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How Colorado’s making up for the ~$800M hole after the “Big Beautiful Bill.”
DENVER, Colo. — The Colorado House approved six bills Saturday aimed at closing a sudden budget hole tied to the new federal tax law. For everyday Denver-area residents, the changes mostly touch two places you’ll notice: small-business costs at the register (not the price you pay) and what you spend on private health insurance next year. The measures now move to the Senate after clearing House final votes on Aug. 23.
First, the state would end the “vendor fee” retailers keep for collecting state sales tax. Right now, stores are allowed to keep 4% of what they collect, up to $1,000 per filing period; that goes away Jan. 1, 2026. This doesn’t raise the sales-tax rate you pay in Denver, but it does remove a small reimbursement businesses have relied on to cover checkout and bookkeeping costs. Some of that added state revenue is directed to the Housing Development Grant Fund.
Second, the plan tries to keep private health-insurance bills from jumping in 2026. The state would make a $100 million, interest-free loan from the Unclaimed Property Trust Fund to the Health Insurance Affordability Enterprise, splitting the money between reinsurance (which lowers premiums) and on-exchange subsidies. If Congress extends enhanced federal tax credits past 2025, the loan wouldn’t happen; if it does, the enterprise must pay it back by 2045. This matters if you buy your own coverage in the Denver market through Connect for Health Colorado; the reinsurance piece also helps moderate rates more broadly.
Finally, the revenue patch leans more on high earners and big companies than on families. The House voted to keep Colorado’s “add-back” for the federal qualified business income deduction starting in 2026 (this applies only to individuals with income above $500,000 single or $1 million joint).
Corporations would add back a federal break tied to foreign-derived profits and face a stricter list of tax-haven countries. Insurers would lose a long-standing “home office” discount, moving premium tax from 1% to the standard 2%. The state Treasurer would also be allowed to sell certain tax credits now to raise cash for the General Fund.