Rescheduled Rulemaking Hearing – Colorado Net Operating Losses and Foreign Source Income Exclusion

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The Colorado Department of Revenue, Division of Taxation, is rescheduling the rulemaking hearing on the following income tax rules from December 15, 2022, to 10:00 AM on January 19, 2023. The hearing will be held at 1881 Pierce Street, Entrance B, Room 110, Lakewood, CO 80214.

The Department will also provide the option to participate via video conference for those who wish to participate remotely. If you would like to participate by video conference, please email us at to request the login information. Those who previously received a Zoom link for the December 15 hearing may use that link for this hearing. The Department has created a Virtual Rulemaking Hearing Guide that provides additional guidance for participants. Because of additional participation features provided by the video conference, we encourage participants to participate through the video conference. Participants are welcome to use a webcam to appear by video, but may also leave their video camera off.

Parties wishing to attend or participate by teleconference should connect as follows:

Phone Number: 1 (669) 900-6833

Meeting ID: 833 3121 5328

Proposed Rules: 

  • Rule 39-22-504–1. Colorado Net Operating Losses for Individuals, Estates, and Trusts. This rule repeals and replaces the existing rule and provides guidance regarding the required addition for any part of an individual’s, estate’s, or trust’s federal net operating loss deduction that is not allocated to Colorado.
  • Rule 39-22-504–2. Colorado Net Operating Losses for C Corporations. This rule repeals and replaces the existing rule and provides guidance regarding the Colorado net operating loss deduction allowed to C corporations.
  • Rule 39-22-303(10). Foreign Source Income. This rule repeals and replaces the existing rule and provides guidance regarding the definition of foreign source income, the foreign source income exclusion, and the requirement to report any changes to that amount.
  • Rule 39-22-304(3)(j). Corporate Subtraction for Section 78 Dividend.  This new rule provides clarification regarding the subtraction from federal taxable income for amounts treated as dividends pursuant section 78 of the Internal Revenue Code.

The Department will accept oral and written comments on these proposed rules. Oral comments will be accepted in person and by video and telephone conference at the hearing. Written comments may be submitted to in advance or in lieu of oral commentary at the hearing and will be accepted until 5:00 P.M. on January 19, 2023.

You can find the proposed rules and statements of basis and purpose at the links above. You may also find this information on the Division’s website. 

The proposed rules will be published in the Colorado Register on December 25, 2022.

Termination of December 15, 2022 Hearing

As a procedural matter, the Department has terminated the December 15, 2022, hearing under the related dockets in the Secretary of State’s eDocket system (docket numbers 2022-00731, 2022-00732, 2022-00733, and 2022-00734).  New dockets have been created for the January 19, 2023, hearing, which may be accessed through the links above.  Comments filed to date in response to the Notice of Proposed Rulemaking issued November 15, 2022, will be transferred to the new dockets and do not need to be refiled.  The draft rules have not changed since the November 15, 2022, notice