Rep. Neguse, Sen. Bennet Lead Colorado Delegation in Letter Urging IRS to Not Tax Tabor Refunds

Lafayette, CO — Today, Colorado Congressman Joe Neguse (D-CO), who previously served as Executive Director of Colorado’s Department of Regulatory Agencies, led a letter with Senator Michael Bennet (D-CO) urging the Internal Revenue System (IRS) to not tax Colorado Taxpayer’s Bill of Rights (TABOR) refunds—as has been precedent for the past thirty years. The letter was co-signed by the members of Colorado's congressional delegation, including U.S. Senators Michael Bennet and John Hickenlooper, and Representatives DeGette, Crow, Caraveo, Pettersen, Buck, and Lamborn. 

This letter follows a new IRS policy proposal that would force Coloradans to pay taxes on future TABOR refunds. This proposal would reverse a 30-year precedent. 

“We urge the IRS not to abandon 30 years of precedent, and we hope you can resolve the current ambiguity so that Colorado’s taxpayers do not face further confusion to say nothing of the nightmarish burden of an unprecedented tax. We would welcome the opportunity to meet with you at your earliest convenience to discuss this matter,” the lawmakers wrote. 

The TABOR Amendment was approved by voters in 1992, and since that time, the State of Colorado has refunded excess revenue generated by the state to the taxpayers.

Earlier this year, Congressman Neguse and Senator Bennet led a successful letter calling on the IRS to not tax TABOR payments. 

Read the full letter HERE and below: 

August 31, 2023

Dear Commissioner Werfel:

As you consider how to apply recent Internal Revenue Service (IRS) guidance (Notice 2023-56) to Colorado, we urge you not to tax Colorado Taxpayer’s Bill of Rights (TABOR) refunds. Colorado passed the TABOR amendment in 1992, limiting the amount of tax revenue retained by the State and refunding the excess revenue to our taxpayers. The IRS has never treated TABOR refunds as income subject to tax. The IRS’s historical practice makes good sense in lieu of its traditional recognition of states’ prerogatives to design and administer tax refunds. The IRS should not change course now.

We urge the IRS not to abandon 30 years of precedent, and we hope you can resolve the current ambiguity so that Colorado’s taxpayers do not face further confusion to say nothing of the nightmarish burden of an unprecedented tax. We would welcome the opportunity to meet with you at your earliest convenience to discuss this matter.

Sincerely,

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