(1) Interest shall be allowed and paid upon any overpayment in respect to any tax or any charge on oil and gas production imposed pursuant to articles 22 to 29 of this title, article 60 of title 34, or article 3 of title 42, C.R.S., at the rate imposed under section 39-21-110.5. Such interest shall be allowed and paid as follows:
In the case of a credit, from the date of the overpayment to the due date of the amount against which the credit is taken;
In the case of a refund, from the date of the overpayment to a date, to be determinedby the executive director of the department of revenue or his delegate, preceding the date of the refund by not more than thirty days, whether or not such refund is accepted by the taxpayer after tender of such refund to the taxpayer. The acceptance of such refund shall be without prejudice to any right of the taxpayer to claim any additional overpayment and interest thereon.
(1.5) Notwithstanding any other provision of this section to the contrary, a payment not made incident to a bona fide and orderly discharge of an actual liability or a liability reasonably assumed to be imposed by law is not an overpayment for the purposes of this section only, and interest is not payable on the payment. For purposes of this subsection (1.5), the following burdens of proof shall apply:
If a taxpayer's total payments are less than or equal to twice the amount of the actualtax liability, then the department shall bear the burden of proving, by a preponderance of the evidence, that such payments were not made incident to a bona fide and orderly discharge of an actual liability or a liability reasonably assumed to be imposed by law; and
If a taxpayer's total payments are more than twice the amount of the actual tax liability, then the taxpayer shall bear the burden of proving, by a preponderance of the evidence, that such payments were made incident to a bona fide and orderly discharge of an actual liability or a liability reasonably assumed to be imposed by law.
Any portion of any tax or of a charge on oil and gas production imposed pursuant toarticles 22 to 29 of this title, article 60 of title 34, or article 3 of title 42, C.R.S., or any interest, assessable penalty, additional amount, or addition to a tax or charge which has been erroneously refunded shall bear interest at the rate imposed under section 39-21-110.5 from the date of the payment of the refund.
If any overpayment of any tax or of a charge on oil and gas production imposedpursuant to articles 22 to 29 of this title, article 60 of title 34, or article 3 of title 42, C.R.S., is refunded within ninety days after the last date prescribed for filing the return of such tax or charge, determined without regard to any extension of time for filing the return, no interest shall be allowed under subsection (1) of this section on such overpayment.
If the amount of any income tax is reduced by reason of a carry-back of a net operating loss, such reduction in tax shall not affect the computation of interest under this section for the period ending with the last day of the taxable year in which the net operating loss arises. If any overpayment of income tax results from a carry-back of a net operating loss, such overpayment shall be deemed not to have been made prior to the close of the taxable year in which such net operating loss arises.
Source: L. 65: p. 1139, § 2. C.R.S. 1963: § 138-9-9. L. 73: p. 1418, § 104. L. 77: IP(1),
(2), and (3) amended, pp. 1768, 1854, §§ 7, 9, effective January 1, 1978. L. 79: IP(1), (2), and
amended, p. 1500, § 25, effective January 1, 1980. L. 81: IP(1) and (2) amended, p. 1864, § 3, effective June 8. L. 86: (2) amended, p. 1111, § 8, effective July 1. L. 89: (2) and (3) amended, p. 1596, § 10, effective July 1, 1993. L. 90: IP(1), (2), and (3) amended, p. 1724, § 11, effective May 1; IP(1), (2), and (3) amended, p. 1725, § 12, effective July 1, 1993. L. 2009: (1.5) added, (HB 09-1219), ch. 71, p. 241, § 1, effective March 25.
Editor's note: Amendments to the introductory portion to subsection (1) and subsections (2) and (3) by Senate Bill 77-144 and House Bill 77-1076 were harmonized.