The Colorado Department of Revenue, Division of Taxation, convened a stakeholder workgroup on May 18, 2022, to discuss drafts of income tax rules regarding the foreign source income exclusion and the corporate subtraction for section 78 dividends.
After that discussion, the Division has made additional revisions to the draft rule regarding foreign source income exclusion and is seeking input from stakeholders regarding the revised draft. The additional revisions include the following:
- clarification regarding the exclusion allowed on combined, consolidated, and combined-consolidated returns;
- additional types of foreign source income not listed in the prior draft;
- clarification regarding the separate calculation of the exclusion for income categories for which separate calculation of the foreign tax credit is required;
- the addition of a formula representing the calculation of the exclusion;
- clarification regarding redeterminations under section 905(c) of the Internal Revenue Code; and
- additional minor clarifying revisions.
The revised redline draft showing the revisions made after the stakeholder meeting can be accessed through the following hyperlink:
- Rule 39-22-303(10). Foreign Source Income.
We do not plan to convene another workgroup meeting for this rule prior to formal rulemaking, but would welcome written feedback on the revised draft rule. Please submit comments on the draft rule by emailing your comments to dor_taxrules@state.co.us. Written comments will be accepted through November 4, 2022.
We would appreciate your feedback to help us measure and improve the success of the rulemaking program. If you participate in the rulemaking process, we invite you to complete a short survey. Follow the link, and choose the "I participated in the Rulemaking Process (Announcement, Stakeholder Meeting, or Hearing)" option.