Colorado Revised Statutes Title 39. Taxation § 39-22-304. Net income of corporation--legislative declaration--definitions--repeal

(b)(I) For income tax years commencing on or after January 1, 2022, in the case of a C corporation that is not incorporated in the United States, or included in a consolidated federal corporate income tax return, “federal taxable income” means the C corporation's income or loss as determined from a profit and loss statement prepared for that C corporation on a separate entity basis in the currency in which its books of account are regularly maintained, provided this profit and loss statement is subject to an independent audit, adjusted to conform to the accounting principles generally accepted in the United States for the preparation of such statements and further modified to take into account any book-tax adjustments necessary to reflect federal and state tax law. Income or loss so computed includes all income wherever derived and is not limited to items of income from sources within the United States or effectively connected income within the meaning of the internal revenue code. Items of income, expense, gain or loss, and related apportionment factors that are denominated in a foreign currency must also be translated into United States dollars on a reasonable basis consistently applied year-to-year and entity-by-entity. Unrealized foreign currency gains and losses are not recognized. Income apportioned to this state is to be expressed in United States dollars.

(II) In lieu of the procedures set forth in subsection (1)(b)(I) of this section, or in any case where it is necessary to fairly and consistently reflect the income or loss and apportionment factors of foreign operations included in a combined report, the executive director may provide for other procedures to reasonably approximate the income or loss and apportionment factors of members with foreign operations.

(e)(I) Any expenses incurred by a taxpayer with respect to expenditures made at, or payments made to, a club licensed pursuant to section 44-3-418 that has a policy to restrict membership on the basis of sex, sexual orientation, gender identity, gender expression, marital status, race, creed, religion, color, ancestry, or national origin. Any such club shall provide on each receipt furnished to a taxpayer a printed statement as follows:

(II) The general assembly finds, determines, and declares that the people of the state of Colorado desire to promote and achieve tax equity and fairness among all the state's citizens and further desire to conform to the public policy of nondiscrimination. The general assembly further declares that the provisions of this paragraph (e) are enacted for these reasons and for no other purpose.

(j)(I) For income tax years commencing on or after January 1, 2022, but before January 1, 2023, an amount equal to a federal deduction claimed for the income tax year for a food and beverage expense that exceeds fifty percent of the amount of the expense and that was allowed under section 274 (n)(2)(D) of the internal revenue code.

(II) This subsection (2)(j) is repealed, effective December 31, 2030.

(k)(I) For income tax years commencing on or after January 1, 2024, but before January 1, 2031, an amount equal to a federal deduction claimed for a business meal pursuant to section 274 (k) of the internal revenue code.

(II) This subsection (2)(k) is repealed, effective December 31, 2035.

(d)(I) Prior to January 1, 2024, the portion of any gain received during the taxable year from a qualified sale.

(II) As used in this paragraph (d), “qualified sale” means a sale, in good faith, of real or personal property to a buyer who initiates the transaction to purchase real or personal property of the seller and who had or could have obtained the power to condemn such property, if the transaction was not between persons defined in section 267(b) of the internal revenue code.  2

(III) The purpose of this paragraph (d) is, for purposes of Colorado income tax, to accord a seller in a qualified sale the same treatment received by a taxpayer under section 1033 of the internal revenue code 3 relating to gains from involuntary conversion, even though said seller does not qualify under said section 1033 due to the absence of condemnation or the threat or imminence thereof and the buyer of the property purchased initiates the transaction. The executive director shall promulgate such reasonable rules and regulations as are necessary to accomplish the purpose of this paragraph (d).

(IV) This subsection (3)(d) is repealed, effective December 31, 2028.

(h)(I) Prior to January 1, 2024, an amount equal to the difference between the depletion allowance permitted under the internal revenue code for oil shale and an amount which would be permitted as the depletion allowance for oil shale if: The percentage depletion rate were twenty-seven and one-half percent; and the crushing, retorting, condensing, and other processes by which oil, gas, or both oil and gas are removed from oil shale, were deemed to be treatment processes considered as mining.

(II) This subsection (3)(h) is repealed, effective December 31, 2028.

(k)(I) Prior to January 1, 2025, any amount contributed to a medical savings account pursuant to section 39-22-504.7(2)(e), to the extent such amount is not claimed as a deduction on the taxpayer's federal tax return.

(II) This subsection (3)(k) is repealed, effective December 31, 2028.

(IV) As used in this subsection (3)(p), unless the context otherwise requires:

(A) “CARES Act” means the March 2020 “Coronavirus Aid, Relief, and Economic Security Act”, Pub.L. 116-136.

(B) “Colorado taxable income” means federal taxable income as modified by this article 22 without regard to this subsection (3)(p).

(C) “Retroactive provisions of the CARES Act” means the changes made to the internal revenue code in sections 2306 and 2307 of the CARES Act.

(D) “Taxable income for the modified specified tax years” means the taxpayer's Colorado taxable income for tax years ending before March 27, 2020, as calculated under the internal revenue code and Colorado law applicable to the taxpayer's return as of the date the return was due, as modified by the application of the retroactive provisions of the CARES Act applied to the calculation of the taxpayer's federal taxable income, but only to the extent the taxpayer appropriately applied those provisions to the taxpayer's federal income tax returns for each tax year.

(E) “Taxable income for the specified tax years” means the taxpayer's Colorado taxable income for tax years ending before March 27, 2020, as calculated under Colorado law applicable to the taxpayer's return as of the date the return was due.

(q)(I) Any amount included in federal taxable income pursuant to section 951 (a) of the internal revenue code with respect to a controlled foreign corporation that is a C corporation incorporated in a foreign jurisdiction for the purpose of tax avoidance pursuant to section 39-22-303(8)(b)(II); and

(II) The amount of any global intangible low-taxed income included in federal taxable income pursuant to section 951A (a) of the internal revenue code with respect to a controlled foreign corporation that is a C corporation incorporated in a foreign jurisdiction for the purpose of tax avoidance pursuant to section 39-22-303(8)(b)(II), less any amount deducted under section 250 (a)(1)(B) of the internal revenue code with respect to such global intangible low-taxed income.