(1) (a) Except as otherwise provided in subsection (1)(b) of this section, on and after July 1, 2017, all retail sales of marijuana upon which the retail marijuana sales tax is imposed pursuant to section 39-28.8-202 are exempt from taxation under part 1 of this article 26 by the state or by any special district or other limited purpose governmental entity that was not levying sales tax on retail sales of marijuana under part 1 of this article 26 before July 1, 2017. Notwithstanding any other law to the contrary, any special district or other limited purpose governmental entity that was levying sales tax on retail sales of marijuana under part 1 of this article 26 before July 1, 2017, retains its authority to continue levying sales tax upon retail sales of marijuana under this article 26.
(b) Any metropolitan district that levies a general uniform sales tax as authorized by section 32-1-1106 (1), health assurance district that levies a general uniform sales tax as authorized by section 32-19-112 (1), or health service district that levies a general uniform sales tax as authorized by section 32-19-112 (1) may levy its general uniform sales tax on retail sales of marijuana upon which the retail marijuana sales tax is imposed pursuant to section 39-28.8-202 regardless of whether or not the district was levying any sales tax on such sales before July 1, 2017.
(2) The governing body of any special district or limited purpose governmental entity that was levying sales tax upon retail marijuana sales before July 1, 2017, and the governing body of any metropolitan district, health assurance district, or health service district that is authorized by subsection (1)(b) of this section to levy a general uniform sales tax on retail marijuana sales shall determine whether the levying of such sales tax complies with the Colorado constitution and applicable decisions of the Colorado supreme court and Colorado court of appeals and, if the governing body of any such special district or limited purpose governmental entity determines that additional voter approval is required to levy sales tax upon retail sales of marijuana, the special district or limited purpose governmental entity shall not resume levying sales tax upon such sales until voter approval is obtained.
(3) The storage, use, or consumption of any retail marijuana that is exempt from sales tax by operation of subsection (1) of this section is exempt from taxation under the provisions of part 2 of this article 26.
Source: L. 2017: Entire section added, (SB 17-267), ch. 267, p. 1471, � 28, effective May 30. L. 2018: Entire section amended, (SB 18-088), ch. 3, p. 27, � 2, effective February 22; (1)(b) and (2) amended, (SB 18-259), ch. 406, p. 2390, � 2, effective January 1, 2019. L. 2021: (3) added, (HB 21-1177), ch. 55, p. 229, � 6, effective September 7.
Editor's note: Section 3 of chapter 3 (SB 18-088), Session Laws of Colorado 2018, provides that the provisions of this act that authorize the continued levying of sales tax on retail sales of marijuana apply retroactively, but not retrospectively, curatively, and remedially to retail marijuana sales occurring on and after July 1, 2017, but, notwithstanding that authorization, authorized sales taxes that were not actually collected on retail sales of marijuana occurring on and after July 1, 2017, but before February 22, 2018, shall not be collected.
Cross references: (1) For the legislative declaration in SB 17-267, see section 1 of chapter 267, Session Laws of Colorado 2017.
(2) For the legislative declaration in SB 18-088, see section 1 of chapter 3, Session Laws of Colorado 2018.
39-26-730. Sales and use tax exemption forms - simplification - legislative declaration. (1) The general assembly hereby finds and declares that:
(a) In many cases, a person who wishes to establish the right to obtain an exemption allowed by this part 7 is required to complete a form created by the department of revenue which, depending on which exemption is sought, may be described as an affidavit, application, certificate, certification, declaration, or statement; and
(b) The burdens of establishing the right to an exemption allowed by this part 7 that are imposed on persons making tax-exempt purchases should be minimized to the extent feasible without impairing the proper administration of the exemptions.
(2) The department of revenue shall examine its sales and use tax exemption forms and its requirements relating to their use and, to the extent feasible without impairing the proper administration of the exemptions, simplify the forms, which simplification may include elimination of certain forms or consolidation of forms, and form-related requirements for persons making tax-exempt purchases as allowed by this article 26. The department shall complete the initial simplification on or before July 1, 2023, and shall continue to pursue simplification thereafter as the provisions of this part 7 or other relevant circumstances change.
Source: L. 2022: Entire section added, (HB 22-1039), ch. 54, p. 253, � 1, effective August 10.
39-26-731. Eligible decarbonizing building materials - tax preference performance statement - legislative declaration - definition - repeal. (1) (a) The general assembly hereby finds and declares that:
(I) The general assembly has committed to reduce greenhouse gases through numerous policy and regulatory measures to meet the goals established in 2019;
(II) Great quantities of emissions are released during the manufacture and transport of building materials used in construction projects;
(III) There is great potential for businesses and individuals in the state to reduce greenhouse gas emissions in construction projects by purchasing and using eligible decarbonizing building materials, which are building materials with a maximum acceptable global warming potential as determined by the office of the state architect;
(IV) Providing a sales and use tax exemption for eligible decarbonizing building materials will encourage businesses and individuals to purchase and use those building materials rather than industry standard materials; and
(V) The purchase and use of eligible decarbonizing building materials will help improve environmental outcomes and accelerate necessary greenhouse gas reductions to protect public health and the environment and conserve a livable climate by incorporating emissions information from throughout the supply chain and product life cycle into building material purchasing and use decisions.
(b) In accordance with section 39-21-304 (1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to:
(I) Induce certain designated behavior by taxpayers, specifically the purchase and use of eligible decarbonizing building materials; and
(II) Contribute to the state's effort to achieve its climate goals.
(c) The general assembly and the state auditor shall measure the effectiveness of the exemption in achieving the purposes specified in subsection (1)(b) of this section based on the quantity of eligible decarbonizing building materials sold and used in the state. The Colorado energy office and office of the state architect shall provide the state auditor with any available information that would assist the state auditor's measurement.
(2) As used in this section, unless the context otherwise requires, eligible decarbonizing building materials means building materials that have a maximum acceptable global warming potential as determined by the office of the state architect pursuant to section 24-92-117. Eligible decarbonizing building materials includes:
(a) Asphalt and asphalt mixtures;
(b) Cement and concrete mixtures;
(c) Glass;
(d) Post-tension steel;
(e) Reinforcing steel;
(f) Structural steel; and
(g) Wood structural elements.
(3) On and after July 1, 2024, all sales, storage, and use of eligible decarbonizing building materials that are on the list of eligible materials maintained by the office of the state architect pursuant to section 24-92-117 (7), are exempt from taxation under parts 1 and 2 of this article 26.
(4) By January 1, 2024, the office of the state architect shall provide the list it compiles and maintains pursuant to section 24-92-117 (7) to the department of revenue. Based on the list from the office of the state architect, the department shall create and maintain a database of products, including the manufacturers of the products, that are eligible for the sales and use tax exemption allowed pursuant to this section for use by entities that sell decarbonizing building materials.
(5) This section is repealed, effective July 1, 2034.
Source: L. 2022: Entire section added, (SB 22-051), ch. 333, p. 2352, � 4, effective August 10.
39-26-732. Heat pump systems - tax preference performance statement - legislative declaration - definitions - repeal. (1) (a) The general assembly hereby finds and declares that:
(I) The general assembly has committed to reduce greenhouse gases through numerous policy and regulatory measures to meet the goals established in 2019;
(II) Great quantities of emissions are released in the traditional process of heating and cooling private sector commercial and residential buildings;
(III) There is great potential for businesses and individuals in the state to reduce greenhouse gas emissions generated in the heating and cooling of commercial and residential buildings by installing heat pump systems and heat pump water heaters, which reduce net greenhouse gas emissions;
(IV) Providing a sales and use tax exemption for heat pump systems and heat pump water heaters will encourage businesses and individuals to purchase and use heat pump systems and heat pump water heaters rather than traditional heating and cooling methods; and
(V) The purchase and use of heat pump systems and heat pump water heaters will benefit public health in the heating and cooling of homes and businesses and take advantage of latent heat sources and available renewable power during low demand periods.
(b) In accordance with section 39-21-304 (1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to:
(I) Induce certain designated behavior by taxpayers, specifically the purchase and use of heat pump systems and heat pump water heaters; and
(II) Contribute to the state's effort to achieve its climate goals.
(c) The general assembly and the state auditor shall measure the effectiveness of the exemption in achieving the purposes specified in subsection (1)(b) of this section based on the number of heat pump systems and heat pump water heaters sold and used in the state. The Colorado energy office shall provide the state auditor with any available information that would assist the state auditor's measurement.
(2) As used in this section, unless the context otherwise requires:
(a) (I) Air-source heat pump system means a system that:
(A) Is certified pursuant to the federal environmental protection agency's energy star program;
(B) Has a variable speed compressor;
(C) Is listed in the air-conditioning, heating, and refrigeration institute directory of certified product performance as a matched system; and
(D) Is installed by a licensed contractor, plumber, or employee of a gas utility in accordance with the national electrical code and the manufacturer's specifications.
(II) Air-source heat pump system may include an electric resistance heating element or a dual fuel system for supplemental heat so long as:
(A) The air-source heat pump is used as the primary source of a building's heat and is designed to supply at least eighty percent of total annual heating for the building;
(B) The system is capable of distributing produced heat to all conditioned areas of the building;
(C) The dual fuel system has a furnace with an annual fuel utilization efficiency rating of ninety percent or higher;
(D) All piping for a split system is installed by technicians certified to the NITC R78 brazing procedure; and
(E) The system is installed by technicians that are trained on the safe handling of flammable refrigerants.
(III) Air-source heat pump system includes mechanical and electrical equipment central to the operation of an air-source heat pump, including an upgraded electrical panel if necessary.
(b) (I) Ground-source heat pump system means a system that:
(A) Is certified to the international organization for standardization's latest standards;
(B) Is installed by a licensed contractor, plumber, or employee of a gas utility in accordance with the national electric code and manufacturer's specifications;
(C) Conforms to all applicable municipal, state, and federal codes, standards, regulations, and certifications;
(D) Has blowers that are variable speed, high-efficiency motors that meet or exceed efficiency levels listed in the national electrical manufacturers association MG1-1993 publication; and
(E) Complies with all state and local drinking water guidelines and regulations and public water system requirements.
(II) Ground-source heat pump system may include a dual fuel system so long as:
(A) The ground-source heat pump is used as the primary source of a building's heat and is designed to supply at least eighty percent of total annual heating for the building;
(B) The system is capable of distributing produced heat to all conditioned areas of the building;
(C) The furnace has an annual fuel utilization efficiency rating of ninety percent or higher;
(D) All piping for a split system is installed by technicians certified to the NITC R78 brazing procedure; and
(E) The system is installed by technicians that are trained on the safe handling of flammable refrigerants.
(III) Ground-source heat pump system includes mechanical and electrical equipment central to the operation of a ground-source heat pump, including an upgraded electrical panel if necessary.
(IV) Ground-source heat pump system may include a heat exchanger for water heating.
(c) Heat pump system means an air-source heat pump system, ground-source heat pump system, water-source heat pump system, combined water-source and air-source heat pump system, or variable refrigerant flow heat pump system.
(d) (I) Heat pump water heater means an electric water heater that uses heat pump technology to transfer heat from the surrounding air to water in a tank and that is certified pursuant to the federal environmental protection agency's energy star program.
(II) Heat pump water heater may include:
(A) An electric resistance heating element; and
(B) Mechanical and electrical equipment central to the operation of a heat pump water heater, including an upgraded electrical panel if necessary.
(e) (I) Water-source heat pump system means a system that:
(A) Is certified to the international organization for standardization's latest standards;
(B) Is installed by a licensed contractor, plumber, or employee of a gas or wastewater utility in accordance with the national electric code and manufacturer's specifications;
(C) Conforms to all applicable municipal, state, and federal codes, standards, regulations, and certifications;
(D) Has blowers that are variable speed, high-efficiency motors that meet or exceed efficiency levels listed in the national electrical manufacturers association MG1-1993 publication; and
(E) Complies with all state and local drinking water guidelines and regulations and public water system and wastewater system requirements.
(II) Water-source heat pump system may include a dual fuel system so long as:
(A) The water-source heat pump is used as the primary source of a building's heat and is designed to supply at least eighty percent of the total annual heating for the building;
(B) The system is capable of distributing produced heat to all conditioned areas of the building;
(C) The furnace has an annual fuel utilization efficiency rating of ninety percent or higher;
(D) All piping for a split system is installed by technicians certified to the NITC R78 brazing procedure; and
(E) The system is installed by technicians who are trained in the safe handling of flammable refrigerants.
(III) Water-source heat pump system includes mechanical and electrical equipment central to the operation of a water-source heat pump.
(f) (I) Variable refrigerant flow heat pump system means a system that:
(A) Is certified to the international organization for standardization's latest standards;
(B) Is installed by a licensed contractor, plumber, or employee of a gas or wastewater utility in accordance with the national electric code and manufacturer's specifications;
(C) Conforms to all applicable municipal, state, and federal codes, standards, regulations, and certifications;
(D) Has blowers that are variable speed, high-efficiency motors that meet or exceed efficiency levels listed in the national electrical manufacturers association MGI-1993 publication; and
(E) Complies with all state and local drinking water guidelines and regulations and public water system and wastewater system requirements.
(II) Variable refrigerant flow system may include a dual fuel system so long as:
(A) The variable refrigerant flow system is used as the primary source of a building's heat and is designed to supply at least eighty percent of the total annual heating for the building;
(B) The system is capable of distributing produced heat to all conditioned areas of the building;
(C) The furnace has an annual fuel utilization efficiency rating of ninety percent or higher;
(D) All piping for a split system is installed by technicians certified to the NITC R78 brazing procedure; and
(E) The system is installed by technicians who are trained in the safe handling of flammable refrigerants.
(III) Variable refrigerant flow system includes mechanical and electrical equipment central to the operation of a variable refrigerant flow system.
(3) On and after January 1, 2023, but before January 1, 2024, subject to the provisions of subsection (4) of this section, all sales, storage, and use of heat pump systems and heat pump water heaters that are used in commercial or residential buildings are exempt from taxation under parts 1 and 2 of this article 26.
(4) (a) (I) To be eligible for the sales and use tax exemption pursuant to this section, the purchaser of a heat pump system or heat pump water heater shall certify, as specified in subsection (4)(b) of this section, that all necessary mechanical, plumbing, and electrical work performed in connection with the installation of a heat pump system or heat pump water heater in a new or existing industrial, commercial, or multifamily residential building containing twenty thousand square feet or more of conditioned floor space will be performed by a contractor on the certified contractor list created pursuant to section 40-3.2-105.6 (3)(a), or by employees of a utility, subject to state licensing requirements and all applicable state and local rules, codes, and standards.
(II) The requirements of this subsection (4)(a) do not apply to the installation of a heat pump system or heat pump water heater that is limited to in-unit work in a multifamily building or unit and that is initiated by the owner or tenant of the multifamily building or unit.
(b) The purchaser shall certify, in a form and manner to be determined by the department of revenue, that the heat pump system or heat pump water heater will be installed in accordance with the provisions of subsection (4)(a) of this section, if applicable.
(5) This section is repealed, effective January 1, 2027.
Source: L. 2022: Entire section added, (SB 22-051), ch. 333, p. 2352, � 4, effective August 10. L. 2023: (3) and (5) amended, (HB 23-1272), ch. 167, p. 808, � 12, effective May 11.
Cross references: For the legislative declaration in HB 23-1272, see section 1 of chapter 167, Session Laws of Colorado 2023.
39-26-733. Residential energy storage systems - tax preference performance statement - legislative declaration - definition - repeal. (1) (a) In accordance with section 39-21-304 (1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to:
(I) Induce certain designated behavior by taxpayers, specifically the purchase and installation of residential energy storage systems; and
(II) Contribute to the state's effort to achieve its climate goals.
(b) The general assembly and the state auditor shall measure the effectiveness of the tax exemption in achieving the purposes specified in subsection (1)(a) of this section based on the number of residential energy storage systems sold and used in the state. The Colorado energy office shall provide the state auditor with any available information that would assist the state auditor's measurement.
(2) As used in this section, unless the context otherwise requires, energy storage system means any commercially available, customer-sited system, including batteries and the batteries paired with on-site generation, that is capable of retaining, storing, and delivering energy by chemical, thermal, mechanical, or other means.
(3) On and after January 1, 2023, all sales, storage, and use of energy storage systems that are used in a residential dwelling are exempt from taxation under parts 1 and 2 of this article 26.
(4) This section is repealed, effective January 1, 2033.
Source: L. 2022: Entire section added, (SB 22-051), ch. 333, p. 2352, � 4, effective August 10.
39-26-734. Rebuilding from declared wildfire disaster - tax preference performance statement - legislative declaration - definitions - repeal. (1) In accordance with section 39-21-304 (1), which requires each bill that creates a new 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 purpose of the exemption allowed by this section is to provide tax relief for certain individuals;
(b) The specific legislative purpose of the exemption allowed by this section is to provide financial relief to Coloradans recovering and rebuilding from declared wildfire disasters; and
(c) The general assembly and the state auditor shall measure the effectiveness of the exemption allowed by this section based on the number of wildfire exemption certificates issued pursuant to subsection (5) of this section, the number and amount of all refund claims allowed pursuant to this section, and an estimate by the state auditor of the proportion of homeowners affected by declared wildfire disasters who benefitted from the exemption in the rebuilding or repairing of their homes.
(2) As used in this section, unless the context otherwise requires:
(a) Building permit means the document or documents issued by a local government to a qualified homeowner showing the estimated amount of use tax collected, if any, in connection with rebuilding or repairing the qualified homeowner's qualified residential structure.
(b) Declared wildfire disaster means a wildfire that was declared a disaster emergency by the governor pursuant to section 24-33.5-704 (4) on or after January 1, 2020, but before January 1, 2023.
(c) Department means the department of revenue.
(d) Estimated construction and building materials cost means the cost amount used by the local government to collect estimated use tax in connection with the issuance of a building permit. If no estimated use tax has been collected, estimated construction and building materials cost means half of the total contract price or total cost for rebuilding or repairing a qualified residential structure.
(e) Executive director means the executive director of the department of revenue.
(f) Local government means a county, city and county, or municipality.
(g) Qualified homeowner means a homeowner that is rebuilding or repairing or has employed a contractor to rebuild or repair a qualified residential structure that the homeowner owned at the time of a declared wildfire disaster.
(h) Qualified residential structure means a residential structure that was damaged or destroyed by a declared wildfire disaster.
(i) Wildfire rebuild exemption certificate means a written certification provided by a local government to a qualified homeowner that certifies that one or more building permits specifically identified therein have been issued to the qualified homeowner for rebuilding or repairing a qualified residential structure.
(3) (a) The sale, storage, use, or consumption of construction and building materials used directly in rebuilding or repairing a qualified homeowner's qualified residential structure is exempt from taxation under parts 1 and 2 of this article 26 as set forth in this section.
(b) The exemption created in subsection (3)(a) of this section shall be administered solely as a refund allowed to qualified homeowners to be applied for in accordance with this section and section 39-26-703. No retailer may exempt any sale pursuant to this section.
(c) The exemption created in subsection (3)(a) of this section applies only to the state sales and use taxes levied pursuant to this article 26. Notwithstanding any other provision of law, the exemption shall not apply to the sales or use taxes levied by any local government, including any city, town, county, special purpose district, or limited purpose governmental entity; except that this subsection (3)(c) does not apply to the regional transportation district established by article 9 of title 32 or the scientific and cultural facilities district established by article 13 of title 32.
(4) (a) A qualified homeowner may claim a refund allowed pursuant to subsection (3) of this section for each qualified residential structure for which the qualified homeowner obtains a building permit and a wildfire rebuild exemption certificate issued by a local government in accordance with subsection (5) of this section.
(b) The amount of a refund claimed pursuant to this section shall be equal to four percent of the estimated construction and building materials cost for repairing or rebuilding the qualified residential structure that is the subject of the building permit and wildfire rebuild exemption certificate.
(c) A qualified homeowner must submit a claim for refund on the form and in the manner prescribed by the executive director. The claim for refund must include the wildfire rebuild exemption certificate issued in accordance with subsection (5) of this section and a true and correct copy of each building permit identified in the wildfire rebuild exemption certificate.
(d) The three-year application deadline in section 39-26-703 (2)(d) for a sales tax refund or refund of any use tax collected by a vendor does not apply to a claim for refund made pursuant to this section. A claim for refund made pursuant to this section must be filed on or before June 30, 2028.
(5) (a) The local government with jurisdiction to issue a building permit in an area affected by a declared wildfire disaster may issue a wildfire rebuild exemption certificate to a qualified homeowner. A wildfire rebuild exemption certificate must clearly identify the qualified homeowner, the contractor employed by the homeowner, if applicable, and each building permit issued by the local government to the qualified homeowner for rebuilding or repairing a qualified residential structure.
(b) To obtain a wildfire rebuild exemption certificate, a homeowner must certify, in a form prescribed by the executive director, that:
(I) The homeowner was the owner of each qualified residential structure to be rebuilt or repaired at the time the structure was damaged or destroyed by the declared wildfire disaster; and
(II) The replacement cost for each qualified residential structure to be rebuilt or repaired exceeds the homeowner's coverage under any homeowner's insurance policy associated with the structure.
(c) On or before September 30, 2023, and on or before September 30 of each calendar year thereafter through September 30, 2025, a local government shall provide the department with an electronic report of the number of wildfire rebuild exemption certificates issued by the local government for the preceding calendar year.
(6) The executive director shall:
(a) Provide a form for the wildfire rebuild exemption certificate to the proper official of the local government with jurisdiction to issue a building permit in an area after determining that the area was affected by a declared wildfire disaster;
(b) Modify existing forms or create new forms as necessary to facilitate refund claims made pursuant to this section; and
(c) Adopt rules for the administration and enforcement of this section.
(7) In making a refund or allowing a credit pursuant to section 39-26-703, the department shall prioritize applications for refunds submitted pursuant to this section over refund applications submitted pursuant to other provisions of law.
(8) This section is repealed, effective July 1, 2028.
Source: L. 2023: Entire section added, (HB 23-1240), ch. 171, p. 838, � 1, effective May 12.