(1) The general assembly hereby finds and declares that:
Section 20 of article X of the state constitution, which was approved by the registeredelectors of this state in 1992, limits the annual growth of state fiscal year spending;
During the 1997-98 fiscal year, state revenues from sources not excluded from statefiscal year spending exceeded the limitation on state fiscal year spending;
When revenues exceed the state fiscal year spending limitation for any given fiscalyear, section 20 (7)(d) of article X of the state constitution requires that the excess revenues be refunded in the next fiscal year unless voters approve a revenue change allowing the state to keep the revenues;
In addition, section 20 (1) of article X of the state constitution states that refundsneed not be proportional when prior payments are impractical to identify or return and authorizes the use of any reasonable method for refunding excess revenues;
The state is required to refund during the 1998-99 fiscal year all revenues in excessof the state fiscal year spending limitation for the 1997-98 fiscal year; except that, if at the 1998 general election voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, the state is required to refund only that portion of the state excess revenues for the 1997-98 fiscal year that the voters have not authorized the state to retain;
It is within the legislative prerogative of the general assembly to enact legislation toimplement the refund of state excess revenues for the 1997-98 fiscal year in compliance with section 20 of article X of the state constitution;
It is a reasonable and necessary exercise of the legislative prerogative to determinethat, due to the impossibility of identifying or returning prior payments, it is not feasible to make proportional refunds of state excess revenues;
It is also a reasonable and necessary exercise of the legislative prerogative to determine what constitutes a reasonable method of refunding state excess revenues after consideration of the best information available at the time regarding: The amount and source of excess revenues to be refunded; the qualifications for and number of eligible recipients; the amount of refund each recipient should receive; the necessary procedures to claim and make refunds; and the related administrative expenses;
It is the considered judgment of the general assembly that:
The state excess revenues for the 1997-98 fiscal year are derived from a wide varietyof state taxes and fees ranging from state sales tax to severance and transportation taxes to health service fees to court fines to permit and license fees and to higher education fees and should, therefore, be returned to as large a group of Colorado residents as is identifiable and economically feasible;
It is not feasible to make proportional refunds of state excess revenues for the 199798 fiscal year due to the impossibility of identifying or returning prior payments;
It is reasonable and fair to refund state excess revenues for the 1997-98 fiscal yearto a large group of individuals as a refund of state sales tax revenues since more Coloradans pay state sales tax than any other state tax;
The state collected over one billion four hundred fourteen million dollars in statesales tax revenues during the 1997-98 fiscal year from which the refund of state excess revenues may be made;
Refunding state excess revenues for the 1997-98 fiscal year through the state incometax system in the manner set forth in this section is a reasonable method for refunding such excess revenues; and
The most cost-effective and expeditious method of refunding state excess revenuesfor the 1997-98 fiscal year is through the state income tax system but that a refund offset against state income tax liability is merely a mechanism for refunding said state excess revenues to a broad spectrum of persons.
(2) (a) As used in this section, "qualified individual" means:
A natural person who is domiciled in this state for the entire taxable year commencing on January 1, 1998, and ending December 31, 1998, and who is required to file a Colorado individual income tax return for that tax year pursuant to section 39-22-601 (1)(a) or who files a Colorado individual income tax return to claim a refund of Colorado income tax withheld from wages for that tax year; or
Any natural person who is domiciled in this state for the entire taxable year commencing on January 1, 1998, and ending December 31, 1998, and who is at least eighteen years of age as of December 31, 1997; or
A natural person who died during the taxable year commencing on January 1, 1998,and ending December 31, 1998, who was domiciled in this state from January 1, 1998, until the date of death, and whose estate or spouse is required to file a Colorado individual income tax return for that tax year pursuant to section 39-22-601 (1)(a) or whose estate or spouse files a Colorado income tax return to claim a refund of Colorado income tax withheld from wages for that tax year; or
A natural person who died during the taxable year commencing on January 1, 1998,and ending December 31, 1998, who was domiciled in this state from January 1, 1998, until the date of death, and who was at least eighteen years of age as of December 31, 1997.
(b) "Qualified individual" does not include:
Any natural person who was convicted of a felony and who served a sentence ofincarceration in a correctional facility operated by or under contract with the department of corrections or in a county or municipal jail awaiting transfer to the department of corrections pursuant to section 16-11-308, C.R.S., or in both such facility and jail for a total of one hundred eighty days or more during the 1997-98 fiscal year, regardless of whether such person meets the qualifications set forth in paragraph (a) of this subsection (2);
Any natural person who is convicted of a misdemeanor or is adjudicated for an offense that would constitute a misdemeanor if committed by an adult and who is incarcerated in a county or municipal jail for a total of one hundred eighty days or more during the 1997-98 fiscal year, regardless of whether such person meets the qualifications set forth in paragraph (a) of this subsection (2);
Any person under eighteen years of age who is adjudicated for an offense that would constitute a felony if committed by an adult and who was committed to the department of human services for a total of one hundred eighty days or more during the 1997-98 fiscal year, regardless of whether such person meets the qualifications set forth in paragraph (a) of this subsection (2).
With respect to the taxable year commencing on January 1, 1998, and ending December 31, 1998, there shall be allowed to each qualified individual a state sales tax refund in an amount specified in subsection (4) of this section with respect to the income taxes imposed by this article.
The amount of the refund allowed under this section shall be as follows:
(a) For a qualified individual filing a single return for the 1998 tax year:
If the qualified individual's federal adjusted gross income for the 1998 tax year is lessthan or equal to twenty thousand dollars, the refund shall be in the amount of one hundred fortytwo dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of ninety-two dollars;
If the qualified individual's federal adjusted gross income for the 1998 tax year isgreater than twenty thousand dollars but not more than fifty thousand dollars, the refund shall be in the amount of one hundred ninety-five dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of one hundred twenty-six dollars;
If the qualified individual's federal adjusted gross income for the 1998 tax year isgreater than fifty thousand dollars but not more than ninety-five thousand dollars, the refund shall be in the amount of two hundred seventy-six dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixtyfirst general assembly, in which case the refund shall be in the amount of one hundred seventyeight dollars;
If the qualified individual's federal adjusted gross income for the 1998 tax year isgreater than ninety-five thousand dollars, the refund shall be in the amount of three hundred eighty-four dollars, unless, at the 1998 general election, voters statewide approve House Bill 981256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of two hundred forty-eight dollars;
(b) For two qualified individuals filing a joint return for the 1998 tax year:
If the qualified individuals' aggregate federal adjusted gross income for the 1998 taxyear is less than or equal to twenty thousand dollars, the refund shall be in the amount of two hundred eighty-four dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of one hundred eighty-four dollars;
If the qualified individuals' aggregate federal adjusted gross income for the 1998 taxyear is greater than twenty thousand dollars but not more than fifty thousand dollars, the refund shall be in the amount of three hundred ninety dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of two hundred fifty-two dollars;
If the qualified individuals' aggregate federal adjusted gross income for the 1998 taxyear is greater than fifty thousand dollars but not more than ninety-five thousand dollars, the refund shall be in the amount of five hundred fifty-two dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of three hundred fifty-six dollars;
If the qualified individuals' aggregate federal adjusted gross income for the 1998 tax year is greater than ninety-five thousand dollars, the refund shall be in the amount of seven hundred sixty-eight dollars, unless, at the 1998 general election, voters statewide approve House Bill 98-1256, enacted at the second regular session of the sixty-first general assembly, in which case the refund shall be in the amount of four hundred ninety-six dollars.
(5) (a) (I) Except as otherwise provided in subparagraph (II) of this paragraph (a), any refund allowed pursuant to this section shall be claimed by a qualified individual as defined in subparagraph (I) or (III) of paragraph (a) of subsection (2) of this section by filing a 1998 income tax return with the department of revenue no later than April 15, 1999.
Any refund allowed pursuant to this section shall be claimed by a qualified individual as defined in subparagraph (I) or (III) of paragraph (a) of subsection (2) of this section who is granted an extension of time to file a 1998 income tax return by filing a 1998 income tax return with the department of revenue no later than October 15, 1999. Such qualified individual shall not be required to pay all or any portion of the qualified individual's net tax liability due prior to October 15, 1999, in order to be granted an extension of time to file said tax return; except that, pursuant to section 39-22-621, such qualified individual may be subject to a late payment penalty and interest on any net income tax liability not paid by April 15, 1999.
The department of revenue shall not allow said refund claimed on any 1998 incometax return not filed in compliance with the provisions of this article. In no event shall the refund claimed by a qualified individual as defined in subparagraph (I) or (III) of paragraph (a) of subsection (2) of this section on any 1998 income tax return be:
(A) Disallowed if said return is filed on or before October 15, 1999; and (B) Allowed if said return is filed after October 15, 1999.
Any refund allowed pursuant to this section shall be claimed by a qualified individual as defined in subparagraph (II) or (IV) of paragraph (a) of subsection (2) of this section by filing a 1998 income tax return with the department of revenue no later than April 15, 1999. The department of revenue shall not allow said refund claimed by a qualified individual as defined in subparagraph (II) or (IV) of paragraph (a) of subsection (2) of this section on any 1998 income tax return filed with the department of revenue after April 15, 1999.
(I) Notwithstanding any provision of paragraph (b) of this subsection (5) to the contrary, a qualified individual as defined in subparagraph (II) or (IV) of paragraph (a) of subsection (2) of this section who claims a property tax assistance grant pursuant to section 3931-101 or a heat or fuel expenses assistance grant pursuant to section 39-31-104 may claim a refund authorized by this section on the assistance grant application form described in section 39-31-102 (2). Claiming a refund on such assistance grant application form shall be in lieu of claiming the refund on an income tax return pursuant to paragraph (b) of this subsection (5). Any refund claimed pursuant to this paragraph (c) shall be claimed on or before April 15, 1999.
(II) The department of revenue shall not allow a refund authorized by this section that is claimed on an assistance grant application form if:
The assistance grant application form is filed after April 15, 1999; or
The qualified individual has claimed the refund authorized by this section on anincome tax form filed in accordance with paragraph (b) of this subsection (5) for the tax year for which the refund is allowed.
(5.5) (a) The department of revenue shall make a state sales tax refund of excess revenues for the 1996-97 fiscal year to any qualified individual, as defined in paragraph (a) of subsection (2) of this section as said section existed for purposes of refunding excess revenues for the 1996-97 fiscal year and prior to the amendments to said section contained in House Bill 98S-1003, enacted at the second extraordinary session of the sixty-first general assembly, who, pursuant to a rule of the department of revenue, was not allowed such state sales tax refund because of the failure to pay all or any portion of such qualified individual's net tax liability due prior to a certain date.
The department of revenue shall notify each qualified individual described in paragraph (a) of this subsection (5.5) of the allowance of such refund and make payment of such refunds to such qualified individuals no later than September 30, 1999.
The amount of any state sales tax refund made pursuant to this subsection (5.5) thatis outstanding for more than six months after the date such refund was issued to the taxpayer by the department of revenue shall be added to and refunded with the state excess revenues pursuant to section 24-77-103.8, C.R.S.
If the refund allowed under this section exceeds the income taxes otherwise due onthe claimant's income, the amount of the refund not used as an offset against income taxes may not be carried forward as an offset against subsequent years' income tax liability and shall be refunded to the claimant.
In addition to any other penalties allowed by law, any person who claims but is noteligible to claim the refund allowed pursuant to this section shall be subject to the criminal penalties imposed pursuant to section 39-21-118, as applicable.
The state sales tax refund allowed to any qualified individual under this section shallnot be reported by the department of revenue as a payment of a refund, credit, or offset of state income taxes to such qualified individual in any information return required to be filed pursuant to federal law.
The executive director shall not print individual income tax forms for the 1998 taxable year until the results of the 1998 general election are known so that forms will reflect the impact of the results of said election on the amount of the refund to be allowed in accordance with subsection (4) of this section.
The department of revenue shall identify any qualified individual who has beenconvicted of a felony and who, at the time of filing for a refund pursuant to this section, is incarcerated in a correctional facility operated by or under contract with the department of corrections or in a county or municipal jail awaiting transfer to a correctional facility pursuant to section 16-11-308, C.R.S. The department of revenue shall transfer the amount of any refund owed to said qualified individual to the department of corrections. The department of corrections shall transmit the amount of said refund to the clerk of the district court which issued an order for payment of restitution or an order for costs pursuant to section 18-1.3-701, C.R.S. Such refund shall be credited in the priority specified in section 16-11-101.6 (1), C.R.S.
The department of corrections, the department of human services, and each countyof the state, to the extent each such county has the capability within existing resources, shall provide in a timely manner the information requested by the department of revenue necessary to identify the persons specified in paragraph (b) of subsection (2) of this section and in subsection (10) of this section. The information shall be provided in the form requested by the department of revenue. The department of revenue shall maintain the confidentiality of any social security number received pursuant to this subsection (11).
Source: L. 97, 1st Ex. Sess.: Entire section added, p. 1, § 1, effective October 22. L. 98,
2nd Ex. Sess.: (1)(b), (1)(e), (1)(f), (1)(e), and (2) to (7) amended and (8) to (11) added, p. 1, § 1, effective September 16. L. 99: (5.5) added, p. 1364, § 1, effective June 3. L. 2002: (10) amended, p. 1557, § 350, effective October 1. L. 2004: (10) amended, p. 1209, § 89, effective August 4. L. 2007: (5.5)(c) amended, p. 2049, § 95, effective June 1.
Editor's note: This section was enacted at the first extraordinary session of the sixty-first general assembly in 1997 to provide a method of refunding revenues in excess of the state fiscal year spending limitation for the 1996-97 state fiscal year as required by section 20 of article X of the state constitution (TABOR). It establishes a one-time sales tax refund credit against state individual income tax to qualified individuals.
Cross references: For the legislative declaration contained in the 2002 act amending subsection (10), see section 1 of chapter 318, Session Laws of Colorado 2002.