Olympic medalists catch a tax break in Colorado after governor signs bill
Author: Peter Marcus - May 22, 2017 - Updated: May 22, 2017
Gov. John Hickenlooper on Monday signed a measure that will provide a state income tax deduction for monetary awards received as a result of winning an Olympic medal.
House Bill 1104 was signed at a ceremony at the U.S. Olympic Committee in Colorado Springs.
The measure follows a move by Congress last year that gave broad passage to a similar measure to exempt medals and stipends from taxes.
In the Colorado legislation, deductions are given to to anyone who receives a medal at the summer or winter Olympics or Paralympic games.
Non-monetary benefits and endorsement earnings are not eligible for the income tax deduction, which will be available beginning in tax year 2018.
Rep. Clarice Navarro, R-Pueblo, was the driving force behind the bill during the last session.
The USOC gives athletes who win a medal at the summer or winter Olympics a cash award: $25,000 for gold, $15,000 for silver, and $10,000 for bronze medals. Paralympian medal winners are paid $5,000, $3,000, and $2,000, respectively.
The United States Olympic and Paralympic teams have won an average of 100 medals during each of the last four summer Olympic and Paralympic games and 35 medals during each of the last four winter Olympic and Paralympic games.
Federal law allows the value of Olympic or Paralympic medals and any monetary prizes received from the USOC to be excluded from federal taxable income, as long as the taxpayer has an adjusted gross income of less than $1 million.
House Bill 1104 won’t have much of an impact on state revenue, according to state fiscal analysts. Data from the USOC shows there were 65 Colorado residents that participated in the 2014 winter and 2016 summer Olympic and Paralympic games. Of these, seven athletes won an Olympic or Paralympic medal for a total of seven medals.
The value of the state income tax would have been approximately $2,400 in tax year 2014 and nearly $2,800 in tax year 2016.
It also won’t cost much money to implement the program, as fiscal analysts believe it can be accomplished with existing resources given the small number of taxpayers that are expected to claim the state income tax deduction and its availability every two years.
“Your proposed state-based legislation would provide much needed and significant financial support to some of Colorado’s most dedicated amateur athletes,” Desiree Filippone, managing director of government relations for the USOC, said in a letter to lawmakers as the bill was moving through the legislative process.
“Our Olympic and Paralympic athletes shouldn’t be penalized by way of a tax on their medals or stipends,” said Rep. Clarice Navarro, R-Pueblo, a sponsor of the bill. “Not everyone ends up on a Wheaties box, and as Coloradans we have an opportunity to make a statement and a difference to and for the young people that work so hard to represent the U.S.”