena Garcia (Democratic), Mike Weissman (Democratic)
Signed by Governor
Fiscal Policy & Taxes
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Bill Overview
Analyzed Economic Effects
46 provisions identified: 19 benefits, 13 costs, 14 mixed.
Landowners gain refundable wildfire mitigation credits
Individual owners of record of private Colorado land qualify as landowners even when the land has no home. This includes ownership interests involving an easement, right-of-way, or estate, but excludes partnerships, S corporations, and similar landowning entities. Starting with tax years beginning January 1, 2026, wildfire mitigation credits above Colorado income tax due are refunded. Excess credits cannot be carried forward; before 2026, they are neither refundable nor carried forward.
More wildfire tax help for landowners
For tax years beginning in 2026–2030, eligible Colorado landowners can claim up to $2,000 yearly for wildfire or beetle mitigation. The income limit starts at $300,000, with later inflation adjustments rounded to the nearest $100. Work must meet state standards and can include thinning trees at risk from or killed by mountain pine or spruce beetles. The law removes the former $625 joint-filer limit; couples filing separately can claim the credit on only one return. Unused credit can carry forward five years, and the credit section is repealed January 1, 2040.
Refundable tax credit for home caregivers
For tax years beginning in 2026–2028, qualified home caregivers get a credit worth 30% of their qualified caregiver income. The care must serve someone with an intellectual or developmental disability. Caregivers must work the maximum hours allowed by the Office of Community Living. Any credit above the caregiver's state income tax bill is refunded, not carried forward.
More food businesses qualify for equipment credits
Starting in tax year 2027, qualified food distributors join the equipment credit program. They must be Colorado-owned and operated and manage source-identified raw Colorado farm products for a consortium member during the year. Revised farm and retailer definitions include Colorado ownership and sales, location, food-stock, or farmers-market requirements tied to low-income, low-access neighborhoods. For 2025–2030, the credit covers 75% of eligible equipment costs after subtracting grants.
Retailers keep electric lawn equipment credits
Qualified retailers keep the credit for new electric lawn equipment sold in Colorado through tax years starting before January 1, 2030. The prior cutoff was January 1, 2027. The credit equals 33% of the total purchase price of eligible equipment sold. Beginning with tax years starting in 2027, retailers can receive quarterly advance payments. The credit section sunsets December 31, 2036.
Zone building owners get bigger credits
Starting with tax years beginning in 2027, owners and tenants receive a 25% enterprise-zone building rehabilitation credit. The per-building cap rises from $50,000 to $200,000. Buildings must be at least 20 years old and vacant for 135 of the 180 days before rehabilitation enters service. This replaces the prior two-year vacancy test. The old rules for pre-2027 tax years are repealed December 31, 2033.
Zone employers choose health credit years
Eligible enterprise-zone employers can claim $1,000 per covered employee in any two of their first ten full tax years in the zone. Previously, claims were limited to the first two years. Employers must pay at least 50% of the health plan's total cost. Eligible regulated or self-insured plans must include partial or full hospital and physician coverage.
Food businesses face tighter credit limits
Starting in tax year 2027, food equipment credits must total at least $375 to be claimed. Annual credits are capped at $300,000 per small family farm and $1 million per other taxpayer. The statewide annual certificate cap falls from $10 million to $5 million beginning in 2027.
Heat pump credits avoid repeated cuts
The law removes repeated June revenue checks through June 2031 for specified heat pump credits. It keeps the June 2025 trigger: forecast revenue growth below 4% cuts covered credits by 50% for the affected year. A reduced credit of $250 or less is unavailable. Qualifying equipment must be installed in an existing residential or nonresidential building. The section sunsets December 31, 2031.
Higher vehicle credits with possible reductions
For qualifying category 1 vehicles sold or leased in 2027, the credit increases from $1,000 to $2,000. For 2028, it increases from $500 to $1,000. The law's revenue-forecast condition can reduce these amounts.
Vehicle buyers face fewer forecast cuts
The law ends repeated June revenue checks through June 2027 for specified category 1 vehicle credits. It keeps the June 2025 forecast trigger. Revenue growth below 4% in that forecast cuts covered credits by 50% for the affected tax year. A reduced credit of $500 or less is unavailable. This provision sunsets December 31, 2031.
Vehicle buyers get new price limits
For category 1 vehicles bought or leased in 2027–2028, the maximum suggested retail price drops from $80,000 to $50,000. Vehicles priced above $50,000 receive no credit. For tax years starting in 2027–2028, vehicles priced below $40,000 qualify for an extra $2,500 credit. That extra-credit threshold rises from below $35,000.
Earned income tax help for residents
Beginning with tax years starting in 2028, eligible Colorado residents can claim a state earned income credit. Its base amount is 25% of the referenced federal credit, ignoring that federal provision's date limit. State percentage-adjustment rules also apply. Your dollar benefit depends on the federal credit amount for which you qualify.
Earlier lawn equipment credits for retailers
Beginning with tax years starting in 2027, qualified retailers can choose advance payments of the electric lawn equipment credit. The law makes quarterly advance payments available. It also extends the credit to January 1, 2030.
Higher taxes on out-of-state opportunity gains
Beginning with tax years starting in 2027, investors must add covered federally excluded opportunity gains to Colorado taxable income. The addback covers the gain exceeding the amount invested in a Colorado-qualified opportunity fund. For investments after December 31, 2026, the specified addback also covers money invested in non-Colorado-qualified funds. A Colorado-qualified fund must hold at least 90% of its assets in Colorado opportunity-zone property. When previously added gains later become federally taxable, investors can subtract those amounts from Colorado income to avoid taxing them twice.
Lawn equipment retailers need advance approval
Retailers must register and get Department of Revenue approval before sales they plan to use for electric lawn equipment credits. After notice and a hearing, the department can disqualify retailers for false information, nonqualifying credit claims or advance-payment requests, or losing their sales tax license. Disqualified retailers cannot apply again.
Stricter bicycle credit rules for retailers
Retailers must register and get state approval before selling electric bicycles for which they intend to claim the credit. They must give the Colorado Energy Office bicycle-model details and required updates. After notice and a hearing, the state can disqualify retailers for nonqualifying sales, misleading information, missing model details, or losing a sales tax license. Disqualified retailers cannot reapply and are removed from the published retailer list. Revenue officials can share relevant credit-claim taxpayer information with the Energy Office, but confidentiality rules and penalties still apply.
Bicycle buyers avoid repeated credit cuts
The law removes repeated June revenue checks through June 2031 for electric bicycle credits and purchase discounts. It keeps the June 2025 trigger. Forecast revenue growth below 4% cuts the credit, required retailer discount, and administrative fee by 50% for the affected year. The section sunsets December 31, 2031.
More funding for state health programs
For budget year 2026–27, the law adds $21,024 from the primary care fund to its program. That amount is based on the department receiving $20,710 in federal funds. It provides $17,704 from the tobacco education programs fund for education, prevention, and cessation administration. It also provides $17,704 from the prevention, early detection, and treatment fund for cancer, heart disease, and chronic lung disease grants. Immunization operations receive $333 from the General Fund exempt account; these provisions do not set new household payments or eligibility rules.
More state funding for universal preschool
For budget year 2026–27, the law provides $996,276 from the preschool programs cash fund for universal preschool. The Department of Early Childhood receives the money. This appropriation does not specify changes to a family's eligibility, preschool access, or out-of-pocket costs.
Businesses get longer investment credit use
Businesses can carry unused Colorado enterprise-zone investment credits forward for up to 14 years. They must apply the credit in the earliest possible tax year. Any amount left after 14 years is not refunded or credited.
Corporate groups remove duplicate foreign income
Starting with tax years beginning in 2027, corporate combined groups must remove specified foreign-company income included between group members. This covers Subpart F income and net controlled foreign corporation tested income. The reporting member must be a U.S. shareholder of the other group member. Removing these amounts can lower the group's Colorado taxable income.
More industrial projects qualify for credits
Starting with tax years beginning in 2027, biomethane-use equipment counts as an eligible industrial clean energy improvement. Tax-exempt people and Colorado political subdivisions also qualify as project owners. They must be exempt under Colorado's income tax exemption law and develop a project for a qualified industrial facility.
Rail projects get construction tax relief
Starting July 1, 2027, qualifying rail carriers receive a state use-tax exemption for covered construction and building materials. Local use-tax rules also exempt these materials. Carriers must operate in interstate or foreign commerce. The materials must support a government contract allowing public passenger rail service on the railroad's property or tracks.
Research tax credits for zone businesses
Beginning with tax years starting in 2027, businesses can claim a credit for qualifying research in an enterprise zone. They must spend at least $150,000 on qualifying research and experimental activities for their business. The credit equals 3% of current zone spending above the average zone spending from the previous two tax years.
State agencies get tax-law implementation funding
For budget year 2026–27, the Department of Revenue receives $48,482 from the General Fund to carry out the law. That includes $20,024 for GenTax support, $15,338 for tax-services staff, and $13,120 for executive-office staff. The Governor's Office also receives $25,000 from the General Fund for economic development program administration. These appropriations fund state operations, not direct household payments.
Tax refunds for cleaner aviation fuel
For tax years beginning in 2027–2032, qualified aviation fuel buyers get at least $1.50 per gallon for Colorado use. The credit adds $0.01 per gallon for each whole percentage point of carbon reduction above 50%. Starting in 2028, the Colorado Energy Office can authorize another $0.50 per gallon for qualifying Colorado-made fuel. Buyers must reserve credits before purchase and prove qualifying purchases after the tax year; annual reservations total no more than $3 million. Unused credit is refunded, not carried forward. Fuel must be used to fuel aircraft at a Colorado airport, airfield, or airpark; exported fuel does not qualify. Tax-exempt purchasers can qualify, but producers and blenders cannot, and fuel already reserved by an airport cannot receive another credit. The credit section is repealed December 31, 2038.
Tax relief continues for beetle-damaged wood
The law extends sales and use tax relief for salvaged wood from Colorado trees killed or infested by mountain pine or spruce beetles. The exemption covers sales, storage, and use during the law's specified periods, including the period before January 1, 2031. The section is repealed July 1, 2034.
Tax-exempt food purchasers must file returns
Purchasers exempt from Colorado income tax must file a return to claim the small food business credit. This filing step does not require them to pay income tax.
Clean aviation fuel producers lose credits
The sustainable aviation fuel facility credit ends for tax years starting January 1, 2027, or later. Its 30% rate covers Colorado facilities whose construction starts from January 1, 2024, through December 31, 2026. Later rates of 24%, 18%, and 12% are removed. Statewide certificates are capped at $1 million for 2024 and $2 million annually for 2025 and 2026. The section sunsets December 31, 2033.
Corporations lose certain wage tax deductions
For tax years starting January 1, 2027, or later, Colorado C corporations lose a state subtraction for certain wages. The change covers wages and salaries whose federal deduction is disallowed under federal tax credit coordination rules. Losing this subtraction can raise affected corporations' Colorado taxable income and tax bills.
Foreign corporations face audited income rules
Starting with tax years beginning in 2027, covered foreign corporations in Colorado combined groups must calculate income from independently audited statements. Statements must be prepared separately for each company, adjusted to U.S. accounting and tax rules, and translated into U.S. dollars. The prior calculation rule is repealed December 31, 2031.
Fuel distributors lose tax allowances
For tax periods starting in 2027, licensed gasoline and special-fuel distributors' transit and unloading loss allowance falls from 2% to 1%. Monthly acquisitions must be documented by terminal manifests. The allowance excludes liquefied petroleum gas and bulk transfers. Distributors also lose the 0.5% deduction for payment expenses and bad debts. The law does not set a household fuel-price increase.
Larger zone employers lose employee credits
Starting with tax years beginning in 2027, businesses with 50 or more facility employees cannot claim the affected enterprise-zone employee credit. Reaching 50 employees at any time during the year blocks the credit for that entire year.
Old zone research credit rules end
The prior enterprise-zone research and experimental activities credit provision is repealed December 31, 2033. That provision covers tax years beginning before January 1, 2027. The supplied provision does not explain how unused credits are treated after repeal.
Tobacco businesses lose tax collection discounts
Starting in 2027, cigarette wholesalers lose the 3% inventory-tax discount and 0.4% cigarette tax-stamp discount. Tobacco distributors and remote retail sellers lose the 1.6% discount on eligible tax collected January 1, 2027, or later. Nicotine distributors lose the 1.1% discount for tax periods beginning on that date or later. Before the cutoff, inventory payments must be timely, and stamp payments are due by the next month's tenth day to earn discounts. The tobacco discount excludes the specified additional statutory and constitutional taxes.
Zone businesses lose vehicle investment credits
The enterprise-zone commercial vehicle credit is repealed effective December 31, 2026. Starting with tax years beginning in 2027, the zone investment credit also excludes specified heavy vehicles classified as Class A personal property. This exclusion covers commercial trucks, truck tractors, tractors, and semitrailers with gross vehicle weight ratings of at least 54,000 pounds.
Children's health funding shifts state accounts
For budget year 2026–27, the law shifts $332 for Children's Basic Health Plan medical and dental costs. General Fund support falls by $332, while support from the plan's trust fund rises by $332. The reduction is not required if the specified General Fund appropriation is below $332 or the department receives no annual appropriation. The provision does not change personal eligibility or benefit amounts.
Medicaid funding shifts between state accounts
For budget year 2026–27, the law reduces General Fund support for Medicaid medical and long-term care by $52,560. It adds the same amount from cash funds: $50,900 from the health care expansion fund and $1,660 from the tobacco tax cash fund. The General Fund reduction is not required if its specified appropriation is below $52,560 or the department receives no annual appropriation. This funding-source change does not establish new personal benefit amounts or eligibility rules.
Clean energy developers share credit capacity
Beginning July 1, 2026, the Colorado Energy Office can shift unused credit capacity between industrial clean energy and geothermal programs. Each increase requires an equal decrease in the other program; combined limits do not rise. When geothermal spending falls below a reservation, the office can reserve the excess for that taxpayer later or another applicant. No geothermal reservations are allowed for tax years starting January 1, 2033, or later.
Corporate filing choice brings long commitment
Beginning with tax years starting in 2027, qualifying corporate groups can choose water's-edge filing for their Colorado combined report. They must make the choice on a timely original return. The choice generally binds the group for that year and the next nine tax years. Groups must include the specified members' income and tax-allocation factors, and follow renewal and withdrawal rules.
Corporate reporting lists add foreign jurisdictions
For tax years beginning in 2027 or later, Colorado's combined-reporting list adds Hong Kong, Ireland, the Netherlands, and Singapore. Liechtenstein appears on the 2026 list but not the stated 2027-and-later list. These additions and removal change reporting treatment for corporations with affiliates in the affected jurisdictions.
Renewable investors can choose smaller refunds
Beginning with tax years starting in 2027, eligible enterprise-zone renewable energy investors can elect an 80% credit refund. The option covers qualifying new investments placed in service during 2015–2020 or on or after January 1, 2027. Investors choosing the refund give up the remaining 20% of the credit.
Space businesses face temporary sales taxes
Qualified space-flight property is exempt from Colorado sales and use tax from July 1, 2024, through December 31, 2026. The exemption stops from January 1, 2027, through December 31, 2029. It resumes for sales, storage, and use starting January 1, 2030.
Truck buyers face fewer forecast cuts
The law ends repeated June revenue checks through June 2027 for specified innovative truck credits. It keeps the June 2025 forecast trigger. Revenue growth below 4% in that forecast cuts covered credits by 50% for the affected tax year. A reduced credit of $500 or less is unavailable.
Vehicle credit ends; state money shifts
The commercial vehicle fund balance offsets the enterprise-zone commercial vehicle credit on July 1, 2025, and July 1, 2026. The law ends that credit January 1, 2027. On July 1, 2027, all remaining fund money moves to the Colorado Economic Development Fund. Starting that same day, covered traffic-penalty balances go to the General Fund after the issuing jurisdiction keeps its authorized share. This revenue shift does not change the traffic penalty amount.
Sponsors & Cosponsors
Sponsors
Kyle Brown
Democratic • House
Lorena Garcia
Democratic • House
Mike Weissman
Democratic • Senate
Cosponsors
Andrew Boesenecker
Democratic • House
Brianna Titone
Democratic • House
Cecelia Espenoza
Democratic • House
Emily Sirota
Democratic • House
Jennifer Bacon
Democratic • House
Javier Mabrey
Democratic • House
Julie McCluskie
Democratic • House
Jenny Willford
Democratic • House
Karen McCormick
Democratic • House
Kenny Nguyen
Democratic • House
Lesley Smith
Democratic • House
Mandy Lindsay
Democratic • House
Manny Rutinel
Democratic • House
Naquetta Ricks
Democratic • House
Steven Woodrow
Democratic • House
Tammy Story
Democratic • House
Yara Zokaie
Democratic • House
Sen. A. Benavidez
Affiliation unavailable
Cathy Kipp
Democratic • Senate
Iman Jodeh
Democratic • Senate
James Coleman
Democratic • Senate
Julie Gonzales
Democratic • Senate
Lisa Cutter
Democratic • Senate
Marc Snyder
Democratic • Senate
Roll Call Votes
Senate vote • 5/13/2026
Third reading: Amend (l.082)
Yes: 35 • No: 0
Senate vote • 5/13/2026
Third reading: Amend (l.081)
Yes: 35 • No: 0
House vote • 5/13/2026
Senate amendments: Concur
Yes: 36 • No: 26
House vote • 5/13/2026
Senate amendments: Repass
Yes: 37 • No: 25
Senate vote • 5/13/2026
Third reading: Bill
Yes: 22 • No: 13
Senate vote • 5/12/2026
Committee of the whole: Cow * (s.001)
Yes: 17 • No: 18
Senate vote • 5/12/2026
Committee of the whole: Cow * (s.002)
Yes: 17 • No: 18
Senate vote • 5/11/2026
Refer House Bill 26-1289, as amended, to the Committee of the Whole.
Yes: 4 • No: 3
Senate vote • 5/11/2026
Adopt amendment L.073
Yes: 4 • No: 3
Senate vote • 5/7/2026
Refer House Bill 26-1289, as amended, to the Committee on Appropriations.
Yes: 5 • No: 4
Senate vote • 5/7/2026
Adopt amendment L.068 (Attachment Q)
Yes: 3 • No: 6
Senate vote • 5/7/2026
Adopt amendment L.069 (Attachment O)
Yes: 6 • No: 3
House vote • 5/4/2026
Third reading: Bill
Yes: 42 • No: 23
House vote • 5/1/2026
Committee of the whole: Amd (h.001)
Yes: 19 • No: 36
House vote • 5/1/2026
Refer House Bill 26-1289, as amended, to the Committee of the Whole.
Yes: 8 • No: 3
House vote • 5/1/2026
Adopt amendment L.035
Yes: 8 • No: 3
House vote • 5/1/2026
Committee of the whole: Amd (h.002)
Yes: 21 • No: 34
House vote • 3/23/2026
Adopt amendment L.010
Yes: 5 • No: 6
House vote • 3/23/2026
Adopt amendment L.009
Yes: 5 • No: 6
House vote • 3/23/2026
Adopt amendment L.001
Yes: 7 • No: 3
House vote • 3/23/2026
Refer House Bill 26-1289, as amended, to the Committee on Appropriations.
Yes: 6 • No: 5
Actions Timeline
Governor Signed
6/3/2026HouseSigned by the Speaker of the House
5/29/2026HouseSigned by the President of the Senate
5/29/2026SenateSent to the Governor
5/29/2026HouseSenate Third Reading Passed with Amendments - Floor
5/13/2026SenateHouse Considered Senate Amendments - Result was to Concur - Repass
5/13/2026HouseSenate Second Reading Special Order - Passed with Amendments - Committee
5/12/2026SenateSenate Committee on Appropriations Refer Amended to Senate Committee of the Whole
5/11/2026SenateSenate Second Reading Special Order - Laid Over Daily - No Amendments
5/11/2026SenateSenate Committee on Finance Refer Amended to Appropriations
5/7/2026SenateHouse Third Reading Passed - No Amendments
5/4/2026HouseIntroduced In Senate - Assigned to Finance
5/4/2026SenateHouse Committee on Appropriations Refer Amended to House Committee of the Whole
5/1/2026HouseHouse Second Reading Special Order - Passed with Amendments - Committee, Floor
5/1/2026HouseHouse Committee on Finance Refer Amended to Appropriations
3/23/2026HouseIntroduced In House - Assigned to Finance
2/23/2026House
Bill Text
Engrossed
Final Act
House Appropriations Preamend
House Finance Preamend
Introduced
Reengrossed
Rerevised
Revised
Senate Appropriations Preamend
Senate Finance Preamend
Signed Act
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