(1) The general assembly declares that the purpose of the tax expenditure in this section is to assist small businesses in expanding their operations in Colorado.
(2) As used in this section, unless the context otherwise requires:
"Federal marginal income tax rate" means the federal income tax rate at which anadditional dollar of taxable income would be taxed.
"Inflation" means the annual percentage change in the United States department oflabor, bureau of labor statistics, consumer price index for Denver-Aurora-Lakewood for all items and all urban consumers, or its applicable predecessor or successor index.
"Property tax" means the ad valorem tax imposed pursuant to section 3 of article X ofthe state constitution but does not include the graduated annual specific ownership tax imposed pursuant to section 6 of article X of the state constitution.
"Taxpayer" includes an organization exempt from federal taxation pursuant to section 501 (c) of the internal revenue code.
(3) (a) For any income tax year commencing on or after January 1, 2015, but prior to January 1, 2019, a taxpayer who qualifies under subsection (3)(b) of this section is allowed a credit against the tax imposed by this article 22 that is equal to a percentage of the property taxes paid for personal property in Colorado during the income tax year. For a given income tax year, a taxpayer's percentage is equal to one hundred percent minus the sum of the taxpayer's federal marginal income tax rate for the year and the state income tax rate for the year; except that the percentage is equal to one hundred percent for an organization that:
Is exempt from federal taxation pursuant to section 501 (c) of the internal revenuecode; and
Does not have business personal property that is used in a trade or business on whichthe organization pays unrelated business income tax.
To qualify for a tax credit under this section, a taxpayer must have fifteen thousanddollars or less worth of personal property on which property taxes are paid in Colorado during an income tax year commencing in 2015, or have less than an inflation-adjusted amount for each income tax year thereafter. These annual limits are based on the total actual value of the taxpayer's personal property.
A taxpayer may not claim a tax credit under this section for the payment of delinquent property taxes that were owed for a prior property tax year.
The amount of the credit under this section that exceeds the taxpayer's income taxesdue is refunded to the taxpayer.
To claim a credit under this section, a taxpayer must submit to the department ofrevenue a copy of a property tax statement described in section 39-10-103 for all of the taxpayer's personal property for the property tax year for which the credit is claimed.
The department of revenue shall provide the joint budget committee with a copy ofthe portion of the 2017 tax profile and expenditure report created pursuant to section 39-21-303 that relates to the credit created in this section.
This section is repealed, effective July 1, 2021.
Source: L. 2014: Entire section added, (HB 14-1279), ch. 340, p. 1513, § 1, effective August 6. L. 2017: IP(3)(a) and (6) amended, (SB 17-267), ch. 267, p. 1468, § 25, effective May 30. L. 2018: (2)(b) amended, (HB 18-1375), ch. 274, p. 1722, § 82, effective May 29.
Cross references: For the legislative declaration in SB 17-267, see section 1 of chapter 267, Session Laws of Colorado 2017.