CO HB1275

Adds definitions for "personal service corporation" and "employee-owner of a personal service corporation" using federal Internal Revenue Code standards for film production incentive purposes.

Creates new qualified local expenditure category allowing payments up to $1 million per calendar year per personal service corporation, requiring production companies to file information tax returns regarding these payments.

Eliminates withholding tax exemption for nonresidents performing film production services for less than 120 days per year, making them subject to Colorado income tax withholding requirements.

Allows production companies to avoid withholding taxes on personal service corporation payments if the corporation provides a validated taxpayer identification number that passes IRS verification, otherwise withholding is required.

Changes apply to income tax years beginning on or after January 1, 2024, with the act taking effect 90 days after final legislative adjournment unless subject to referendum petition.