republic-os/legislation/us/states/co/2021a/hb-21-1327.md

---
type: "Bill"
title: "State And Local Tax Parity Act For Businesses"
description: "The 2017 federal \"Tax Cuts and Jobs Act\" placed a cap of $10,000 on the amount of state and local taxes paid that an individual can deduct on their federal taxes. This limitation did not apply to C corporations. Consequently, businesses organized as pass-through entities like S corporations and partnerships pay increased taxes on business profits compared to C corporations because pass-through entities pay taxes on business profits at the individual (partner or shareholder) level.For income tax years commencing on or after January 1, 2022, the act allows pass-through entities to elect to pay their state income tax at the entity level so that the pass-through entity can claim an unlimited deduction at the federal level of state and local taxes paid; except that the election is only allowed in an income tax year where there is a limitation on the deductions allowed to individuals under section 164 of the internal revenue code.While this reduces federal taxable income for the pass-through entity, it does not reduce Colorado taxable income because, under current law, the individual and the partnership are required to add back any state and local taxes deducted at the federal level.The act adds an appropriation for the department of revenue to implement the taxpayer's election to pay their state income tax at the entity level.(Note: This summary applies to this bill as enacted.)"
jurisdiction: "us/states/co"
legislature: "Colorado General Assembly"
session: "2021A"
identifier: "HB 21-1327"
citation: "Colorado HB 21-1327 (2021A)"
classification: ["bill"]
subjects: []
status: "enacted"
primary_sponsors: ["Chris Kolker", "David Ortiz", "Kevin Van Winkle", "Rob Woodward"]
version_count: 9
action_count: 14
vote_count: 2
first_action: "2021-06-01T06:00:00+00:00"
last_action: "2021-06-23T06:00:00+00:00"
source: "openstates"
source_identifier: "ocd-bill/0fef8660-d90c-48b8-a6d0-b351ae2453e6"
source_url: "http://leg.colorado.gov/bills/hb21-1327"
source_hash: "2144c4c39aac964af53c3b0eff896dfbfc1ceb8918a651c2382778bf218ed732"
vintage: "2026-07-01"
source_snapshot: "https://data.openstates.org/daily/2026-07-01/public.pgdump"
retrieved_at: "2026-07-06"
confidence: "reported"
tags: ["legislation", "bill", "us-co"]
---

# Colorado HB 21-1327 (2021A) — State And Local Tax Parity Act For Businesses

The 2017 federal "Tax Cuts and Jobs Act" placed a cap of $10,000 on the amount of state and local taxes paid that an individual can deduct on their federal taxes. This limitation did not apply to C corporations. Consequently, businesses organized as pass-through entities like S corporations and partnerships pay increased taxes on business profits compared to C corporations because pass-through entities pay taxes on business profits at the individual (partner or shareholder) level.For income tax years commencing on or after January 1, 2022, the act allows pass-through entities to elect to pay their state income tax at the entity level so that the pass-through entity can claim an unlimited deduction at the federal level of state and local taxes paid; except that the election is only allowed in an income tax year where there is a limitation on the deductions allowed to individuals under section 164 of the internal revenue code.While this reduces federal taxable income for the pass-through entity, it does not reduce Colorado taxable income because, under current law, the individual and the partnership are required to add back any state and local taxes deducted at the federal level.The act adds an appropriation for the department of revenue to implement the taxpayer's election to pay their state income tax at the entity level.(Note: This summary applies to this bill as enacted.)

## Version chain

The bill's text revisions, in order — the diff chain from filing to enrollment.

1. **Committee Amendment** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/2021a_hb1327_s_sa_001.pdf)
2. **Engrossed (06/04/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327_eng.pdf)
3. **Final Act (06/22/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327_enr.pdf)
4. **Introduced (06/01/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327_01.pdf)
5. **PA1 (06/04/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327app_01.pdf)
6. **Reengrossed (06/07/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327_ren.pdf)
7. **Rerevised (06/08/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327_rer.pdf)
8. **Revised (06/07/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/documents/2021A/bills/2021a_1327_rev.pdf)
9. **Signed Act (06/23/2021)** (committee substitute) — [source](http://leg.colorado.gov/sites/default/files/2021a_1327_signed.pdf)

## Votes

- BILL — **34–0** (pass) · upper
- BILL — **59–5** (pass) · lower

## Sponsors

- Chris Kolker — primary (person)
- David Ortiz — primary (person)
- Kevin Van Winkle — primary (person)
- Rob Woodward — primary (person)

## Timeline

The legislative action history — every referral, reading, and vote.

- **2021-06-23T06:00:00+00:00** Governor Signed `executive-signature`
- **2021-06-22T06:00:00+00:00** Sent to the Governor `executive-receipt`
- **2021-06-22T06:00:00+00:00** Signed by the Speaker of the House
- **2021-06-22T06:00:00+00:00** Signed by the President of the Senate
- **2021-06-08T06:00:00+00:00** Senate Third Reading Passed - No Amendments `passage, reading-3`
- **2021-06-07T06:00:00+00:00** Senate Second Reading Special Order - Passed - No Amendments
- **2021-06-07T06:00:00+00:00** Senate Committee on Appropriations Refer Unamended - Consent Calendar to Senate Committee of the Whole `committee-passage`
- **2021-06-07T06:00:00+00:00** Senate Committee on State, Veterans, & Military Affairs Refer Unamended to Appropriations `referral-committee`
- **2021-06-07T06:00:00+00:00** Introduced In Senate - Assigned to State, Veterans, & Military Affairs `introduction`
- **2021-06-07T06:00:00+00:00** House Third Reading Passed - No Amendments `passage, reading-3`
- **2021-06-07T06:00:00+00:00** House Second Reading Passed with Amendments - Committee `reading-2`
- **2021-06-04T06:00:00+00:00** House Committee on Appropriations Refer Amended to House Committee of the Whole `committee-passage, referral-committee`
- **2021-06-03T06:00:00+00:00** House Committee on Finance Refer Unamended to Appropriations `referral-committee`
- **2021-06-01T06:00:00+00:00** Introduced In House - Assigned to Finance `introduction`

## Source

OpenStates / OpenCivicData bulk snapshot [2026-07-01](https://data.openstates.org/daily/2026-07-01/public.pgdump); origin `ocd-bill/0fef8660-d90c-48b8-a6d0-b351ae2453e6`. Confidence: reported (aggregated from official Colorado legislature records).