(1) For income tax years commencing on or after July 1, 1995, a modification, in the form of a reduction of income taxable by the state of Colorado, shall be allowed to any qualified taxpayer for the amount of income attributable to qualifying gains receiving capital treatment earned by the qualified taxpayer during the taxable year and included in federal taxable income.
(2) For the purposes of this section:
(a) (I) Qualified taxpayer for income tax years commencing before January 1, 2022, means any taxpayer with no overdue state tax liabilities and not in default on any contractual obligations owed to the state or to any local government within Colorado at the time the modification created under this section is claimed. This subsection (2)(a)(I) is repealed, effective December 31, 2030.
(I.5) Qualified taxpayer means, for income tax years commencing on or after January 1, 2022, any taxpayer that has no overdue state tax liabilities; that is not in default on any contractual obligations owed to the state or to any local government within Colorado at the time the modification created under this section is claimed; and that is required to file a schedule F, profit or loss from farming, or successor form, as an attachment to the taxpayer's federal income tax return for the tax year in which the net capital gains arise.
(II) For the purposes of this paragraph (a), overdue state tax liabilities includes uncollectible tax liabilities resulting from bankruptcy.
(b) (I) Qualifying gains receiving capital treatment means the amount of net capital gains, as defined in section 1222 (11) of the internal revenue code, included in any qualified taxpayer's federal income tax return and:
(A) and (B) Repealed.
(B.5) For income tax years commencing before January 1, 2022, earned by the qualified taxpayer on either real or tangible personal property located within Colorado that was acquired on or after May 9, 1994, but before June 4, 2009, or on tangible personal property only located either within or outside Colorado that was acquired on or after June 4, 2009, and either of which has been owned by the qualified taxpayer for a holding period of at least five years prior to the date of the transaction from which the net capital gains arise if the transaction from which the net capital gains arise occurred during an income tax year that commenced on or after January 1, 2010; except that no more than one hundred thousand dollars of net capital gains described in this subsection (2)(b)(I)(B.5) are qualifying gains receiving capital treatment for any single income tax year. This subsection (2)(b)(I)(B.5) is repealed, effective December 31, 2030.
(B.7) For income tax years commencing on or after January 1, 2022, earned by the qualified taxpayer on qualified real property that was acquired on or after May 9, 1994, but before June 4, 2009, and has been owned by the qualified taxpayer for a holding period of at least five years prior to the date of the transaction from which the net capital gains arise; except that no more than one hundred thousand dollars of net capital gains described in this subsection (2)(b)(I)(B.7) are qualifying gains receiving capital treatment for any single income tax year.
(C) to (F) Repealed.
(II) For purposes of this subsection (2)(b):
(A) Repealed.
(B) Holding period means an uninterrupted period of time.
(C) Qualified real property means real property located in Colorado that is sold by the taxpayer and generates the qualifying gains receiving capital treatment and that is classified by the county property tax assessor immediately preceding the sale as agricultural land under section 39-1-102 (1.6)(a). If real property is sold as a type of investment package, then, in order to be qualified real property, at least seventy-five percent of the real property sold in the package must be classified by the county property tax assessor immediately preceding the sale as agricultural land under section 39-1-102 (1.6)(a).
(3) Any reduction in Colorado taxable income caused by the modification allowed by this section shall not create any right to a cash refund for the year for which the modification is claimed, nor shall the reduction create any right to a financial or other tax benefit which may be carried forward by the qualified taxpayer.
(4) Any taxpayer claiming a modification pursuant to this section shall submit with the taxpayer's income tax return in which such modification is claimed an affidavit, signed under penalty of perjury, stating that the taxpayer meets the definition of a qualified taxpayer as stated in paragraph (a) of subsection (2) of this section.
(5) to (8) Repealed.
Source: L. 94: Entire section added, p. 1104, � 1, effective May 9. L. 99: (2)(b)(I) and (2)(b)(II)(B) amended and (5), (6), and (7) added, p. 1284, � 1, effective August 4. L. 2000: (2)(b)(I), (5)(a), (5)(b)(I), (5)(b)(II), (5)(b)(V), (5)(b)(VI), (6), and (7) amended and (5)(c) and (5)(d) added, pp. 1456, 1459, �� 1, 2, effective August 2. L. 2001: (7) amended, p. 1280, � 55, effective June 5; (5)(a), (5)(b)(I), (5)(b)(II), and (5)(b)(VI) amended, p. 394, � 5, effective August 8. L. 2009: (2)(b)(I)(A) and (2)(b)(I)(B) amended, (2)(b)(I)(B.5) and (8) added, and (2)(b)(I)(C), (2)(b)(I)(D), (2)(b)(I)(E), (2)(b)(I)(F), (5), (6), and (7) repealed, (HB 09-1366), ch. 432, pp. 2397, 2398, �� 1, 2, 3, effective June 4. L. 2021: (2)(a)(I), (2)(b)(I)(B.5), and IP(2)(b)(II) amended and (2)(a)(I.5), (2)(b)(I)(B.7), and (2)(b)(II)(C) added, (HB 21-1311), ch. 298, p. 1778, � 8, effective June 23. L. 2023: (2)(b)(II)(A) repealed, (HB 23-1251), ch. 437, p. 2572, � 2, effective August 7.
Editor's note: Subsection (8) provided for the repeal of subsections (2)(b)(I)(A), (2)(b)(I)(B), and (8), effective January 1, 2015. (See L. 2009, p. 2398.)
Cross references: (1) For other provisions concerning adjustments to federal taxable income, see � 39-22-104.
(2) For the legislative declaration contained in the 2001 act amending subsections (5)(a), (5)(b)(I), (5)(b)(II), and (5)(b)(VI), see section 1 of chapter 133, Session Laws of Colorado 2001.
(3) For the legislative declaration in HB 21-1311, see section 1 of chapter 298, Session Laws of Colorado 2021.
39-22-519. Tax credit for book value of certificate for carriers of sludge - repeal. (Repealed)
Source: L. 94: Entire section added, p. 2822, � 2, effective June 3.
Editor's note: Subsection (3) provided for the repeal of this section, effective January 1, 1999. (See L. 94, p. 2822.)
39-22-520. Credit against tax - investment in school-to-career program - definitions - repeal. (1) The general assembly hereby recognizes that businesses and other aspects of the economy need trained, educated, and motivated workers. It is therefore the intent of the general assembly to encourage private investment in programs that integrate traditional education with on-the-job training. It is further the intent of the general assembly to foster and encourage cooperation among the private sector and the educational community in creating programs that will open doors of opportunity for students and enable them to develop the knowledge and skills that will empower them to become productive members of society.
(2) (a) For income tax years beginning on or after January 1, 1997, and prior to January 1, 2025, there shall be allowed to any person as a credit against the tax imposed by this article 22 an amount equal to ten percent of the total qualified investment made in a qualified school-to-career program.
(b) For purposes of this subsection (2):
(I) Qualified investment means moneys directly expended for wages, workers' compensation insurance, unemployment insurance, and training expenses to employ a student to work or to allow a student to participate in an internship through a qualified school-to-career program.
(II) Qualified school-to-career program means a program that integrates school curriculum with job training, that encourages placement of students in jobs or internships that will teach them new skills and improve their school performance, and that is approved by:
(A) The board of education of the school district in which the program is operating;
(B) The state board for community colleges and occupational education;
(C) The private occupational school division created pursuant to section 23-64-105; or
(D) The Colorado commission on higher education.
(3) If the amount of the credit provided for pursuant to subsection (2) of this section exceeds the amount of income taxes due on the income of the taxpayer in the income tax year for which the credit is being claimed, the amount of the credit not used as an offset against income taxes in said income tax year shall not be allowed as a refund but may be carried forward as a credit against subsequent years' tax liability for a period not exceeding five years and shall be applied first to the earliest income tax years possible. Any amount of the credit that is not used during said period shall not be refundable to the taxpayer.
(4) This section is repealed, effective December 31, 2034.
Source: L. 97: Entire section added, p. 1395, � 1, effective June 3. L. 2008: (2)(b)(II)(C) amended, p. 1482, � 27, effective May 28. L. 2017: (2)(b)(II)(C) amended, (HB 17-1239), ch. 261, p. 1207, � 19, effective August 9. L. 2024: (2)(a) amended and (4) added, (HB 24-1439), ch. 163, p. 775, � 2, effective May 10; (2)(a) amended and (4) added, (HB 24-1036), ch. 373, p. 2528, � 12, effective August 7.
Cross references: For the legislative declaration in HB 24-1036, see section 1 of chapter 373, Session Laws of Colorado 2024.
39-22-521. Credits against tax - employer expenses - public assistance recipients - repeal. (1) With respect to taxable years commencing on or after January 1, 1998, and prior to January 1, 2025, there shall be allowed to an employer of any person receiving public assistance pursuant to the Colorado works program set forth in part 7 of article 2 of title 26, a credit, for not more than two years, against the tax imposed by this article in the amount of twenty percent of the employer's annual investment in any one or more of the following services that are incidental to the employer's business:
(a) The provision of child care services or the payment of the costs associated with child care services for children of employees receiving public assistance;
(b) The provision of health or dental insurance for employees receiving public assistance, which health or dental insurance coverage, if less than the coverage provided through medicaid, shall be supplemented by medicaid to provide full medicaid benefits to the employee;
(c) The provision of job training or basic education of employees receiving public assistance;
(d) The provision of programs for the transportation of public assistance employees to and from work.
(2) The tax credit described in subsection (1) of this section shall be in addition to any other credits for which the employer may be eligible pursuant to the provisions of article 30 of this title.
(3) The credit allowed by this section for any income tax year shall not exceed the employer's actual tax liability for such taxable year. If the amount of the credit allowed by this section exceeds the employer's actual tax liability for any income tax year in which the credit authorized in this section is claimed, such excess shall be a tax credit carryover to each of the three income tax years following the unused credit year and shall be applied first to the earliest income tax years possible.
(4) This section is repealed, effective December 31, 2032.
Source: L. 97: Entire section added, p. 1245, � 52, effective July 1. L. 2024: IP(1) amended and (4) added, (HB 24-1036), ch. 373, p. 2528, � 13, effective August 7.
Cross references: For the legislative declaration in HB 24-1036, see section 1 of chapter 373, Session Laws of Colorado 2024.
39-22-522. Credit against tax - conservation easements - definitions - repeal. (1) For purposes of this section:
(a) For income tax years commencing prior to January 1, 2021, taxpayer means a resident individual or a domestic or foreign corporation subject to the provisions of part 3 of this article, a partnership, S corporation, or other similar pass-through entity, estate, or trust that donates a conservation easement as an entity, and a partner, member, and subchapter S shareholder of such pass-through entity.
(b) For income tax years commencing on or after January 1, 2021, taxpayer means any person or entity filing a state income tax return or a domestic or foreign corporation subject to the provisions of part 3 of this article 22, a partnership, S corporation, or other similar pass-through entity, estate, trust, nonprofit entity, or an entity that has authority to conduct water activities, as defined by section 37-45.1-102 (3) and created pursuant to article 41, 45, 46, 47, 48, or 50 of title 37, or article 42 of title 7, that conveys a conservation easement in gross pursuant to section 38-30.5-104. A ditch or reservoir company formed pursuant to article 42 of title 7, or otherwise, is entitled to act on its own behalf in granting a conservation easement and earning and transferring tax credits under this section, whether or not any of its shareholders or members are governmental entities.
(2) (a) For income tax years commencing on or after January 1, 2000, but prior to January 1, 2014, and, with regard to any credit over the amount of one hundred thousand dollars, for income tax years commencing on or after January 1, 2003, but before January 1, 2032, subject to the provisions of subsections (4) and (6) of this section, there shall be allowed a credit with respect to the income taxes imposed by this article to each taxpayer who donates during the taxable year all or part of the value of a perpetual conservation easement in gross created pursuant to article 30.5 of title 38 upon real property the taxpayer owns to a governmental entity or a charitable organization described in section 38-30.5-104 (2). The credit shall only be allowed for a donation that is eligible to qualify as a qualified conservation contribution pursuant to section 170 (h) of the internal revenue code, as amended, and any federal regulations promulgated in connection with such section. The amount of the credit shall not include the value of any portion of an easement on real property located in another state.
(b) For income tax years commencing on or after January 1, 2014, but before January 1, 2032, and, with regard to any credit over the amount of one hundred thousand dollars, for income tax years commencing on or after January 1, 2003, but before January 1, 2032, subject to the provisions of subsections (4) and (6) of this section, there shall be allowed a credit with respect to the income taxes imposed by this article to each taxpayer who donates during the taxable year all or part of the value of a perpetual conservation easement in gross created pursuant to article 30.5 of title 38 upon real property the taxpayer owns to a governmental entity or a charitable organization described in section 38-30.5-104 (2). The credit shall only be allowed for a donation that meets the requirements of section 170 of the federal Internal Revenue Code of 1986, as amended, and any federal regulations promulgated in accordance with such section. The amount of the credit shall not include the value of any portion of an easement on real property located in another state.
(2.5) Notwithstanding any other provision of this section and the requirements of section 12-15-106, for income tax years commencing on or after January 1, 2011, a taxpayer conveying a conservation easement and claiming a credit pursuant to this section shall, in addition to any other requirements of this section and the requirements of section 12-15-106, submit a claim for the credit to the division of conservation in the department of regulatory agencies. The division must prioritize tax credit applications in the order received. The division must assign each application with the date and time received based on the order in which a completed application was submitted pursuant to section 12-15-106 (5). Incomplete applications do not get priority in the review process. Disapproved applications lose their priority in the review process. After certificates have been issued for credits that exceed an aggregate of twenty-two million dollars for all taxpayers for the 2011 and 2012 calendar years, thirty-four million dollars for the 2013 calendar year, forty-five million dollars for each of the 2014 to 2024 calendar years, and fifty million dollars for each of the 2025 to 2031 calendar years, any claims that exceed the amount allowed for a specified calendar year shall be issued for use in the next year for which the division has not issued credit certificates in excess of the amounts specified in this subsection (2.5). The division shall not issue credit certificates that exceed twenty-two million dollars in each of the 2011 and 2012 calendar years, thirty-four million dollars for the 2013 calendar year, forty-five million dollars for each of the 2014 to 2024 calendar years, and fifty million dollars for each of the 2025 through 2031 calendar years. No claim for a credit is allowed for any income tax year commencing on or after January 1, 2011, unless a certificate has been issued by the division. If all other requirements under section 12-15-106 and this section are met, the right to claim the credit is vested in the taxpayer at the time the credit certificate is issued. In the case of a tax credit certificate issued to a taxpayer who files an income tax return for a tax year other than a calendar year, the credit must be used in the income tax year that begins during the calendar year for which the tax credit certificate is issued.
(2.7) Notwithstanding any other provision, for income tax years commencing on or after January 1, 2014, no claim for a credit shall be allowed unless a tax credit certificate is issued by the division of real estate prior to May 30, 2018, or by the division of conservation on or after May 30, 2018, in accordance with sections 12-15-105 and 12-15-106 and, for income tax years commencing on or after January 1, 2014, but prior to January 1, 2022, the taxpayer files the tax credit certificate with the income tax return filed with the department of revenue.
(3) For conservation easements donated prior to January 1, 2014, in order for any taxpayer to qualify for the credit provided for in subsection (2) of this section, the taxpayer shall submit the following in a form approved by the executive director to the department of revenue at the same time as the taxpayer files a return for the taxable year in which the credit is claimed:
(a) A statement indicating whether a deduction was claimed on the taxpayer's federal income tax return for a conservation easement in gross;
(b) A statement that reflects the information included in the noncash charitable contributions form used to claim a deduction for a conservation easement in gross on a federal income tax return and whether the donation was made in order to get a permit or other approval from a local or other governing authority;
(c) A statement to be made available to the public by the department of revenue that includes a summary of the conservation purposes as defined in section 170 (h) of the internal revenue code that are protected by the easement; the county, township, and range where the easement is located; the number of acres subject to the easement; the amount of the tax credit claimed; and the name of the organization holding the easement;
(d) A summary of a qualified appraisal that meets the requirements set forth in subsection (3.3) of this section; however, if requested by the department of revenue, the taxpayer shall submit the appraisal itself;
(e) A copy of the appraisal and accompanying affidavit from the appraiser submitted to the division of real estate in the department of regulatory agencies in accordance with the provisions of section 12-61-719, C.R.S., as said section existed prior to its repeal on July 1, 2013;
(f) If the holder of the conservation easement is an organization to which the certification program in section 12-15-104 applies, a sworn affidavit from the holder of the conservation easement in gross that includes the following:
(I) Repealed.
(II) An acknowledgment of whether the transaction is part of a series of transactions by the same donor; and
(III) An acknowledgment that the holder has reviewed the completed Colorado gross conservation easement credit schedule to be filed by the taxpayer and that the property is accurately described in the schedule.
(3.3) The appraisal for a conservation easement in gross donated prior to January 1, 2014, and for which a credit is claimed shall be a qualified appraisal from a qualified appraiser, as those terms are defined in section 170 (f)(11) of the internal revenue code. The appraisal shall be in conformance with the uniform standards of professional appraisal practice promulgated by the appraisal standards board of the appraisal foundation and any other provision of law. The appraiser shall hold a valid license as a certified general appraiser in accordance with the provisions of part 6 of article 10 of title 12. If there is a final determination, other than by settlement of the taxpayer, that an appraisal submitted in connection with a claim for a credit pursuant to this section is a substantial or gross valuation misstatement as such misstatements are defined in section 1219 of the federal Pension Protection Act of 2006, Pub.L. 109-280, the department shall submit a complaint regarding the misstatement to the board of real estate appraisers for disciplinary action in accordance with the provisions of part 6 of article 10 of title 12.
(3.5) (a) For conservation easements donated prior to January 1, 2014:
(I) The executive director shall have the authority, pursuant to subsection (8) of this section, to require additional information from the taxpayer or transferee regarding the appraisal value of the easement, the amount of the credit, and the validity of the credit. In resolving disputes regarding the validity or the amount of a credit allowed pursuant to subsection (2) of this section, including the value of the conservation easement for which the credit is granted, the executive director shall have the authority, for good cause shown and in consultation with the division of conservation and the conservation easement oversight commission created in section 12-15-103 (1), to review and accept or reject, in whole or in part, the appraisal value of the easement, the amount of the credit, and the validity of the credit based upon the internal revenue code and federal regulations in effect at the time of the donation. If the executive director reasonably believes that the appraisal represents a gross valuation misstatement, receives notice of such a valuation misstatement from the division of real estate, or receives notice from the division of real estate that an enforcement action has been taken by the board of real estate appraisers against the appraiser, the executive director shall have the authority to require the taxpayer to provide a second appraisal at the expense of the taxpayer. The second appraisal shall be conducted by a certified general appraiser in good standing and not affiliated with the first appraiser that meets qualifications established by the division of real estate. In the event the executive director rejects, in whole or in part, the appraisal value of the easement, the amount of the credit, or the validity of the credit, the procedures described in sections 39-21-103, 39-21-104, 39-21-104.5, and 39-21-105 shall apply.
(II) In consultation with the division of conservation and the conservation easement oversight commission created in section 12-15-103 (1), the executive director shall develop and implement a separate process for the review by the department of revenue of gross conservation easements. The review process shall be consistent with the statutory obligations of the division and the commission and shall address gross conservation easements for which the department of revenue has been informed that an audit is being performed by the internal revenue service. The executive director shall share information used in the review of gross conservation easements with the division. Notwithstanding part 2 of article 72 of title 24, in order to protect the confidential financial information of a taxpayer, the division and the commission shall deny the right to inspect any information provided by the executive director in accordance with this subsection (3.5)(a)(II).
(b) (I) For conservation easements donated on or after January 1, 2014, and subject to the restrictions of section 12-15-106 (4), the executive director shall have the authority, pursuant to subsection (8) of this section, to require additional information from the taxpayer or transferee regarding the amount of a credit transferred prior to January 1, 2021, and the validity of the credit. In resolving disputes regarding the validity or the amount of a credit allowed pursuant to subsection (2) of this section, the executive director shall have the authority, for good cause shown, to review and accept or reject, in whole or in part, the amount of the credit and the validity of the credit based upon the internal revenue code and federal regulations in effect at the time of the donation, except those requirements for which authority is granted to the division of conservation, the director of the division of conservation, or the conservation easement oversight commission pursuant to section 12-15-106.
(II) For tax credit certificates issued by the division for use on or after January 1, 2021, the transferor and transferee of the tax credit shall jointly file a copy of the written transfer agreement with the division of conservation within thirty days after June 30, 2021, or the date of the transfer, whichever is later. If the credit being transferred was issued for a year other than the year in which it is transferred, the transferor shall further submit a copy of the transferor's DR1305 form for each year from the year for which the credit was issued through the most recent year for which taxes were due. The division shall issue a certificate to the transferee in the amount of the tax credit transferred and, if any amount is retained by the transferor, issue a certificate to the transferor in the amount retained. In no event shall a transferee be allowed to claim an amount greater than the amount specified in the certificate issued to the transferee. The division shall develop a system to track the transfers of tax credits and to certify the ownership of tax credits. A certification issued for use on or after January 1, 2021, by the division of the ownership and amount of tax credits shall be relied upon by the department of revenue and the transferee as being accurate, and neither the division nor the department of revenue shall adjust the amount of tax credits certified by the division as to the transferee; except that the division and department retain any remedies it may have against the landowner. The division may promulgate rules to permit verification of the ownership and amount of the tax credits; except that any rules promulgated shall not unduly restrict or hinder the transfer of the tax credits.
(3.6) (a) For conservation easements donated on or after January 1, 2014, in order for any taxpayer to claim the credit provided for in subsection (2) of this section, the taxpayer must submit the following in a form, approved by the executive director, to the department of revenue at the same time as the taxpayer files a return for the taxable year in which the credit is claimed:
(I) A tax credit certificate issued under section 12-15-106; and
(II) The information required in subsections (3)(a) and (3)(b) of this section.
(b) Notwithstanding any other provisions of law, the executive director retains the authority to administer all issues related to the claim or use of a tax credit for the donation of a conservation easement that are not granted to the director of the division of conservation or the conservation easement oversight commission under section 12-15-106.
(3.7) If the gain on the sale of a conservation easement in gross for which a credit is claimed pursuant to this section would not have been a long-term capital gain, as defined under the internal revenue code, if, at the time of the donation, the taxpayer had sold the conservation easement at its fair market value, then the value of the conservation easement in gross for the purpose of calculating the amount of the credit shall be reduced to the taxpayer's tax basis in the conservation easement in gross. The tax basis of a taxpayer in a conservation easement shall be determined and allocated pursuant to sections 170 (e) and 170 (h) of the internal revenue code, as amended, and any federal regulations promulgated in connection with such sections. This subsection (3.7) shall be applied in a manner that is consistent with the tax treatment of qualified conservation contributions under the internal revenue code and the federal regulations promulgated under the internal revenue code.
(3.8) Repealed.
(4) (a) (I) For a conservation easement in gross created in accordance with article 30.5 of title 38, C.R.S., that is donated prior to January 1, 2007, to a governmental entity or a charitable organization described in section 38-30.5-104 (2), C.R.S., the credit provided for in subsection (2) of this section shall be an amount equal to one hundred percent of the first one hundred thousand dollars of the fair market value of the donated portion of such conservation easement in gross when created, and forty percent of all amounts of the donation in excess of one hundred thousand dollars; except that in no case shall the credit exceed two hundred sixty thousand dollars per donation.
(II) For a conservation easement in gross created in accordance with article 30.5 of title 38, C.R.S., that is donated on or after January 1, 2007, and prior to January 1, 2015, to a governmental entity or a charitable organization described in section 38-30.5-104 (2), C.R.S., the credit provided for in subsection (2) of this section shall be an amount equal to fifty percent of the fair market value of the donated portion of such conservation easement in gross when created; except that, in no case shall the credit exceed three hundred seventy-five thousand dollars per donation.
(II.5) For a conservation easement in gross created in accordance with article 30.5 of title 38 that is donated on or after January 1, 2015, but prior to January 1, 2021, to a governmental entity or a charitable organization described in section 38-30.5-104 (2), the credit provided for in subsection (2) of this section shall be an amount equal to seventy-five percent of the first one hundred thousand dollars of the fair market value of the donated portion of such conservation easement in gross when created, and fifty percent of all amounts of the donation in excess of one hundred thousand dollars; except that in no case shall the credit exceed five million dollars per donation. Credits shall be issued in increments of no more than one million five hundred thousand dollars per year. Credits for easements donated in a prior year shall be eligible for tax credit certificates in subsequent years in order of application and before new applications and those credit applications, if any, on the wait list.
(II.7) For a conservation easement in gross created in accordance with article 30.5 of title 38 that is donated to a governmental entity or a charitable organization described in section 38-30.5-104 (2), the credit provided for in subsection (2) of this section is an amount equal to:
(A) For conservation easements donated on or after January 1, 2021, but before January 1, 2027, ninety percent of the fair market value of the donated portion of such conservation easement in gross when created; except that in no case shall the credit exceed five million dollars per donation; and
(B) For conservation easements donated on or after January 1, 2027, eighty percent of the fair market value of the donated portion of such conservation easement in gross when created; except that, in no case shall the credit exceed five million dollars per donation.
(II.8) Credits shall be issued in increments of no more than one million five hundred thousand dollars per year. Credits for easements donated in a prior year are eligible for tax credit certificates in subsequent years in order of application.
(III) In no event shall a credit claimed by a taxpayer filing a joint federal return, or the sum of the credits claimed by taxpayers who may legally file a joint federal return but actually file separate federal returns, exceed the dollar limitations of this paragraph (a).
(b) (I) For income tax years commencing on or after January 1, 2000, in the case of a joint tenancy, tenancy in common, partnership, S corporation, or other similar entity or ownership group that donates a conservation easement as an entity or group, the amount of the credit allowed pursuant to subsection (2) of this section must be allocated to the entity's owners, partners, members, or shareholders in proportion to the owners', partners', members', or shareholders' distributive shares of income or ownership percentage from such entity or group.
(II) (A) For income tax years commencing on or after January 1, 2000, but prior to January 1, 2003, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed one hundred thousand dollars, and, if any refund is claimed pursuant to subsection (5)(b)(I) of this section, the aggregate amount of the refund and the credit claimed by such partners, members, and shareholders shall not exceed twenty thousand dollars for that income tax year.
(B) For income tax years commencing on or after January 1, 2003, but prior to January 1, 2007, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed two hundred sixty thousand dollars, and, if any refund is claimed pursuant to subsection (5)(b)(I) of this section, the aggregate amount of the refund and the credit claimed by such owners, partners, members, and shareholders shall not exceed fifty thousand dollars for that income tax year.
(C) For income tax years commencing on or after January 1, 2007, and prior to January 1, 2015, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed three hundred seventy-five thousand dollars, and, if any refund is claimed pursuant to subsection (5)(b)(I) of this section, the aggregate amount of the refund and the credit claimed by such owners, partners, members, and shareholders shall not exceed fifty thousand dollars for that income tax year.
(D) For income tax years commencing on or after January 1, 2015, but before January 1, 2027, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed five million dollars, and, if any refund is claimed pursuant to subsection (5)(b)(I) of this section, the aggregate amount of the refund and the credit claimed by such owners, partners, members, and shareholders shall not exceed fifty thousand dollars for that income tax year.
(E) For income tax years commencing on or after January 1, 2027, the total aggregate amount of the credit allocated to such owners, partners, members, and shareholders shall not exceed five million dollars, and, if any refund is claimed pursuant to subsection (5)(b)(I) of this section, the aggregate amount of the refund and the credit claimed by such owners, partners, members, and shareholders shall not exceed two hundred thousand dollars for that income tax year.
(5) (a) If the tax credit provided in this section exceeds the amount of income tax due on the income of the taxpayer for the taxable year, the amount of the credit not used as an offset against income taxes in said income tax year and not refunded pursuant to paragraph (b) of this subsection (5) may be carried forward and applied against the income tax due in each of the twenty succeeding income tax years but shall be first applied against the income tax due for the earliest of the income tax years possible. Any amount of the credit that is not used after said period shall not be refundable.
(b) (I) Subject to the requirements specified in subparagraphs (II) and (III) of this paragraph (b), for income tax years commencing on or after January 1, 2000, if the amount of the tax credit allowed in or carried forward to any tax year pursuant to this section exceeds the amount of income tax due on the income of the taxpayer for the year, the taxpayer may elect to have the amount of the credit not used as an offset against income taxes in said income tax year refunded to the taxpayer.
(II) (A) Before January 1, 2027, a taxpayer may elect to claim a refund pursuant to subsection (5)(b)(I) of this section only if, based on the financial report prepared by the controller in accordance with section 24-77-106.5, the controller certifies that the amount of state revenues for the state fiscal year ending in the income tax year for which the refund is claimed exceeds the limitation on state fiscal year spending imposed by section 20 (7)(a) of article X of the state constitution and the voters statewide either have not authorized the state to retain and spend all of the excess state revenues or have authorized the state to retain and spend only a portion of the excess state revenues for that fiscal year.
(B) This subsection (5)(b)(II) is repealed, effective December 31, 2031.
(III) If any refund is claimed pursuant to subsection (5)(b)(I) of this section, then the aggregate amount of the refund and amount of the credit used as an offset against income taxes, excluding amounts transferred to or used by a transferee, for that income tax year shall not exceed fifty thousand dollars for that income tax year for income tax years commencing before January 1, 2027, and shall not exceed two hundred thousand dollars for that income tax year for income tax years commencing on or after January 1, 2027. In the case of a partnership, S corporation, or other similar pass-through entity that donates a conservation easement as an entity, if any refund is claimed pursuant to subsection (5)(b)(I) of this section, the aggregate amount of the refund and the credit claimed by the partners, members, or shareholders of the entity shall not exceed the dollar limitation set forth in this subsection (5)(b)(III) for that income tax year. Nothing in this subsection (5)(b)(III) shall limit a taxpayer's ability to claim a credit against taxes due in excess of fifty thousand dollars for tax years commencing before January 1, 2027, and two hundred thousand dollars for tax years commencing on or after January 1, 2027, in accordance with subsection (4) of this section.
(6) (a) For conservation easements donated prior to January 1, 2014, a taxpayer may claim only one tax credit under this section per income tax year; except that a transferee of a tax credit under subsection (7) of this section may claim an unlimited number of credits. A taxpayer who has carried forward or elected to receive a refund of part of the tax credit in accordance with subsection (5) of this section shall not claim an additional tax credit under this section for any income tax year commencing prior to January 1, 2014, in which the taxpayer applies the amount carried forward against income tax due or receives a refund. A transferor who has transferred a credit to a transferee pursuant to subsection (7) of this section shall not claim an additional tax credit under this section for any income tax year commencing prior to January 1, 2014, in which the transferee uses such transferred credit. Commencing January 1, 2014, a taxpayer may claim one tax credit per year regardless of whether the taxpayer has credits remaining from any prior conservation easement donation.
(b) For conservation easements donated on or after January 1, 2000, a taxpayer may claim only one tax credit under this section per income tax year; except that a transferee of a tax credit under subsection (7) of this section may claim an unlimited number of credits.
(7) For income tax years commencing on or after January 1, 2000, a taxpayer may transfer all or a portion of a tax credit granted pursuant to subsection (2) of this section to a transferee for such transferee to apply as a credit against the taxes imposed by this article 22 subject to the following limitations:
(a) The taxpayer may only transfer such portion of the tax credit as the taxpayer has neither applied against the income taxes imposed by this article nor used to obtain a refund;
(b) The taxpayer may transfer a pro-rated portion of the tax credit to more than one transferee;
(c) A transferee may not elect to have any transferred credit refunded pursuant to paragraph (b) of subsection (5) of this section;
(d) Repealed.
(e) To the extent that a transferee paid value for the transfer of a conservation easement tax credit to such transferee, the transferee shall be deemed to have used the credit to pay, in whole or in part, the income tax obligation imposed on the transferee under this article, and to such extent the transferee's use of a tax credit from a transferor under this section to pay taxes owed shall not be deemed a reduction in the amount of income taxes imposed by this article on the transferee;
(f) The transferee shall submit to the department a form approved by the department. The transferee shall also file a copy of the form with the entity to whom the taxpayer donated the conservation easement.
(g) A transferee of a tax credit shall purchase the credit prior to the due date imposed by this article, including any extensions, for filing the transferee's income tax return;
(h) A tax credit held by an individual either directly or as a result of a donation by a pass-through entity, but not a tax credit held by a transferee unless used by the transferee's estate for taxes owed by the estate, shall survive the death of the individual and may be claimed or transferred by the decedent's estate. This paragraph (h) shall apply to any tax credit from a donation of a conservation easement made on or after January 1, 2000.
(i) For a donation made prior to January 1, 2021, the donor of an easement for which a tax credit is claimed or the transferor of a tax credit claimed for the donation of the easement transferred pursuant to this subsection (7) is the tax matters representative in all matters with respect to the credit. The tax matters representative is responsible for representing and binding the transferees with respect to all issues affecting the credit, including, but not limited to, the charitable contribution deduction, the appraisal, notifications and correspondence from and with the department of revenue, audit examinations, assessments or refunds, settlement agreements, and the statute of limitations. The transferee is subject to the same statute of limitations with respect to the credit as the transferor of the credit.
(j) For a tax credit claimed for the donation of an easement made prior to January 1, 2021, final resolution of disputes regarding the tax credit between the department of revenue and the tax matters representative, including final determinations, compromises, payment of additional taxes or refunds due, and administrative and judicial decisions, is binding on transferees.
(7.5) (a) For income tax years commencing on or after January 1, 2021, in lieu of a credit with respect to the income taxes imposed by this article 22, there is allowed a transferable expense amount to each qualified entity that donates during the taxable year all or part of the value of a perpetual conservation easement in gross created pursuant to article 30.5 of title 38 upon real property the qualified entity owns to a governmental entity or a charitable organization described in section 38-30.5-104 (2). A transferable expense amount shall be treated in all manners as a tax credit for purposes of this section, including provisions governing the amount, valuation, and transfer of a tax credit; except that the transferable expense amount may only be transferred to a transferee to be claimed by the transferee as a credit pursuant to this section. A qualified entity may transfer a transferable expense amount to be claimed as a credit by a transferee pursuant to this section regardless of whether the qualified entity receives value in exchange for the transfer.
(b) As used in this subsection (7.5), qualified entity means a governmental entity that meets the definition of taxpayer as set forth in subsection (1)(b) of this section but is otherwise exempt from the income taxes imposed by this article 22.
(8) The executive director of the department of revenue may promulgate rules for the implementation of this section. Such rules shall be promulgated in accordance with article 4 of title 24, C.R.S.
(9) Any taxpayer who claims a credit for the donation of a conservation easement contrary to the provisions of this section shall be liable for such deficiencies, interest, and penalties as may be specified in this article or otherwise provided by law.
(10) and (11) Repealed.
(12) For income tax years commencing on or after January 1, 2024, every taxpayer exempt from taxes pursuant to section 39-22-112 that claims the credit allowed in this section shall file a return pursuant to section 39-22-601 (7)(b).
(13) Any transferee who is subject to the tax on insurance premiums established by sections 10-3-209, 10-5-111, and 10-6-128, and who is therefore exempt from the payment of income tax and who is otherwise eligible to claim a tax credit pursuant to this section may claim the tax credit and carry the tax credit forward against the insurance premium tax to the same extent as the transferee would have been able to claim or carry forward the tax credit against income tax. All other provisions of this section with respect to the tax credit, including the amount and allocation of the tax credit and the years for which the tax credit may be claimed shall apply to a tax credit claimed pursuant to this section.
(14) For any conservation easement granted on or after January 1, 2025, the conservation easement may include a provision providing that if technological or legal changes allow an expanded use of wind and solar power generation, transmission, and storage to be compatible with the protection of conservation values considered as a whole and pursuant to section 170 (h) of the internal revenue code and any federal regulations promulgated in connection with such section, then the holder of the conservation easement may, in its sole discretion, approve expanded wind and solar power generation, transmission, or storage that is compatible with and does not diminish or impair conservation values.
(15) This section is repealed, effective January 1, 2052.
Source: L. 99: Entire section added, p. 976, � 1, effective August 4. L. 2000: (4), (5), and (6) amended and (7) and (8) added, p. 894, � 1, effective August 2. L. 2001: (1), (2), (3), (4), and (5)(b)(III) amended, p. 395, � 6, effective August 8; (1), (2), (3), (4), (5)(b)(III), (6), (7)(a), (7)(b) amended and (7)(e) and (7)(f) added, p. 901, � 1, effective January 1, 2003. L. 2002: (2) amended and (9) added, p. 510, � 1, effective August 7; (2) amended and (9) added, p. 511, � 2, effective January 1, 2003. L. 2005: (3.5), (7)(g), (7)(h), (7)(i), and (7)(j) added, pp. 1479, 1480, �� 1, 2, effective June 7. L. 2006: (4) amended, p. 822, � 1, effective August 7. L. 2007: (3), (3.5), and (7)(i) amended and (3.3), (10), and (11) added, p. 1228, � 3, effective August 3. L. 2008: (3)(b), (3)(e), IP(3)(f), (3)(f)(I), (3.3), and (3.5) amended and (3.7) added, p. 2316, � 8, effective July 1. L. 2010: (2.5) added, (HB 10-1197), ch. 175, p. 635, � 4, effective August 11. L. 2011: (2.5) amended, (HB 11-1300), ch. 193, p. 753, � 4, effective May 19. L. 2013: (2), (2.5), IP(3), (3.3), (3.5), (6), (10), and (11) amended and (2.7) and (3.6) added, (SB 13-221), ch. 251, p. 1330, � 9, effective August 7; (2.5) amended, (HB 13-1183), ch. 252, p. 1338, � 2, effective August 7. L. 2014: (4)(a)(III) amended, (SB 14-019), ch. 10, p. 99, � 6, effective February 27; (2.5), (2.7), (3)(e), IP(3)(f), (3.3), (3.5), (3.6)(a)(I), and (3.6)(b) amended, (SB 14-117), ch. 385, p. 1919, � 8, effective July 1. L. 2015: (4)(a)(II) amended and (4)(a)(II.5) added, (SB 15-206), ch. 272, p. 1086, � 1, effective June 4. L. 2017: IP(3)(f) amended and (3)(f)(I) repealed, (SB 17-294), ch. 264, p. 1414, � 108, effective May 25. L. 2018: (2.5), (2.7), IP(3)(f), (3.5), (3.6)(a)(I), (3.6)(b), and (7)(g) amended and (3.8) added, (HB 18-1291), ch. 273, p. 1689, � 6, effective May 29. L. 2019: (2.7), (3.3), and (4)(a)(II.5) amended and (3.8) repealed, (HB 19-1264), ch. 420, p. 3678, � 8, effective June 30; (2.5), (2.7), IP(3)(f), (3.3), (3.5), (3.6)(a)(I), and (3.6)(b) amended, (HB 19-1172), ch. 136, p. 1729, � 255, effective October 1. L. 2021: (1), (2.7), (3.5)(b), (3.6), (4)(a)(II.5), (4)(b), (5)(b)(III), (6), IP(7), (7)(i), and (7)(j) amended, (4)(a)(II.7) and (7.5) added, and (7)(d), (10), and (11) repealed, (HB 21-1233), ch. 385, p. 2578, � 4, effective June 30. L. 2024: (2)(a), (2)(b), (2.5), (4)(a)(II.7), (4)(b)(II)(D), (5)(b)(II), and (5)(b)(III) amended and (4)(a)(II.8), (4)(b)(II)(E), (13), (14), and (15) added, (SB 24-126), ch. 211, p. 1291, � 7, effective August 7; (12) added, (HB 24-1036), ch. 373, p. 2536, � 34, effective August 7.
Editor's note: (1) Subsections (2), (4), and (5)(b)(III) were amended in House Bill 01-1364. Those amendments were superseded by the amendments to said subsections in House Bill 01-1090, effective January 1, 2003.
(2) Amendments to subsection (2.5) by House Bill 13-1183 and Senate Bill 13-221 were harmonized.
(3) Section 9 of chapter 10 (SB 14-019), Session Laws of Colorado 2014, provides that changes to this section by the act apply to income tax years commencing on or after January 1, 2013, and any other income tax years that are open under � 39-21-107 or 39-21-108.
(4) Amendments to subsections (2.7) and (3.3) by HB 19-1172 and HB 19-1264 were harmonized.
Cross references: (1) For the legislative declaration contained in the 2001 act amending subsections (1), (2), (3), (4), and (5)(b)(III), see section 1 of chapter 133, Session Laws of Colorado 2001.
(2) For the legislative declaration contained in the 2008 act amending subsections (3)(b), (3)(e), the introductory portion to subsection (3)(f), subsections (3)(f)(I), (3.3), and (3.5) and enacting subsection (3.7), see section 1 of chapter 448, Session Laws of Colorado 2008.
(3) For the legislative declaration in the 2013 act amending subsections (2), (2.5), the introductory portion to subsection (3), and subsections (3.3), (6), (10), and (11) and adding subsections (2.7) and (3.6), see section 1 of chapter 251, Session Laws of Colorado 2013.
(4) For the legislative declaration in SB 24-126, see section 1 of chapter 211, Session Laws of Colorado 2024. For the legislative declaration in HB 24-1036, see section 1 of chapter 373, Session Laws of Colorado 2024.
39-22-522.5. Conservation easement tax credits - dispute resolution - legislative declaration. (1) The general assembly hereby finds, determines, and declares that:
(a) Colorado's conservation easement program is an important preservation tool used to balance economic needs with natural resources such as land and water preservation. Colorado's conservation easement tax credit and the federal tax deduction have allowed many farmers and ranchers the opportunity to donate their development rights to preserve a legacy of open spaces in Colorado for wildlife, agriculture, and ranching.
(b) Citizens throughout Colorado believe good, sound conservation practices are important to Colorado's quality of life, agriculture, and wildlife heritage;
(c) Colorado's conservation easement tax credit program was designed to give landowners an incentive to conserve and preserve their land in a predominantly natural, scenic, or open condition;
(d) While the department of revenue has allowed the great majority of claimed conservation easement tax credits, hundreds of claimed credits have been denied but have not yet been finally adjudicated through the existing administrative process;
(e) Due to the unique issues of confidentiality and multiple interested and related parties involved in the litigation of disputed conservation easement tax credits, the general assembly determines that it is appropriate to enact procedural changes that will provide for equitable and expedited litigation or resolution of these cases;
(f) It is the intent of the general assembly to enact procedural changes that further important matters of public policy concerning the equitable and efficient resolution of disputes regarding claimed conservation easement tax credits. It is the intent of the general assembly that any appeal brought pursuant to subsection (2) of this section shall be expedited to the extent practicable and administered in the manner deemed most efficient and fair by the executive director or the district court.
(g) The procedural changes set forth in this section shall apply to any dispute regarding a tax credit from a donation of a conservation easement made on or after January 1, 2000, for which a final determination has not been issued;
(h) It is the intent of the general assembly to provide taxpayers with incentives to waive an administrative hearing and proceed directly to a de novo appeal to the district court in accordance with the procedures set forth in this section. The incentives include waiver of the bond requirement and waiver of accrual of interest and penalties during the time the matter is on appeal to the district court.
(i) The general assembly strongly encourages the executive director of the department of revenue to agree to waive interest and penalties for tax matters representatives and credit buyers who have acted in good faith to resolve disputed conservation easement tax credits; and
(j) This section is intended to effect changes to the law that are procedural or remedial in nature. The procedural changes set forth in this section shall not be construed to take away or impair any vested right acquired under existing law, or to create any new obligation, impose any new duty, or attach any new disability with respect to any past transaction or consideration. The provisions of this section are designed to address matters of public policy related to the fair and equitable resolution of conservation easement tax credit disputes in accordance with applicable laws and court rules.
(2) For any credit claimed pursuant to section 39-22-522, for which a notice of deficiency, notice of disallowance, or notice of rejection of refund claim has been mailed by the department of revenue as of May 1, 2011, but for which a final determination has not been issued before May 19, 2011, the tax matters representative may elect to waive the administrative process provided by section 39-21-103 and appeal the notice of deficiency, disallowance, or rejection of refund claim directly to a district court in accordance with the following provisions, which also apply to an appeal filed in accordance with subsection (6) of this section; except that paragraphs (a), (c), and (d) of this subsection (2) shall not apply to such an appeal:
(a) The tax matters representative shall make the election by mailing a written notice of appeal that includes the certified signature of the tax matters representative to the executive director and the district court for the county that has venue in the case as specified in paragraph (b) of this subsection (2) on or before October 1, 2011. The notice shall be sent by certified mail.
(b) Appeals brought pursuant to this section shall be filed in the district court for the county where the land encumbered by the easement is located. At the discretion of the chief justice, the state may be divided into three regions for purposes of consolidating appeals, with each region consisting of the following judicial districts:
Region Judicial Districts
Region 1 1st, 2nd, 8th, 13th, 17th, 18th, 19th, and 20th
Region 2 3rd, 4th, 10th, 11th, 12th, 15th, and 16th
Region 3 5th, 6th, 7th, 9th, 14th, 21st, and 22nd
(c) If a tax matters representative elects to waive the administrative process and appeal directly to a district court pursuant to this subsection (2), no surety bond or other deposit shall be required in connection with the appeal. This paragraph (c) shall not apply to tax matters representatives who do not elect to waive the administrative process.
(d) If the tax matters representative elects to waive the administrative process and appeal directly to a district court pursuant to this subsection (2), additional interest and penalties shall cease to accrue while the matter is on appeal before the district court, beginning with the date the notice of appeal is received by the district court. This paragraph (d) shall not apply to tax matters representatives who do not elect to waive the administrative process.
(e) Upon receipt of the notice of appeal by the court, the executive director shall be deemed to be a party to such appeal, and the clerk of the district court shall docket the cause as a civil action. The appellant shall cause summons to be issued and cause the same to be served upon the executive director in accordance with the manner provided by law in civil cases. The answer of the executive director shall contain a brief, plain statement of the legal issues, a detailed itemization of the total amount in controversy, and any proposal regarding the joinder or consolidation of related parties and appeals.
(f) Any transferee of the tax credit or any other person who has claimed a tax credit related to the tax matters representative's claimed conservation easement tax credit shall be allowed to intervene as a matter of right pursuant to the Colorado rules of civil procedure.
(g) Notice of the date of any hearing or any phase of the trial shall be mailed to the tax matters representative, any other party, and to the executive director at least thirty days prior thereto.
(h) Jurisdiction to hear and determine appeals pursuant to this section is conferred upon the district courts of this state. A court, in its discretion, may allow for the assertion, consolidation, and settlement of any claims at law or at equity, for the intervention of additional parties, and for such other matters as the court deems appropriate in accordance with any applicable laws or court rules governing such issues; except that resolution of disputes between private parties may be limited to the third phase of the case as described in paragraph (m) of this subsection (2). In determining matters regarding joinder or consolidation, the court may consider common issues of law and fact, including but not limited to ownership of the property subject to the easement, relationships of taxpayers, and location of the easements.
(i) Following the court's order identifying the parties and consolidating cases and parties, the court may hold a hearing to determine the validity of the conservation easement credit claimed pursuant to section 39-22-522 and to determine any other claims or defenses touching the regularity of the proceedings. The court shall determine whether the donation is eligible to qualify as a qualified conservation contribution. The court may set an expedited briefing schedule and give the matter priority on the docket. The court may order preliminary discovery, limited to validity of the easement credits and any other claims or defenses raised at this stage of the proceeding.
(j) Upon a determination of validity of the credit as claimed, the court may schedule a case management conference with all parties to the proceeding. Any case management conference shall address the proceedings as set forth in paragraph (m) of this subsection (2). Prior to the case management conference, the court may order all parties to make the following disclosures:
(I) The department of revenue shall disclose, consistent with any orders of the court, individuals with knowledge of, and documents related to:
(A) Notices to the tax matters representative disallowing the conservation easement credit;
(B) Notices to any taxpayer of deficiency or rejection of claim for refund;
(C) Correspondence with the tax matters representative or donee of the easement as well as any party to the conservation easement tax credit action;
(D) Appraisals and review appraisals or other expert reports used in connection with review of the tax matters representative's application for tax credit;
(E) Tax returns of the tax matters representative, transferee, or any party to the conservation easement tax credit action, for relevant tax years; and
(F) Statements of adjustment.
(II) The tax matters representative shall disclose individuals with knowledge of, and documents related to:
(A) Tax returns for the relevant tax years;
(B) The appraisal used to determine the value of the easement;
(C) The conservation easement deed and amendments;
(D) Agreements between the tax matters representative and the transferees; and
(E) Any other expert report, basis, or other evidence relating to the valuation and substantiation of the amount of the underlying easement or credit.
(III) Transferees or other persons claiming all or part of the conservation easement tax credit who are parties to the conservation easement tax credit action shall disclose individuals with knowledge of, and documents related to:
(A) Agreements related to the transfer of credits;
(B) Tax returns for the relevant tax years; and
(C) Any other expert report, basis, or other evidence relating to the valuation and substantiation of the amount of the underlying easement or credit.
(k) The court may make any order it deems appropriate to control and limit discovery to avoid unnecessary duplication between or among parties, including setting such limitations in accordance with the phases of the proceedings as set forth in paragraph (m) of this subsection (2).
(l) In advance of the trial date, the court may require the parties to confer and submit a proposed trial management order to the court.
(m) After a determination pursuant to paragraph (i) of this subsection (2) of the validity of the credit as claimed, the court shall resolve all remaining issues as follows:
(I) The first phase shall be limited to issues regarding the value of the easement.
(II) The second phase shall be limited to determinations of the tax, interest, and penalties due and apportionment of such tax liability among persons who claimed a tax credit in relation to the conservation easement. The conservation easement tax credit action shall be final at the conclusion of the second phase as to the department of revenue and as to any taxpayer, transferee, or other party with regard to that party's tax credit dispute with the department of revenue.
(III) The third phase shall address all other claims related to the conservation easement tax credit, including those between and among the tax matters representative, transferees, other persons claiming a tax credit in connection with the donation, and any third party joined as a party to the action. The department shall not be required to participate in or be a party to this third phase. Any participation in these proceedings by parties other than the tax matters representative, transferees, or other persons who have claimed all or part of a conservation easement tax credit is limited to this third phase.
(n) The district court shall hear the appeal in accordance with the Colorado rules of civil procedure and the rules of evidence.
(o) The chief justice of the supreme court may designate judges to hear appeals brought pursuant to this subsection (2), and may determine that only judges so designated may hear such appeals. For the convenience of the parties and in order to facilitate the use of available court facilities, hearings may be conducted at the discretion of the court in any county within the region for which venue has been established for a case pursuant to paragraph (b) of this subsection (2).
(p) The district court shall enter judgment on its findings. The court shall have the authority to establish the amount of any deficiency and to waive or otherwise modify the amount of any interest, penalties, or other amounts owed. The court shall indicate in any order whether the judgment of the court is a final judgment subject to appeal as to any party.
(q) It is the intent of the general assembly that any appeals brought pursuant to this subsection (2) shall be expedited to the extent practicable and administered in the manner deemed most efficient and fair by the courts.
(3) A tax matters representative who does not make an election to waive a hearing pursuant to subsection (2) of this section and appeal directly to a district court may send a written request for hearing and final determination by certified mail to the executive director on or before October 1, 2011. If a tax matters representative files a request pursuant to this subsection (3), the executive director shall issue a final determination on or before July 1, 2014, unless the executive director and the tax matters representative mutually agree in writing to extend such date to a specified date. The executive director shall send a copy of the final determination to the tax matters representative by certified mail on or before July 1, 2014. If the United States post office returns the final determination as undeliverable by certified mail, the department shall then mail the final determination in accordance with section 39-21-105.5. This subsection (3) shall apply only to those tax matters representatives for which a notice of deficiency, notice of disallowance, or notice of rejection of refund claim has been mailed by the department of revenue as of May 1, 2011, but for which a final determination has not been issued before May 19, 2011.
(4) The executive director shall issue a final determination on or before July 1, 2016, for any tax matters representative who does not make an election to waive a hearing pursuant to subsection (2) of this section or file a written request for final hearing and final determination with the executive director pursuant to subsection (3) of this section. The executive director shall send a copy of the final determination to the tax matters representative by certified mail on or before July 1, 2016. If the United States post office returns the final determination as undeliverable by certified mail, the department shall then mail the final determination in accordance with section 39-21-105.5. If a tax matters representative does not make an election to waive a hearing pursuant to subsection (2) of this section or file a written request for final hearing and final determination with the executive director pursuant to subsection (3) of this section, any person who has claimed a credit or who may be eligible to claim a tax credit in relation to the tax matters representative's donation may petition the department on or before November 1, 2011, to change the tax matters representative's designation. The executive director shall promulgate rules on or before September 1, 2011, specifying the procedures for a change to the tax matters representative's designation when the executive director determines that the tax matters representative is unavailable or unwilling to act as the tax matters representative. If the department grants the petition, the new tax matters representative may file an appeal pursuant to subsection (2) of this section or file a written request for final hearing and final determination with the executive director pursuant to subsection (3) of this section within thirty days of the department's order regarding the petition. This subsection (4) shall apply only to those tax matters representatives for which a notice of deficiency, notice of disallowance, or notice of rejection of refund claim has been mailed by the department of revenue as of May 1, 2011, but for which a final determination has not been issued before May 19, 2011.
(5) In order to expedite the equitable resolution of requests for an administrative hearing regarding any conservation easement tax credit, avoid inconsistent determinations, and allow the executive director or the executive director's designee to consider the full scope of applicable issues of law and fact, the executive director or the executive director's designee shall have discretion to issue orders as set forth in paragraphs (a) to (e) of this subsection (5) as follows:
(a) To consolidate cases involving common or related issues of fact or law. In identifying related cases, the executive director or the executive director's designee may consider any common issues of law or fact, including but not limited to common ownership of the property subject to the easement, relationships of the taxpayers, and location of the easements.
(b) To issue a final order finding that a case cannot reasonably be resolved through the administrative process and transferring jurisdiction of the case to the district court in accordance with subsection (2) of this section. Such a final order may issue for reasons including but not limited to a waiver of administrative process pursuant to paragraph (a) of subsection (2) of this section by another tax matters representative where consolidation would otherwise be appropriate pursuant to paragraph (a) of this subsection (5). Prior to issuance of such a final order, the parties shall have the opportunity to file written briefs addressing the proposed transfer.
(c) If a tax matters representative fails to appear at a hearing or the tax matters representative has failed to adequately participate in such hearing, including but not limited to a failure to file the required pleadings or to appear at a scheduled conference, the executive director may without further proceedings issue a final determination.
(d) To invite participation in the administrative process by any person who may be affected or aggrieved by a final determination, including but not limited to transferees. Such participation shall include the right to be admitted as a party to a hearing. Upon the person's filing of a written request setting forth a brief and plain statement of the facts that entitle the person to be admitted and the matters to be decided, the executive director or the executive director's designee shall have the authority to admit such person for limited purposes. This process shall be available only to persons who have claimed a credit or who may be eligible to claim a tax credit in relation to the conservation easement.
(e) If a tax matters representative has not provided any document related to the credit that was required to be provided as part of the taxpayer's return, including the return itself, or, if requested by the department for conservation easements donated prior to January 1, 2014, a copy of the complete appraisal obtained at the time of donation, the department may send a written request to the taxpayer for such document. Failure to provide the requested documents within sixty days of any such request shall constitute grounds for the issuance of a final determination denying the credit.
(6) For any tax matters representative for which the executive director issued a final determination on or after May 1, 2011, the tax matters representative may appeal the final determination of the executive director pursuant to the provisions of section 39-21-105. The procedure governing such appeal shall be in accordance with the provisions of subsection (2) of this section; except that paragraphs (a), (c), and (d) of said subsection (2) shall not apply. If a tax matters representative fails to file a timely appeal pursuant to this subsection (6), any person who has claimed a credit or who may be eligible to claim a tax credit in relation to the tax matters representative's donation may petition the department to change the tax matters representative's designation within ten days after the final date for filing an appeal. The executive director shall promulgate rules on or before September 1, 2011, specifying the procedures for a change to the tax matters representative's designation when the executive director determines that the tax matters representative is unavailable or unwilling to act as the tax matters representative. If the department of revenue grants the petition, the new tax matters representative may file an appeal pursuant to the provisions of this subsection (6) within thirty days of the department's order regarding the petition.
(7) If the executive director fails to issue a final determination on or before the dates specified or agreed to in subsection (3) or (4) of this section, the authority of the executive director to dispute the claim of the credit shall be waived, the full amount of the credit in dispute shall be allowed, and no interest or penalties shall be imposed upon such amount.
(8) Repealed.
(9) The executive director shall send a notice to each tax matters representative eligible to waive a hearing and appeal a notice of deficiency, notice of rejection of refund claim, or notice of disallowance to a district court pursuant to subsection (2) of this section to notify the tax matters representative of the provisions of this section. The notice shall be sent by certified mail to the tax matters representative's last-known address on or before July 1, 2011. If the United States post office returns the notice as undeliverable by certified mail, the department shall then mail the notice in accordance with section 39-21-105.5. The notice shall not be included with any other mailing and shall include the words Important Tax Document Enclosed on the exterior of the mailing. The executive director shall further provide notice of the provisions of this section on the department of revenue's website and by such other means as the executive director deems appropriate. The executive director shall maintain adequate records to verify compliance with the provisions of this subsection (9).
(10) If the executive director makes a determination that the tax matters representative has transferred a disputed credit to another person who has not claimed the credit or that a person who claimed or may claim a disputed credit pursuant to section 39-22-522 cannot be identified or located, the executive director shall provide notice to such person as follows:
(a) The executive director shall file an affidavit with the district court having jurisdiction over an appeal of the credit setting forth that the executive director has made diligent inquiry and has been unable to locate such person.
(b) The district court shall then order a notice to be published by the department of revenue in some local newspaper of general circulation named by the judge and on the department's website. The notice shall identify the property that is subject to the conservation easement and the date of the donation, and shall explain the right of the person to request joinder in the action on the disputed credit before the court, the time and place at which such request must be filed, and the title and address of the court at which the request must be filed.
(11) If a tax matters representative proceeds with the hearing process before the executive director rather than appeal to a district court pursuant to subsection (2) of this section and either the tax matters representative or one or more transferees pays an amount on or before June 30, 2012, that satisfies a deficiency in an amount agreed to by the department of revenue for the tax owed by the tax matters representative or the transferee, all additional amounts of penalties and interest owed shall be waived.
(12) and (13) Repealed.
(14) Prior to the issuance of a final determination or the conclusion of an appeal of a notice of deficiency, notice of disallowance, or notice of rejection of refund claim for a tax credit claimed by a tax matters representative or a transferee pursuant to section 39-22-522, the executive director shall cease all actions to collect any amount of the disputed taxes, interest, or other charges asserted to be owed. The executive director shall provide notice of the provisions of this subsection (14) in accordance with subsection (9) of this section.
Source: L. 2011: Entire section added, (HB 11-1300), ch. 193, p. 741, � 1, effective May 19. L. 2013: (5)(e) and (12) amended, (SB 13-221), ch. 251, p. 1334, � 10, effective August 7. L. 2014: (8), (12)(a)(II), and (12)(a)(III) amended, (SB 14-117), ch. 385, p. 1922, � 9, effective July 1. L. 2017: (12) and (13) repealed, (HB 17-1137), ch. 45, p. 134, � 6, effective August 9. L. 2018: (8) repealed, (HB 18-1291), ch. 273, p. 1692, � 7, effective May 29.
Cross references: For the legislative declaration in the 2013 act amending subsections (5)(e) and (12), see section 1 of chapter 251, Session Laws of Colorado 2013.
39-22-523. Credit against tax - contributions to high technology scholarship program - mechanism to refund excess state revenues. (Repealed)
Source: L. 2000: Entire section added, p. 1319, � 2, effective August 2. L. 2010: Entire section repealed, (SB 10-212), ch. 412, p. 2032, � 1, effective July 1; entire section repealed, (HB 10-1256), ch. 133, p. 440, � 4, effective August 11.
39-22-524. Tax credit for individuals contributing matching funds for individual development accounts - repeal. (Repealed)
Source: L. 2000: Entire section added, p. 1473, � 2, effective May 31. L. 2001: (4) amended, p. 413, � 3, effective April 19; (5) amended, p. 396, � 7, effective August 8. L. 2002: (7)(a) amended, p. 863, � 6, effective August 7. L. 2010: (10) amended, (SB 10-212), ch. 412, p. 2035, � 9, effective July 1.
Editor's note: Subsection (10) provided for the repeal of this section, effective July 1, 2010. (See L. 2010, p. 2035.)
39-22-525. Contributions to Colorado institute of technology - credit against tax. (Repealed)
Source: L. 2000: Entire section added, p. 1438, � 1, effective May 31. L. 2002: (1), (4)(a), and (4)(c)(I) amended, p. 227, � 1, effective April 5. L. 2007: Entire section repealed, p. 27, � 1, effective August 3; entire section repealed, p. 58, � 2, effective August 3.
39-22-526. Credit for environmental remediation of contaminated land - legislative declaration - definition - repeal. (1) (a) For income tax years commencing on or after January 1, 2014, but prior to January 1, 2030, there is allowed a credit against the income taxes imposed by this article 22 for any approved environmental remediation of contaminated property to any taxpayer who meets the following requirements:
(I) The property where the environmental remediation takes place must be located within the state; and
(II) The taxpayer seeking the credit must possess a certificate issued by CDPHE pursuant to section 25-16-306 (5)(b) and subsection (3) of this section.
(b) (I) The tax credit allowed in this section must not exceed forty percent of the first seven hundred fifty thousand dollars expended for the approved remediation, and must not exceed thirty percent of the next seven hundred fifty thousand dollars expended for the approved remediation. For income tax years commencing on or after January 1, 2022, with respect to approved remediation of a site located in a rural community, the amount of the tax credit shall not exceed fifty percent of the first seven hundred fifty thousand dollars expended for the approved remediation, and must not exceed forty percent of the next seven hundred fifty thousand dollars expended for the approved remediation. A tax credit is not allowed for expenditures exceeding one million five hundred thousand dollars on any individual project.
(II) As used in this subsection (1)(b) and subsection (2)(b) of this section, rural community means:
(A) A municipality with a population of less than fifty thousand people that is not located within the Denver metropolitan area; or
(B) The unincorporated area of any county that is not located in the Denver metropolitan area and that has a total population of less than fifty thousand people.
(III) As used in this subsection (1)(b) and subsection (2)(b) of this section, Denver metropolitan area means Adams, Arapahoe, Boulder, and Jefferson counties, the city and county of Broomfield, the city and county of Denver, and all of Douglas county other than the town of Castle Rock and the town of Larkspur.
(c) If the credit allowed by this section exceeds the tax otherwise due, the excess credit may be carried forward and claimed on the earliest possible subsequent tax return for a period not to exceed five years.
(d) A taxpayer may transfer all or a portion of a tax credit granted pursuant to this subsection (1) to another taxpayer for such other taxpayer, as transferee, to apply as a credit against the taxes imposed by this article 22 subject to the following limitations:
(I) The taxpayer may only transfer a portion of the tax credit that the taxpayer has neither applied against the income taxes imposed by this article nor used to obtain a refund.
(II) The taxpayer may transfer a prorated portion of the tax credit to more than one transferee.
(III) Any transferee of a tax credit issued under this section may use the amount of the tax credits transferred to offset against any other tax due under this article 22. The transferor and the transferee of the tax credits shall jointly file a copy of the written transfer agreement with the Colorado department of public health and environment, referred to in this section as CDPHE, within thirty days after the transfer. Any filing of the written transfer agreement with CDPHE perfects the transfer, and CDPHE shall develop a system to track the transfers of tax credits and to certify the ownership of tax credits. A certification by CDPHE of the ownership and the amount of tax credits may be relied on by the department of revenue and the transferee as being accurate, and neither CDPHE nor the department of revenue shall adjust the amount of tax credits as to the transferee; except that CDPHE and the department of revenue retain any remedies they may have against the owner.
(IV) A transferor may transfer a credit pursuant to this paragraph (d) regardless of whether the transferor receives value in exchange for the transfer. The transferee may use the credit to pay, in whole or in part, the income tax obligation imposed on the transferee under this article. The transferee's use of a tax credit from a transferor under this section to pay taxes owed is not deemed a reduction in the amount of income taxes imposed by this article on the transferee.
(V) Repealed.
(VI) The transfer of a tax credit must occur prior to the due date imposed by this article, not including any extensions, for filing the transferee's income tax return.
(VII) A tax credit held by an individual either directly or as a result of distribution by a pass-through entity, but not a tax credit held by a transferee unless used by the transferee's estate for taxes owed by the estate, survives the death of the individual and may be claimed or transferred by the decedent's estate.
(VIII) The transferor of a tax credit transferred pursuant to this subsection (1)(d) is the tax matters representative in all matters with respect to the credit. The transferee is subject to the same statute of limitations with respect to the credit as the transferor of the credit.
(IX) and (X) Repealed.
(2) (a) For income tax years commencing on or after January 1, 2014, but prior to January 1, 2030, there is allowed to any qualified entity a transferable expense amount for expenses incurred by the qualified entity in performing approved environmental remediation. The transferable expense amount may only be transferred to a taxpayer to be claimed by the taxpayer as a credit pursuant to the provisions of this subsection (2). The transferrable expense amount is allowed to any qualified entity that meets the following requirements:
(I) The property where the environmental remediation takes place must be located within the state; and
(II) CDPHE must have issued a certificate for the property pursuant to section 25-16-306 (5)(b) and subsection (3) of this section.
(b) The transferable expense amount allowed in this section must not exceed forty percent of the first seven hundred fifty thousand dollars expended by the qualified entity for the approved remediation, and must not exceed thirty percent of the next seven hundred fifty thousand dollars expended by the qualified entity for the approved remediation; except that, for income tax years commencing on or after January 1, 2022, but before January 1, 2030, with respect to approved remediation of a site located in a rural community, the amount of the transferable expense shall not exceed fifty percent of the first seven hundred fifty thousand dollars expended for the approved remediation, and must not exceed forty percent of the next seven hundred fifty thousand dollars expended for the approved remediation. A transferable expense amount is not allowed for expenditures exceeding one million five hundred thousand dollars on any individual project.
(c) A qualified entity may transfer all or a portion of a transferable expense amount allowed pursuant to this subsection (2) to a taxpayer for such taxpayer, as transferee, to apply as a credit against the taxes imposed by this article 22 subject to the following limitations:
(I) The qualified entity may transfer a prorated portion of the transferable expense amount to more than one transferee.
(II) Any transferee of a transferable expense amount issued under this section may use the amount of the transferable expense amount transferred to offset against any other tax due under this article 22. The transferor and the transferee of the transferable expense amount shall jointly file a copy of the written transfer agreement with CDPHE within thirty days after the transfer. Any filing of the written transfer agreement with CDPHE perfects the transfer, and CDPHE shall develop a system to track the transfers of transferable expense amounts and to certify the ownership of transferable expense amounts. A certification by CDPHE of the ownership and the amount of transferable expense may be relied on by the department of revenue and the transferee as being accurate, and neither CDPHE nor the department of revenue shall adjust the amount of transferable expense as to the transferee; except that CDPHE and the department of revenue retain any remedies they may have against the owner.
(III) A qualified entity may transfer a transferable expense amount to be claimed as a credit by a transferee pursuant to this subsection (2) regardless of whether the qualified entity receives value in exchange for the transfer. The transferee may use the credit to pay, in whole or in part, the income tax obligation imposed on the transferee under this article. The transferee's use of a tax credit from a qualified entity under this section to pay taxes owed is not deemed a reduction in the amount of income taxes imposed by this article on the transferee.
(IV) Repealed.
(V) The transfer of a transferable expense amount to a transferee must occur prior to the due date imposed by this article, not including any extensions, for filing the transferee's income tax return.
(VI) A transferable expense amount held by a transferee's estate for taxes owed by the estate, survives the death of the transferee and may be claimed or transferred by the decedent's estate.
(VII) The qualified entity that transfers a transferable expense amount to be claimed as a credit by a transferee pursuant to this subsection (2) is the tax matters representative in all matters with respect to the credit.
(VIII) Repealed.
(d) As used in this subsection (2), qualified entity means a county, home rule county, city, town, home rule city, home rule city and county, school district, charter school, special district, district authorized by article 20 of title 30, article 25 of title 31, and articles 41 to 50 of title 37, state institution of higher education, quasi-governmental entity, or municipal, quasi-municipal, or public corporation organized pursuant to law, or a private nonprofit entity that is exempt from the income taxes imposed by this article 22.
(3) In addition to any other requirements of this section, a taxpayer shall submit a claim for a credit and a qualified entity shall submit a claim for a transferrable expense amount to CDPHE. The department shall issue certificates for the claims received in the order submitted. After certificates have been issued for credits and transferrable expense amounts in the aggregate amount of three million dollars for all taxpayers and qualified entities combined for the 2014 to 2021 calendar years and five million dollars for the 2022 to 2029 calendar years, any claims that exceed the amount allowed for the calendar year shall be placed on a wait list in the order submitted and a certificate shall be issued for use of the credit or transferrable expense amount in the next year for which the department has not issued credit certificates in excess of three or five million dollars respectively. The department shall not issue certificates for any calendar year, including certificates placed on a wait list for that year, in an aggregate amount that exceeds three or five million dollars respectively. Two million dollars of the five million dollar cap is reserved only for projects in a rural community. The remaining three million dollars each year may be used by rural or nonrural communities. No claim for a credit or a transferrable expense amount is allowed for any income tax year commencing on or after January 1, 2014, unless a certificate has been issued by the department pursuant to this subsection (3).
(3.5) In accordance with section 39-21-304 (1), which requires each bill that creates a new tax expenditure or extends an expiring tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that:
(a) The general legislative purposes of the income tax credit allowed by this section are:
(I) To induce certain designated behavior by taxpayers; and
(II) To provide tax relief for certain businesses or individuals;
(b) The specific legislative purpose of the income tax credit allowed by this section is to encourage voluntary environmental remediation of contaminated sites by providing a financial incentive to move forward with costly remediation projects; and
(c) In order to allow the general assembly and the state auditor to measure the effectiveness of achieving the purposes specified in subsections (3.5)(a) and (3.5)(b) of this section, CDPHE is required to provide data that indicates for each calender year how many projects qualified for the credit and the number of credit recipients.
(3.7) For income tax years commencing on or after January 1, 2024, but prior to January 1, 2025, every taxpayer exempt from taxes pursuant to section 39-22-112 that claims the credit allowed in this section shall file a return pursuant to section 39-22-601 (7)(b).
(4) This section is repealed, effective December 31, 2036.
Source: L. 2000: Entire section added, p. 891, � 2, effective January 1, 2001. L. 2005: IP(1) and (4) amended, p. 1471, � 1, effective June 7. L. 2014: Entire section R&RE, (SB 14-073), ch. 213, p. 793, � 1, effective August 6. L. 2022: IP(1)(a), (1)(b), (1)(c), IP(1)(d), (1)(d)(III), (1)(d)(VII), (1)(d)(VIII), IP(2)(a), (2)(b), IP(2)(c), (2)(c)(II), (2)(c)(VI), (2)(c)(VII), (2)(d), (3), and (4) amended, (1)(d)(V), (1)(d)(IX), (1)(d)(X), (2)(c)(IV), and (2)(c)(VIII) repealed, and (3.5) added, (HB 22-1392), ch. 412, p. 2912, � 2, effective June 7. L. 2024: IP(1)(a), (1)(a)(II), IP(2)(a), (2)(a)(II), (2)(b), (3), and (4) amended, (HB 24-1116), ch. 382, p. 2604, � 1, effective August 7; (3.7) added, (HB 24-1036), ch. 373, p. 2536, � 35, effective August 7.
Cross references: For the legislative declaration in HB 24-1036, see section 1 of chapter 373, Session Laws of Colorado 2024.