Heres how much Coloradans can expect from largest taxpayer refunds in 20 years
Colorado’s economy is stable enough that taxpayers will see a temporary income tax cut, as well as a refund.
Both those savings mechanisms are triggered by the Taxpayer’s Bill of Rights, which prohibits the state budget from unrestrained growth. It requires refunds to citizens in times of good economic health.
The savings are split among three categories: a sales tax refund, a temporary cut to the state’s flat income tax rate (in this case, from 4.55% to 4.5%), and reimbursements to local governments.
For the sales tax refund, the average single filer is expected to get $69 on average, the state controller estimates, and joint filers on average should see refunds of $166. Those would be the largest TABOR refunds in 20 years.
Income taxpayers would see additional savings on top of that. While the state hasn’t issued projections for those savings, Coloradans can infer a ballpark figure. Just last year, voters passed a slightly larger income tax cut — 4.63% down to 4.55% — and the average savings for single filers was $37.
“These tax cuts and refunds are a strong sign that Colorado’s economy is roaring back,” Gov. Jared Polis said in a statement. “I’m excited that Coloradans will get another income tax cut and refund that Coloradans can put toward bouncing back from the pandemic, a night out, or groceries.”
The refund figures from the state controller are just estimates, but Carolyn Kampman, nonpartisan staff director for the legislature’s Joint Budget Committee, said there’s not much mystery left here.
“(The state controller) has done their first run of closing the books for the fiscal year that ended June 30, but it’s subject to audit, so between September and December, when the state controller typically releases the annual comprehensive financial report … it’s possible these calculations will change slightly due to that audit,” Kampman said. “But just based on the magnitude it certainly appears likely there will be a refund.”
Colorado’s economic strength is such that refunds are also projected for this fiscal year and the 2022-2023 fiscal year. Legislative Democrats have stated a desire to find a way to keep that money for the state budget, but even if that effort succeeds, it won’t affect the currently projected refunds because those will be set before the legislature returns to session.
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