HB20-1420 (Sirota & Gray/ Moreno & Hansen) Adjust Tax Expenditures for State Education Fund
This bill would close or means-test certain state tax deductions that overwhelmingly benefit wealthy individuals and wealthy businesses, generating an estimated $180 million in revenue for the state. The bill would also expand the state Earned Income Tax Credit (EITC) from 10 percent to 15 percent of the federal credit beginning in 2022 and make the state EITC immediately accessible to families who file tax returns using an ITIN number. The remaining funds would go to the State Education Fund.
The Children’s Campaign supports this bill. As the legislature makes difficult choices about the state budget and how to support Colorado’s recovery from the COVID-19 pandemic now and into the future, this bill would bring in revenue to help our state budget and help families who, now more than ever, need support to weather the economic crisis and get back on their feet. The bill would close or means-testing certain state tax deductions that overwhelmingly benefit wealthy businesses and wealthy business owners, which will help lessen the need for cuts to important programs that benefit families and communities across Colorado. It will also take steps toward making Colorado’s tax code more fair and equitable for everyone.
The bill would also expand the state EITC and make it available to families who file taxes using an ITIN number. This will place more money back into the pockets of working families in Colorado, providing support that families need now more than ever as they work to make ends meet. The EITC is one of the most effective anti-poverty tools available. In 2018, the EITC lifted about three million children out of poverty in the United States. Last year, the EITC along with the Child Tax Credit lifted 148,800 Colorado families out of poverty.
House voted to concur with Senate amendments and repassed the bill on a vote of 40-23. The bill now heads to the governor’s desk for signature.
June 12, 2020
Passed the House on a vote of 39-26 and now heads to the Senate. Sarah Barnes, our Manager of Special Policy Initiatives, submitted testimony in support of the bill.