HOUSE BILL 22-1418
BY REPRESENTATIVE(S) Herod and McCluskie, Ransom, Bernett, Bird,
Hooton, Jodeh, Lindsay, Lontine, McKean, Ricks, Snyder, Garnett;
also SENATOR(S) Hansen and Zenzinger, Rankin, Ginal.
C
ONCERNING THE EXTENSION OF THE PERIOD FOR WHICH UNUSED AND
EXPIRING
COLORADO JOB GROWTH INCENTIVE AND ENTERPRISE ZONE
INCOME TAX CREDITS MAY BE CARRIED FORWARD TO SUBSEQUENT
YEARS
, AND, IN CONNECTION THEREWITH , MAKING AN
APPROPRIATION
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, amend 24-46-106 as
follows:
24-46-106. Repeal of part. This part 1 is repealed, effective July 1,
2025 JULY 1, 2035.
SECTION 2. In Colorado Revised Statutes, add 24-46-107 as
follows:
24-46-107. Temporary extension of carry-forward provisions -
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. Colorado job growth incentive tax credit - enterprise zone tax credits
- definitions - repeal. (1) A
S USED IN THIS SECTION, UNLESS THE CONTEXT
OTHERWISE REQUIRES
:
(a) "O
FFICE" MEANS THE COLORADO OFFICE OF ECONOMIC
DEVELOPMENT CREATED IN SECTION
24-48.5-101.
(b) (I) "T
AXPAYER" MEANS ANY PERSON DOING BUSINESS IN THE
STATE
, INCLUDING AN AFFILIATED GROUP, THAT OPERATES IN A STRATEGIC
INDUSTRY THAT WAS DISPROPORTIONALLY IMPACTED BY THE
COVID-19
PANDEMIC AND EXPERIENCED SIGNIFICANT FINANCIAL HARDSHIP CAUSED BY
THE
COVID-19 PANDEMIC.
(II) "S
TRATEGIC INDUSTRY" AND "SIGNIFICANT FINANCIAL
HARDSHIP
" FOR PURPOSES OF THE DEFINITION OF "TAXPAYER" IN SUBSECTION
(1)(b)(I) OF THIS SECTION SHALL BE DETERMINED BY THE COMMISSION AND
THE OFFICE
. WHEN DETERMINING SIGNIFICANT FINANCIAL HARDSHIP , ANY
FINANCIAL ASSISTANCE OR RELIEF THAT THE TAXPAYER MAY HAVE
RECEIVED FROM OTHER SOURCES INCLUDING FEDERAL
, STATE, OR LOCAL
ASSISTANCE MAY BE CONSIDERED BUT SHALL NOT BE DISPOSITIVE FOR
PURPOSES OF ELIGIBILITY
.
(2) T
HE COMMISSION MAY ALLOW A TAXPAYER TO CARRY FORWARD
FOR A PERIOD OF FIVE YEARS THE TAX CREDITS SET FORTH IN SECTION
39-22-531 AND IN ARTICLE 30 OF TITLE 39 THAT WOULD OTHERWISE EXPIRE
BETWEEN
JANUARY 1, 2021, AND DECEMBER 31, 2025; EXCEPT THAT THE
AGGREGATE AMOUNT OF ALL TAX CREDITS PERMITTED TO BE CARRIED
FORWARD PURSUANT TO THIS SUBSECTION
(2) IS ZERO DOLLARS FOR THE
FIRST TWO YEARS IN THE FIVE
-YEAR PERIOD, TEN MILLION DOLLARS FOR THE
THIRD YEAR IN THE FIVE
-YEAR PERIOD, AND FIFTEEN MILLION DOLLARS FOR
THE FOURTH AND FIFTH YEAR IN THE FIVE
-YEAR PERIOD AND THE TAX CREDIT
SET FORTH IN SECTION
39-30-103.5 IS NOT ELIGIBLE FOR THE FIVE-YEAR
CARRY
-FORWARD PERIOD SET FORTH IN THIS SECTION . TAXPAYERS MUST
APPLY TO THE COMMISSION AND THE OFFICE PURSUANT TO SUBSECTION
(3)
OF THIS SECTION FOR APPROVAL TO CARRY FORWARD THE TAX CREDITS AS
SET FORTH IN THIS SUBSECTION
(2).
(3) (a) A
TAXPAYER MAY APPLY FOR APPROVAL BY THE COMMISSION
TO CARRY FORWARD A TAX CREDIT AS SET FORTH IN SUBSECTION
(2) OF THIS
SECTION IN ACCORDANCE WITH TIMING
, DEADLINES, POLICIES, AND
PAGE 2-HOUSE BILL 22-1418 PROCEDURES ESTABLISHED BY THE COMMISSION , IN CONSULTATION WITH
THE OFFICE
, AND AS FOLLOWS:
(I) A
TAXPAYER SHALL APPLY ONE TIME TO THE COMMISSION FOR
THE EXTENDED CARRY
-FORWARD PERIOD SET FORTH IN SUBSECTION (2) OF
THIS SECTION AND MUST IDENTIFY IN THE APPLICATION ALL OF THE
ANTICIPATED CREDITS THAT THE TAXPAYER REQUESTS TO EXTEND FOR EACH
TAX YEAR THAT THE EXTENDED PERIOD APPLIES TO
;
(II) A
T A MINIMUM, THE APPLICATION MUST INCLUDE CERTIFICATION
BY THE TAXPAYER
'S PRESIDENT, CHIEF EXECUTIVE OFFICER, OR CHIEF
FINANCIAL OFFICER THAT
, BASED ON THE TAXPAYER 'S CURRENT AND
EXPECTED FINANCIAL RESULTS
, IT IS ANTICIPATED THAT THE TAXPAYER WILL
NOT BE ABLE TO USE THE TAX CREDITS BEFORE THE CREDITS EXPIRE AS THE
RESULT OF LOSSES EXPERIENCED DURING TAX YEARS
2020 AND 2021 DUE TO
THE
COVID-19 PANDEMIC;
(III) T
HE APPLICATION MUST INCLUDE DOCUMENTATION FROM THE
TAXPAYER DEMONSTRATING SIGNIFICANT FINANCIAL HARDSHIP CAUSED BY
THE
COVID-19 PANDEMIC; AND
(IV) IN CONSULTATION WITH POTENTIAL APPLICANTS , THE
COMMISSION AND THE OFFICE SHALL DETERMINE ADDITIONAL APPROPRIATE
POLICIES
, PROCEDURES, REQUIREMENTS, AND DEADLINES TO ADMINISTER
THE APPLICATION PROCESS AND EXTENSION APPROVALS PURSUANT TO THIS
SECTION
, WHICH MAY INCLUDE ADDITIONAL VERIFICATION PROCEDURES TO
DEMONSTRATE THAT APPLICANTS ARE MAKING BONAFIDE REQUESTS FOR THE
FIVE
-YEAR EXTENSION.
(b) I
N CONSULTATION WITH THE OFFICE , THE COMMISSION SHALL
RECEIVE
, REVIEW, AND APPROVE APPLICATIONS BY TAXPAYERS ON A FIRST
COME
, FIRST SERVED, ROLLING BASIS. IN ADDITION TO THE APPLICATION
REQUIREMENTS SET FORTH IN SUBSECTION
(3)(a) OF THIS SECTION, THE
COMMISSION MAY CONSIDER ADDITIONAL ECONOMIC DEVELOPMENT
COMMITMENTS TO THE STATE BY THE TAXPAYER IN DETERMINING APPROVAL
OF APPLICATIONS INCLUDING
:
(I) T
HE SIZE OF THE TAXPAYER'S CURRENT OPERATION IN THE STATE
RELATIVE TO BOTH THE STATE AS A WHOLE AND THE REGION THE TAXPAYER
IS BASED IN
;
PAGE 3-HOUSE BILL 22-1418 (II) ANY STRATEGIC ECONOMIC DEVELOPMENT BENEFITS THAT THE
TAXPAYER PROVIDES WITH EXISTING OPERATIONS TO THE STATE IN TERMS
OF SUPPLY CHAIN
, BENEFITS TO OTHER INDUSTRIES, OR OTHER SPILLOVER
BENEFITS THAT THE APPLICANT
'S OPERATIONS PROVIDE TO THE STATE OR
REGION
; AND
(III) ANY ADDITIONAL FORTHCOMING ECONOMIC DEVELOPMENT
BENEFITS THAT THE TAXPAYER MAY PROVIDE TO THE STATE OR REGION
BASED ON COMMITMENTS THAT THE APPLICANT HAS RECENTLY MADE OR
PROPOSES THAT ARE OUTSIDE THE SCOPE OF THE ORIGINAL INCENTIVE
AWARD
.
(c) W
HEN AN APPLICATION IS APPROVED, THE COMMISSION SHALL
ISSUE LETTERS TO THE DEPARTMENT OF REVENUE AND APPROVED
TAXPAYERS THAT MUST SPECIFY THE TYPE AND AMOUNT OF CREDITS
ELIGIBLE FOR THE FIVE
-YEAR EXTENSION AND FOR WHAT YEARS IN THE
PERIOD THE EXTENSION IS ELIGIBLE
.
(4) T
HIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2035.
SECTION 3. In Colorado Revised Statutes, 39-22-531, amend (6)
and (13) as follows:
39-22-531. Colorado job growth incentive tax credit - rules -
definitions - repeal. (6) Except as provided in section 24-46-104.3
SECTIONS 24-46-104.3 AND 24-46-107, if the amount of the credit allowed
in this section exceeds the amount of income taxes otherwise due on the
taxpayer's income 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 the current income tax year may be carried forward and used as a credit
against subsequent years' income tax liability for a period not to exceed ten
years and shall be applied first to the earliest income tax years possible. Any
credit remaining after said period shall not be refunded or credited to the
taxpayer.
(13) This section is repealed, effective January 1, 2031
JULY 1,
2042.
SECTION 4. In Colorado Revised Statutes, 39-30-104, amend
(2)(c)(III) and (2.5) as follows:
PAGE 4-HOUSE BILL 22-1418 39-30-104. Credit against tax - investment in certain property
- definitions. (2) (c) (III) (A) Except as otherwise provided in section
24-46-104.3 SECTIONS 24-46-104.3 AND 24-46-107 and subsection
(2)(c)(III)(B) of this section, any excess credit allowed pursuant to this
subsection (2)(c) shall be an investment tax credit carryover to each of the
fourteen income tax years following the unused credit year.
(B) Except as otherwise provided in section 24-46-104.3
SECTIONS
24-46-104.3 AND 24-46-107, any excess credit allowed pursuant to this
subsection (2)(c) for a renewable energy investment made in an income tax
year commencing before January 1, 2018, shall be an investment tax credit
carryover for twenty-two income tax years following the year the credit was
originally allowed.
(2.5) (a) (I) Notwithstanding section 39-22-507.5 (7)(b),
EXCEPT AS
PROVIDED IN SECTION
24-46-107, and except as otherwise provided in
subsections (2.5)(a)(II) and (2.5)(b) of this section, any excess credit
allowed pursuant to this section shall be an investment tax credit carryover
to each of the twelve income tax years following the unused credit year.
(II) E
XCEPT AS PROVIDED IN SECTION 24-46-107, any excess credit
claimed pursuant to this section for a renewable energy investment made in
an income tax year commencing before January 1, 2018, shall be an
investment tax credit carryover for twenty income tax years following the
year the credit was originally allowed.
(b) (I) Except as provided in subparagraph (II) of this paragraph (b)
SECTION 24-46-107 AND SUBSECTION (2.5)(b)(II) OF THIS SECTION, a
taxpayer that deferred claiming any credit in excess of five hundred
thousand dollars during an income tax year commencing on or after January
1, 2011, but prior to January 1, 2014, pursuant to paragraph (b) of
subsection (2) SUBSECTION (2)(b) of this section shall be allowed to claim
the deferred credit as an investment tax credit carryover for twelve income
tax years following the year the credit was originally allowed plus one
additional income tax year for each income tax year that the credit was
deferred pursuant to paragraph (b) of subsection (2)
SUBSECTION (2)(b) of
this section.
(II) E
XCEPT AS PROVIDED IN SECTION 24-46-107, a taxpayer is
allowed to claim the deferred credit described in subparagraph (I) of this
PAGE 5-HOUSE BILL 22-1418 paragraph (b) SUBSECTION (2.5)(b)(I) OF THIS SECTION for a renewable
energy investment made in an income tax year commencing before January
1, 2018, as an investment tax credit carryover for twenty income tax years
following the year the credit was originally allowed plus one additional
income tax year for each income tax year that the credit was deferred
pursuant to paragraph (b) of subsection (2)
SUBSECTION (2)(b) of this
section.
SECTION 5. In Colorado Revised Statutes, 39-30-105.1, amend
(4)(a) as follows:
39-30-105.1. Credit for new enterprise zone business employees
- definitions. (4) (a) (I) Except as provided in section 24-46-104.3
SECTIONS 24-46-104.3 AND 24-46-107, for any income tax year commencing
on or after January 1, 2014, if the total amount of the credits claimed by a
taxpayer pursuant to subsections (1)(a)(I), (1)(b), and (3)(a) of this section
exceeds the amount of income taxes due on the income of the taxpayer in
the income tax year for which the credits are being claimed, the amount of
the credits not used as an offset against income taxes in said income tax
year is not 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 is applied first to the earliest income tax years possible. Any amount of
the credit that is not used during said period is not refundable to the
taxpayer.
(II) Except as provided in section 24-46-104.3
SECTIONS
24-46-104.3 AND 24-46-107, for any income tax year commencing on or
after January 1, 2014, if the total amount of credits claimed by a taxpayer
pursuant to subsections (1)(a)(II) and (3)(b) of this section exceeds the
amount of income taxes due on the income of the taxpayer in the income tax
year for which the credits are being claimed, the amount of credits not used
as an offset against income taxes in said income tax year is not allowed as
a refund but may be carried forward as a credit against subsequent years' tax
liability for a period not exceeding seven years and is applied first to the
earliest income tax years possible. Any amount of the credit that is not used
during said period is not refundable to the taxpayer.
SECTION 6. In Colorado Revised Statutes, 39-30-105.6, amend
(3) as follows:
PAGE 6-HOUSE BILL 22-1418 39-30-105.6. Credit against tax - rehabilitation of vacant
buildings. (3) E
XCEPT AS PROVIDED IN SECTION 24-46-107, if the amount
of the credit allowed pursuant to the provisions of this section exceeds the
amount of income taxes otherwise 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
may be carried forward as a credit against subsequent years' income tax
liability for a period not exceeding five years and shall be applied first to the
earliest income tax years possible. Any credit remaining after said period
shall not be refunded or credited to the taxpayer.
SECTION 7. Appropriation. For the 2022-23 state fiscal year,
$18,412 is appropriated to the office of the governor for use by economic
development programs. This appropriation is from the general fund and is
based on an assumption that the office will require an additional 0.2 FTE.
To implement this act, the office may use this appropriation for economic
development commission - general economic incentives and marketing.
SECTION 8. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly; except
that, if a referendum petition is filed pursuant to section 1 (3) of article V
of the state constitution against this act or an item, section, or part of this act
within such period, then the act, item, section, or part will not take effect
unless approved by the people at the general election to be held in
PAGE 7-HOUSE BILL 22-1418 November 2022 and, in such case, will take effect on the date of the official
declaration of the vote thereon by the governor.
____________________________ ____________________________
Alec Garnett Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 8-HOUSE BILL 22-1418