Income Tax Rate Reduction

One of the mechanisms for refunding state revenues in excess of the state fiscal year spending limit imposed by the Taxpayer's Bill of Rights (TABOR) is a temporary income tax rate reduction. For any state fiscal year commencing on or after July 1, 2022, the bill makes this income tax rate reduction permanent and establishes the reduction as always equaling a .05% reduction of the current income tax rate. Thus, under the bill, every year when the executive director of the department of revenue determines it is necessary to reduce the state income tax, both the individual state income tax rate and the corporate tax rate are permanently reduced by .05%. The bill exempts the state income tax rate and corporate tax rate reduction in the bill from the otherwise required tax preference performance statement and repeal date. (Note: This summary applies to this bill as introduced.)