Page 1
February 8, 2022 HB 22-1109
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0537
Rep. Woog; Bird
Sen. Liston; Kolker
Date:
Bill Status:
Fiscal Analyst:
February 8, 2022
House Business
David Hansen | 303-866-2633
David.Hansen@state.co.us
Bill Topic: ON-DEMAND AIR CARRIER AIRCRAFT SALES TAX EXEMPTION
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill exempts aircraft purchases by or for use by on-demand air carriers in the state
from sales and use tax from January 1, 2023, to December 31, 2030. Beginning in
FY 2022-23, the bill decreases state and local revenue from sales and use tax and
increases state workload.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 22-1109
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue General Fund ($47,920 to $119,800) ($98,593 to $246,480)
Expenditures
- -
Transfers - -
Other Budget Impacts TABOR Refund ($47,920 to $119,800) ($98,593 to $246,480)
Page 2
February 8, 2022 HB 22-1109
Summary of Legislation
Beginning January 1, 2023, through December 31, 2030, the bill exempts aircraft purchases by or for
use by on-demand air carriers in the state from sales and use tax.
Background
On-demand air carriers are authorized by the Federal Aviation Administration (FAA) to
operate on-demand, unscheduled air service through a certification process. Based on a 2019 analysis
of the state’s on-demand aircraft used outside the state sales tax exemption by the Office of the
State Auditor (OSA), an on-demand air carrier includes services such as air charter, cargo, air
ambulance, and firefighting services on flights not scheduled in advance, or those that have four or
fewer scheduled flights per route, per week. The analysis found there were about 38 on-demand
air carriers based in Colorado operating about 115 aircraft primarily within the state. The OSA review
of the tax expenditure is available on the General Assembly’s website at:
https://leg.colorado.gov/sites/default/files/2019-te6_on-demand_aircraft.pdf
The on-demand aircraft used outside the state sales tax exemption was created by House Bill 14-1374,
and applies to sales of new or used aircraft purchased from July 1, 2014 to June 30, 2019.
State Revenue
The bill is expected to decrease General Fund revenue between $47,920 and $119,800 in FY 2022-23
(half-year impact), and between $98,590 and $246,480 in FY 2023-24, with similar reductions in future
years. Based on sales in prior years, the analysis assumes sales of three on-demand aircraft each year
with sales prices between $1.1 million and $2.7 million in FY 2022-23. In FY 2023-24, sales prices are
increased 2.9 percent based on Legislative Council Staff’s December 2021 forecast for the
Denver-Aurora-Lakewood consumer price index. To the extent that sales and prices differ from the
assumptions used in this fiscal note, actual revenue impacts will be higher or lower. Sales and use tax
revenue is subject to TABOR.
State Expenditures
The bill will minimally increase workload for the Department of Revenue to update guidance, forms,
and process aircraft-related returns. The fiscal note assumes that workload impacts can be met with
existing resources.
Other Budget Impacts
TABOR refunds. The bill is expected to decrease the amount of state revenue required to be refunded
to taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
December 2021 LCS revenue forecast. A forecast of state revenue subject to TABOR is not available
beyond FY 2023-24.
Page 3
February 8, 2022 HB 22-1109
Because TABOR refunds are paid from the General Fund, decreased General Fund revenue will lower
the TABOR refund obligation, but result in no net change to the amount of General Fund otherwise
available to spend or save.
Local Government
The bill will decrease sales and use tax revenue for state-collected local governments that incorporate
the exemption and conform to the state tax base. The bill includes the exemption among other optional
sales and use tax exemptions for state-collected local governments. The impact to local governments
cannot be estimated due to data availability.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed, except that the provisions relating to the sales and use tax exemption take
effect on January 1, 2023.
State and Local Government Contacts
Counties Information Technology Municipalities
Personnel Regional Transportation District Revenue
State Auditor Special Districts Transportation
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.