A political group in Colorado is working to place a 2026 ballot measure that would eliminate state taxes on overtime pay and tips, aiming to mirror a recent federal tax policy change.
Advance Colorado, a conservative-leaning organization that says it fights against “radical policies,” argues that taxing overtime and tips places an unfair financial burden on working-class Coloradans.
“In Colorado, our industrial employees, first responders, and healthcare professionals often work overtime to serve the public and make ends meet for their families,” the group stated. “Waitresses, hairdressers, delivery drivers, and other manual laborers count on tips to barely afford life in our state.”
Earlier this year, Congress passed a law exempting overtime pay from federal income taxes. However, Colorado lawmakers approved a state law requiring residents to count overtime pay as taxable income on state tax returns.
If approved, Advance Colorado’s ballot measure would repeal the state’s new requirement and block future taxes on both tips and overtime pay.
The group also claims that Governor Jared Polis may call a special legislative session to speed up the implementation of state taxes on tips and overtime — though the governor’s office has not confirmed this.
The measure is still in the early stages but could bring significant tax relief for hourly workers and those who rely heavily on tips if it makes it to the 2026 ballot and wins voter support.
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