CO HB1003

State auditor evaluations found the reduced insurance premium tax rate for companies with home offices in Colorado failed to meet its intended purpose of incentivizing workforce presence, as 15 of 18 insurers claiming the tax expenditure reduced their Colorado workforce by about 4,300 employees from 2022-2024 while tax benefits increased approximately $17,500,000.

For direct written premiums in 2025, companies maintaining a home office or regional home office in Colorado maintain a one percent tax rate; beginning January 1, 2026, the tax rate increases to two percent.

All provisions providing reduced tax rates for companies with home offices in Colorado are repealed effective December 31, 2026.

The bill declares that any revenue increase from this change is incidental and de minimis to the primary purpose of aligning Colorado's insurance premium tax code with other states and does not constitute a new tax requiring voter approval.