HB 25B-1002 Summary

• Expands Colorado's "listed jurisdictions" for corporate income tax purposes starting January 1, 2026, adding Hong Kong, Republic of Ireland, Liechtenstein, Netherlands, and Singapore to the existing list of tax avoidance jurisdictions.

• Requires corporations to add back federal Foreign-Derived Deduction Eligible Income (FDDEI) deductions to Colorado taxable income for tax years beginning after December 31, 2025, to discourage tax avoidance by corporations with majority property and investments outside Colorado.

• Allows the executive director to determine that a corporation incorporated in a listed jurisdiction meets the federal economic substance doctrine, exempting it from the presumption of tax avoidance.

• Modifies treatment of section 78 dividends and global intangible low-taxed income (GILTI) to exclude amounts from corporations incorporated in foreign jurisdictions for tax avoidance purposes.

• Declares the FDDEI add-back produces only incidental and de minimis revenue increases, arguing it does not constitute a new tax requiring voter approval under TABOR.