First Regular Session

Sixty-first General Assembly

LLS NO. 97­0136.01 MKD HOUSE BILL 97­1236

STATE OF COLORADO

BY REPRESENTATIVES Lamborn and Salaz.

FINANCE

A BILL FOR AN ACT

CONCERNING THE REDUCTION OF THE STATE INCOME TAX RATE.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Lowers the state income tax rate imposed on individuals, estates, trusts, domestic C corporations, and foreign C corporations doing business in Colorado from 5% to 4:% for income tax years commencing on or after January 1, 1999. Refers the question of such income tax rate reduction to the electors of Colorado at the next general election.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  39­22­104 (1), Colorado Revised Statutes, 1994 Repl. Vol., is amended, and the said 39­22­104 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:

39­22­104.  Income tax imposed on individuals, estates, and trusts ­ single rate. (1)  Subject to subsection (2) of this section, with respect to taxable years commencing on or after January 1, 1987, BUT PRIOR TO JANUARY 1, 1999, a tax of five percent is imposed on the federal taxable income, as determined pursuant to section 63 of the internal revenue code, of every individual, estate, and trust.

(1.5)  SUBJECT TO SUBSECTION (2) OF THIS SECTION, WITH RESPECT TO TAXABLE YEARS COMMENCING ON OR AFTER JANUARY 1, 1999, A TAX OF FOUR AND THREE­QUARTERS PERCENT IS IMPOSED ON THE FEDERAL TAXABLE INCOME, AS DETERMINED PURSUANT TO SECTION 63 OF THE INTERNAL REVENUE CODE, OF EVERY INDIVIDUAL, ESTATE, AND TRUST.

SECTION 2.  39­22­301 (1) (d) (I) (G), Colorado Revised Statutes, 1994 Repl. Vol., is amended, and the said 39­22­301 (1) (d) (I) is further amended BY THE ADDITION OF A NEW SUB­SUBPARAGRAPH, to read:

39­22­301.  Corporate tax imposed.  (1) (d) (I)  A tax is imposed upon each domestic C corporation and foreign C corporation doing business in Colorado annually in an amount of the net income of such C corporation during the year derived from sources within Colorado as set forth in the following schedule of rates:

(G)  For income tax years commencing on or after July 1, 1993, BUT PRIOR TO JANUARY 1, 1999, five percent of the Colorado net income.

(H)  FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 1999, FOUR AND THREE­QUARTERS PERCENT OF THE COLORADO NET INCOME.

SECTION 3.  Refer to people under referendum. This act shall be submitted to a vote of the registered electors of the state of Colorado at the next biennial regular general election, for their approval or rejection, under the provisions of the referendum as provided for in section 1 of article V of the state constitution, and article 40 of title 1, Colorado Revised Statues. Each elector voting at said election and desirous of voting for or against said act shall cast a vote as provided by law either "Yes" or "No" on the proposition: "SHALL THE STATE INCOME TAX RATE IMPOSED ON INDIVIDUALS, ESTATES, TRUSTS, AND CORPORATIONS DOING BUSINESS IN COLORADO BE LOWERED FROM FIVE PERCENT TO FOUR AND THREE­QUARTERS PERCENT FOR INCOME TAX YEARS COMMENCING OR AFTER JANUARY 1, 1999?" The votes cast for the adoption or rejection of said act shall be canvassed and the result determined in the manner provided by law for the canvassing of voters for representatives in Congress.