Colorado $6000 tax credit changes to $5000 point-of-sale rebate

[SageBrush]

I think so, but I am not positive.

It is my understanding that you report state/local income tax liability on your federal return.
It makes sense that it is this way since you always have the choice to file estimated sales tax instead, and that is never offset by tax credits or other deductions besides personal exemptions.

Hmmm...

Here is snippet from the Line 10, Form 1040 instructions from the IRS:

Line 10
Taxable Refunds, Credits, or
Offsets of State and Local
Income Taxes

None of your refund is taxable
if, in the year you paid the tax,
you either (a) didn't itemize de
ductions, or (b) elected to deduct state
and local general sales taxes instead of
state and local income taxes.