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HB 1004

Sale of Tax Credits

2025 First Extraordinary Session

HB 1004 permits Colorado taxpayers to sell unused tax credits to other parties, creating a secondary market and enabling broader use of tax incentives despite lower state revenue collection.

Governor Signed
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Bill Summary · HB 1004

Legislative bill overview

HB 1004 allows taxpayers in Colorado to sell unused tax credits to other individuals or entities, creating a secondary market for tax incentives. The bill establishes procedures for transferring credits and requires tracking mechanisms to prevent duplicate claims or fraud.

Why is this important

Tax credits are valuable financial tools that reduce tax liability, but many taxpayers cannot fully utilize them due to insufficient tax obligations. This bill increases the practical value of credits by allowing those who can't use them to monetize them, potentially benefiting both credit holders and those seeking tax reductions. It also affects state tax revenue projections and compliance administration.

Potential points of contention

  • Revenue impact: Enabling credit sales may reduce actual tax collections if credits are sold at discounts, affecting state budget forecasting and funding for services
  • Equity concerns: Higher-income taxpayers or businesses may have better access to buyers for credits, potentially creating disparities in who benefits from tax incentives
  • Fraud and administration: A secondary market for credits increases complexity for tax administrators in tracking ownership transfers and preventing improper use or double-counting

Compiled from official sources — confirm details with the bill’s official record.

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