With the approaching June 7, 2024, deadline for Gov. Jared Polis to sign or veto bills passed in the 74th regular session of the Colorado General Assembly, the curtain falls on another law-making session, creating an opportunity to look back on the strides made, the challenges faced, and the implications for Colorado accounting professionals. 

From sales tax simplification to workforce development and the integration of artificial intelligence (AI) in consumer protections, the session was marked by a variety of noteworthy developments.

Sales & Use Tax Simplification

Progress was made on the long-term effort to simplify the Colorado sales and use tax system. The COCPA has been a dedicated member of the Coalition to Simplify Colorado Sales Tax since 2015, advocating for streamlined processes. This year, legislators passed four pivotal bills, which COCPA CEO Alicia Gelinas, CPA, and other Society members supported through committee testimony: 

• HB24-1041 Streamline Filing Sales & Use Tax Returns 
• SB24-024 Local Lodging Tax Reporting on Sales Return 
• SB24-025 Update Local Government Sales & Use Tax Collection
• SB24-023 Hold Harmless for Error in GIS Database Data

While some legislators responded to requests for simplification, others aimed to use the sales tax system to accomplish affordability objectives through proposed bills to offer sales tax exemptions and sales tax holidays focused on children’s products and college textbooks. These initiatives, which would have been the first in Colorado, ultimately failed to pass through the appropriations committee due to budgetary concerns. 

Workforce Development Across Industries

Workforce development remained a top priority among legislators, with initiatives aimed at building a skilled workforce to meet the evolving demands across various sectors. Many bills included funding, expansion, and ongoing support of apprenticeship programs. 

While the accounting profession seeks to address its own talent pipeline challenges, Colorado has prioritized industries such as healthcare, construction, transportation, education, engineering, and technology. Various other sectors worked to expand flexibility through interstate mobility and licensure compacts, a privilege from which the accounting profession has benefited for more than a decade. While not challenged in 2024, the COCPA continues to monitor impacts to the CPA mobility privilege as the profession navigates potential updates to the licensure process.

Environmental Legislation and Potential Future Accounting Implications

Environmental legislation gained traction during the session, with a focus on defining long-term effectiveness and clarifying climate goals. Although no broad environmental reporting mandates were introduced, potential implications for CPAs may arise during subsequent legislative sessions or rule-making processes. The COCPA aims to monitor these developments to ensure that CPAs are prepared to navigate new reporting requirements and seize opportunities as service providers for affected businesses.

Regulating Artificial Intelligence for Consumer Protections

The rapid advancement of artificial intelligence in consumer protections captured legislative attention. The COCPA adopted a monitoring position on SB24-205 Consumer Protections for Artificial Intelligence, intended to protect consumers from discrimination in the use of AI, voicing concerns with other business stakeholders about definitions and potential unintended consequences. 

While the general assembly acknowledged the business community's tentativeness, the bold intention to be the first state to issue legislation of its kind in the use of AI was reiterated. In his bill-signing letter, Gov. Polis applauded the sponsors for good intentions and encouraged engagement with stakeholders to make improvements to the bill before its February 2026 effective date. 

Legislation at the state or federal levels concerning AI could have significant implications for CPA firms involved in AI development, deployment, and technology risk-assessment services.  

TABOR Refund Mechanism Changes

The Taxpayer’s Bill of Rights (TABOR), established in 1992, remains a unique feature of Colorado’s fiscal landscape, capping government revenue. In response to the record-high $3.73 billion TABOR surplus for the 2021-2022 tax year, legislator debates on refund mechanisms continued through 2023 and into 2024. 

Despite a failed attempt to increase TABOR revenue limits through Proposition HH on the November 2023 voter ballot, legislators convened a special session to address immediate refund decisions. Ultimately, legislators agreed to maintain the existing statutory TABOR eligibility and administration for 2023, while only temporarily overriding the tiered income-based refund amounts for flat-rate refund amounts.  

The work continued in the last week of the 2024 session, when SB24-228 TABOR Refund Mechanisms was introduced and passed,  temporarily reducing the income tax rate for 2024 from 4.40% to 4.25%, permanently changing deadlines for 2024 and beyond TABOR refund claims to Oct. 15 for all individuals, and triggering a new TABOR refund mechanism of sales tax rate adjustments upon reaching certain surplus levels. 

In partnership with the Department of Revenue, the COCPA played a crucial role in recommending changes to filing deadlines, simplifying compliance for taxpayers and their tax preparers in future years.

Affordability Through the Use of Tax Credits 

Given the revenue constraints imposed by TABOR, legislators leveraged income tax credits to promote affordability for targeted Coloradans. In its role to support policy makers, the Department of Revenue evaluated roughly 85 proposed bills this session that held potential tax impacts, with approximately half passing. As a result, new and revised line items to Colorado tax returns are anticipated, which is now the focus of the Department in its implementation. 

Notable tax credit initiatives included:

• HB24-1211 Family Affordability Tax Credit 
• HB24-1134 Adjustments to Tax Expenditures to Reduce Burden – impacting child care and earned income credits 
• HB24-1312 State Income Tax Credit for Careworkers
• HB24-1052 Senior Housing Income Tax Credit

Stakeholders across various sectors must engage in the rule-making process that will unfold as these legislative actions take root, adapt to ensure compliance, and seize opportunities for growth.   

The COCPA not only tracks and engages with proposed bills but also monitors issues from other states that could impact Colorado. Potentially harmful proposals such as fees on services, threats to CPA licensure, and heavy regulations were successfully avoided this session.

To stay informed about the bills monitored by the COCPA during the legislative session, visit the COCPA’s Bill Tracker on the COCPA advocacy page.  

To stay informed of bills and related case law challenges, consider attending the CPE series, “Navigating the Legislative Maze:  Keeping You Informed, One Bill at a Time.” 

Support the COCPA’s efforts to build productive legislative relationships and promote a collaborative advocacy landscape by donating to the CPA-Political Action Committee. As we approach the November election, your contributions are crucial for equipping and mobilizing our future advocacy efforts. Together, we can shape a future that supports our profession's growth and resilience.