Colorado Capitol Report

Tax Expenditure Committee Approves Bills for 2020 Legislative Session

Tax Expenditure Committee Approves Bills for 2020 Legislative Session

The Legislative Tax Expenditure Review Committee met and discussed nineteen (19) bill drafts that it had directed the Legislative Legal Services staff to prepare during its last meeting. The Committee has a limit of five (5) bills that it can move forward and be considered during the upcoming 2020 Legislative Session. Actions taken by the Committee are described below:

The Committee approved five (5) bills and sent those bills to the Executive Committee of the Legislative Council for review and potential approval on November 15th. If approved, the bills will be introduced and debated during the 2020 Legislative Session. The five (5) bills and corresponding fiscal analyses include:

  • Bill #8– Tax Expenditure Bill Requirements (Bill sponsors: Senators Court, Tate; Reps. Benavidez, Snyder) – fiscal analysis
  • Bill #11– Long-term Lodging Sales Tax Exemption (Bill sponsors: Rep. Benavidez; Senator Moreno) – fiscal analysis
  • Bill #15– Net Operating Loss Deduction Modification (Bill sponsors: Reps. Benavidez, Snyder; Senators Moreno, Court) – fiscal analysis
  • Bill #18– Legislative Oversight Committee Concerning Tax Policy (Bill sponsors: Senators Court, Tate, Moreno; Rep. Benavidez, Bockenfeld) – fiscal analysis
  • Bill #19– Sales Tax Exemption Industrial & Manufacturing Energy Use (Bill sponsors: Rep. Benavidez; Senators Court, Tate) – fiscal analysis

Of the remaining bill drafts, five were sent to the Statutory Revision Committee based on a determination that the tax credits/exemptions are now obsolete. The repeal of those credits/exemptions will be included in the final “Revisor” bill which is adopted during the final days of each Legislative Session and include:

  • Bill #6 – Crop Hail Insurance Premium Exemption
  • Bill #7 – Non-Profit Transit Authority Agency Fuel Tax
  • Bill #10 – Residents of Bordering States Sales Tax Exemption
  • Bill #12 – Repeal of Pre-1987 Net Operating Loss Deduction
  • Bill #13 – Previous Taxed Income Gain Deduction C Corporation

Finally, the Committee approved a letter to be sent to the Joint Agricultural Committee regarding two (2) agriculture tax credits/exemptions allowing the Joint Agricultural Committee members to review the credits/exemptions and decide whether they should be repealed or modified. They include:

  • Bill #9 – Farm Close Out Sales Tax Exemption
  • Bill #14 – Crop & Livestock Contribution Tax Credit

Please contact Loren Furman at [email protected] with any questions/concerns regarding this matter. Any tax related bills, including those listed above, that are introduced during the 2020 Legislative Session will be discussed and voted on during our upcoming Colorado Chamber Tax Council meetings.

Are You Ready for Federal Labor Changes?

The U.S. Department of Labor (DOL) is seeking to ensure business owners, leaders and HR managers are ready to comply with upcoming federal labor law changes in 2020.

  • Overtime Rule

The new $35,568 overtime income threshold will be effective January 1, 2020.

Due to an overwhelming response from employers, DOL’s Wage & Hour Division will be hosting two additional webinars on the final overtime rule, at 1pm ET on Nov. 12 and Nov. 19.  If you are interested in learning more but are not able to participate on these dates, a recording of the webinar will be posted on the DOL’s overtime website.

Quick background: As of Jan. 1, employees making less than $35,568 annually (or $684 weekly) must now be eligible for overtime from employers and are deemed ‘non-exempt.’  The ‘highly-compensated’ category threshold for employees will shift to $107,432.

  • NEW! Proposed Changes to Tipping Standard in FLSA

The DOL and Small Business Administration(SBA) are seeking comment on newly proposed changes to tipping practices within the Fair Labor Standards Act (FLSA).  Both agencies are seeking public comments and input from employers and industries where tips are part of employee wages.  Feedback is due to the DOL by 12/midnight ET on December 9, 2019. Click here to electronically file comments or the Federal Register notice of the proposed rule.

According to the SBA:

  • “The Act prohibits employers, managers, and supervisors from keeping tips received by employees; regardless of whether the employers take a tip credit or not. 
  • This proposed rule does not change the requirements for employers taking a tip credit, which allows these employers to implement a tip pool among those employees like the bartenders and servers who “customarily and regularly receive tips.” 
  • The proposed rule allows employers who pay the full minimum wage (and do not take a tip credit) to implement a mandatory “nontraditional” tip pool in which employees who do not customarily and regularly receive tips, such as cooks and dishwashers, may participate. 
  • The proposed rule eliminates the “80/20 rule,” which required the employers to pay tipped employees the minimum wage, if the employee spends more than 20 percent of his or her time performing non-tipped duties.   The proposed rule allows employers to take a tip credit for any amount of time that an employee in a tipped occupation performs non-tipped duties contemporaneously with his or her tipped duties, or for a reasonable time immediately before or after performing the tipped duties.”

If you have any questions about these federal labor issues or general federal policy topics, contact Leah Curtsinger, Federal Policy Director, (303) 866-9641 or [email protected].