Lawsuit Filed Against Colorado Governor Over Overtime Taxation
A conservative advocacy group, Advance Colorado, along with state Senator Barbara Kirkmeyer and others, has filed a lawsuit against Governor Jared Polis and the head of Colorado’s tax agency. The lawsuit, submitted to Denver District Court, challenges the legality of House Bill 1296, which mandates the taxation of overtime pay in response to recent federal tax changes.
The plaintiffs allege that HB-1296 violates the state’s Taxpayer’s Bill of Rights (TABOR), which necessitates voter approval for any new taxes. Signed into law by Polis in May, the legislation aims to ensure that overtime taxes are collected starting next year, despite a forthcoming federal tax provision that allows substantial overtime deductions.
Critics argue that the law effectively creates a new state tax on overtime, potentially generating $400 million to $600 million in additional revenue from taxpayers. Kirkmeyer stated that such revenue should remain in the hands of Coloradans, while asserting that the Democrats are attempting to undermine TABOR through this legislation.
Democratic lawmakers have dismissed the lawsuit as a political maneuver, with Sen. Mike Weissman emphasizing that it is unfounded both factually and legally. Rep. Yara Zokaie reiterated that the legislation does not introduce a new tax, labeling the suit a “political stunt.”
As the state braces for a likely special session to address the economic impacts of recent tax changes, both sides anticipate heated debates over funding and public services amidst budget constraints. Governor Polis’s spokeswoman has highlighted the potential negative consequences of the federal tax bill, which she claims could increase costs for residents.
The outcome of this lawsuit may have significant implications for state funding and budgetary decisions moving forward.
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