First Regular Session

Sixty-first General Assembly

LLS NO. 97­0462.01 CJ SENATE BILL 97­023

STATE OF COLORADO

BY SENATOR Arnold;

also REPRESENTATIVE Salaz.

FINANCE

A BILL FOR AN ACT

CONCERNING THE REDUCTION OF STATE INCOME TAX.

Bill Summary

"State Income Tax Rate Reduction"

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

For the 1997 income tax year and each tax year thereafter, reduces from 5% to 4%:

• The state tax imposed on the federal taxable income of each individual, estate, and trust; and

• The state tax imposed on the state net income of each domestic C corporation and foreign C corporation doing business in Colorado.

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

SECTION 1.  39­22­104 (1), Colorado Revised Statutes, 1994 Repl. Vol., is amended to read:

39­22­104.  Income tax imposed on individuals, estates, and trusts ­ single rate. (1) (a)  Subject to subsection (2) of this section, with respect to taxable years commencing on or after January 1, 1987, BUT BEFORE JANUARY 1, 1997, 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.

(b)  SUBJECT TO SUBSECTION (2) OF THIS SECTION, WITH RESPECT TO TAXABLE YEARS COMMENCING ON OR AFTER JANUARY 1, 1997, A TAX OF FOUR 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 BEFORE JULY 1, 1997, five percent of the Colorado net income; AND

(H)  FOR INCOME TAX YEARS COMMENCING ON OR AFTER JULY 1, 1997, FOUR PERCENT OF THE COLORADO NET INCOME.

SECTION 3.  Safety clause.  The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.