Summer 2021

Tracking Changes in the Computation of Colorado Corporate Taxable Income

By Mark Kozik, Co-Author

This article is reprinted with the publisher’s permission, and originally appeared in the Summer 2021 edition of JOURNAL OF STATE TAXATION, a quarterly journal published by CCH Incorporated. Copying or distribution without the publisher’s permission is prohibited.

Co-authors Mark Kozik and Bruce M. Nelson provide a discussion of recent changes in the calculation of Colorado corporate taxable income.


Outline

1. Prior to enactment of the Tax Cuts and Jobs Act (TCJA), signed into law December 22, 2017;

2. After enactment of the TCJA;

3. After enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law March 27, 2020;

4. After enactment of Colorado H.B. 20-1024, Concerning Modifications to the State’s Net Operating Loss Deduction (no short title), signed into law June 26, 2020 and Colorado H.B. 20-1420 (Tax Fairness Act), signed into law July 11, 2020; and

5. After enactment of Colorado H.B. 21-1002, Concerning Reductions to Certain Taxpayers’ State Income Tax Liability Related to State Tax Law Changes Made in 2020, and, in Connection therewith, Making an Appropriation (no short title), signed into law January 21, 2021.

States generally employ one of the two following methods in calculating corporate taxable income:

1. Moving (or rolling) conformity—the determination of state-level taxable income begins with federal taxable income as calculated for the current year under the current applicable provisions of the Internal Revenue Code.

2. Static conformity—the determination of state-level taxable income begins with federal taxable income as it would have been calculated under the Internal Revenue Code as of a specified date.

Please click here to read the full article: Tracking Changes in the Computation of Colorado Corporate Taxable Income.

Mark Kozik is of counsel in Holland & Hart’s tax practice group in Denver, Colorado. He advises clients on state and local tax matters, including income, franchise, sales, and use tax issues.

Bruce M. Nelson is a CPA with more than 35 years’ experience in state and local tax and is the Editor-in-Chief of the Journal of State Taxation.

DISCLAIMER

Unless you are a current client of Holland & Hart LLP, please do not send any confidential information by email. If you are not a current client and send an email to an individual at Holland & Hart LLP, you acknowledge that we have no obligation to maintain the confidentiality of any information you submit to us, unless we have already agreed to represent you or we later agree to do so. Thus, we may represent a party adverse to you, even if the information you submit to us could be used against you in a matter, and even if you submitted it in a good faith effort to retain us.