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3h ago

Colorado Ends Special Session With $253 Million Tax Package and AI Law Delay

Gov. Jared Polis will now propose midyear reductions using reserves to close the remainder driven by federal tax changes.

State Sen. Robert Rodriguez listens as Sen. Lisa Frizell, not pictured, speaks in the Senate chambers at the start of the final day of the special legislative session at the Colorado State Capitol in Denver, on Aug. 26, 2025. (Photo by RJ Sangosti/The Denver Post)
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Overview

  • Democratic lawmakers approved five revenue bills projected to raise about $250–253 million, roughly one-third of the $783–800 million shortfall tied to Colorado’s coupling with H.R. 1.
  • An auction of state tax credits is expected to bring in $100 million this year, with future fiscal costs estimated at about $125 million as companies prepay taxes at a discount.
  • Other measures add back the qualified business income deduction for high earners, curb foreign-derived income benefits, eliminate the home-office insurance premium rate cut, and repeal the sales-tax vendor fee.
  • Polis is set to present a plan to the Joint Budget Committee using spending cuts and a significant draw on reserves to cover the remaining gap, with reductions slated to take effect Sept. 1.
  • Lawmakers set aside $100 million to blunt projected individual-market premium hikes, authorized Medicaid reimbursement for Planned Parenthood’s non-abortion services, diverted $264,000 from wolf reintroduction, and postponed the 2024 AI rules to June 30, 2026 as Republicans signal TABOR lawsuits.