Tax Incentives for Employee-Owned Businesses

Version header changed from 'REREVISED' to 'REVISED' with updated text indicating amendments were adopted on second reading in the Second House instead of all amendments adopted in the Second House.

Added requirement that bills creating new tax expenditures must include a tax preference performance statement as part of a statutory legislative declaration.

Expanded the purpose declaration for the income tax subtraction to explicitly mention employee stock ownership plans and employee ownership trusts as designated behaviors to induce.

Added Senate co-sponsors (Baisley, Amabile, Catlin, Daugherty, Exum, Hinrichsen, Jodeh, Liston, Michaelson Jenet, Mullica, Roberts, Snyder, Weissman, Winter F.) to the original House sponsors.

Added Appropriations committee to Senate committee assignments.

Removed 'PREAMENDED' and 'This Unofficial Version Includes Committee Amendments Not Yet Adopted on Second Reading' header, replaced with 'REREVISED' and 'This Version Includes All Amendments Adopted in the Second House'.

Updated bill summary dates and locations to reflect 3rd Reading Unamended status in Senate (May 5, 2025) and House (April 28, 2025), and Amended 2nd Reading dates for House (April 25, 2025) and Senate (May 2, 2025).

Added a requirement for the Colorado Office of Economic Development to establish and post on its website the total amount of capital gains that may be subtracted from an owner's federal taxable income.

Reorganized the definitions section to add a new definition for 'Office' referring to the Colorado Office of Economic Development.

Removed the previous definition for 'Qualifying Capital Gains' which referenced Internal Revenue Code Section 1222(11).

Added a deadline of June 30, 2026, for the Office to establish the tracking system for capital gains subtractions.

Added Senate sponsorship information and committee assignments (Business Affairs & Labor and Finance) to reflect joint legislative action.

Changed document header from 'HOUSE BILL' to 'PREAMENDED' to indicate inclusion of unadopted committee amendments.

Reorganized bill structure to include a bill summary section explaining the tax incentive provisions.

Removed original House-only sponsorship list and replaced with combined House and Senate sponsorship format.

Added page numbers and formatting markers (shading, underlining) to indicate House and Senate amendments.

Deleted language requiring the General Assembly and State Auditor to measure the effectiveness of the tax subtraction based on the number and aggregate amount of subtractions claimed.

Corrected capitalization of subsection references from uppercase (e.g., (3)(S)) to lowercase (e.g., (3)(s)) to match the bill's formatting standards.

Added extra spacing before certain subsection descriptions to improve document formatting consistency.

Added Senate sponsors (Bridges, Baisley, Amabile, Catlin, Daugherty, Exum, Hinrichsen, Jodeh, Liston, Michaelson Jenet, Mullica, Roberts, Snyder, Weissman, Winter F.) to the bill sponsorship section.

Added House sponsor English, Jackson, and McCluskie to the bill sponsorship list.

Reformatted bill text to reflect proper legislative markup conventions, including page numbers and section headers.

Added new House sponsors: Bird, Boesenecker, Camacho, Carter, Clifford, Duran, Gonzalez R., Lieder, Lukens, McCluskie, Paschal, Ricks, Soper, Stewart K., and Titone.

Updated the bill header from 'Engrossed' to 'Reengrossed' and modified the legislative note to indicate a summary will be available on April 28, 2025, after third reading.

Removed the requirement for the Office to establish and post on its website the total amount of capital gains that may be subtracted from an owner's federal taxable income by June 30, 2026.

Added a new requirement for the Colorado Office of Economic Development to establish and post on its website the total amount of capital gains that may be subtracted from an owner's federal taxable income, to be completed on or before June 30, 2026.

Removed the provision that repealed the tax subtraction effective July 1, 2042, meaning the tax break will no longer automatically expire on that date.

Reorganized and clarified definitions related to 'qualified sale' and 'qualified taxpayer' to better align with the employee-owned business conversion context.