SUMMARY

November 17, 2022

2022COA132

No. 21CA1242, Anschutz v. Department of Revenue — Taxation 

— Colorado Income Tax Act of 1987 — Federal Taxable Income 

— Coronavirus Aid, Relief, and Economic Security (CARES) Act

A division of the court of appeals holds as a matter of first 

impression that the state income tax code incorporates 

retrospective changes to federal tax law in the calculation of taxable 

income.

The summaries of the Colorado Court of Appeals published opinions 

constitute no part of the opinion of the division but have been prepared by 

the division for the convenience of the reader. The summaries may not be 

cited or relied upon as they are not the official language of the division. 

Any discrepancy between the language in the summary and in the opinion 

should be resolved in favor of the language in the opinion.
COLORADO COURT OF APPEALS 2022COA132

Court of Appeals No. 21CA1242

City and County of Denver District Court No. 21CV31103

Honorable J. Eric Elliff, Judge

Philip Anschutz and Nancy Anschutz,

Plaintiffs-Appellants,

v.

Colorado Department of Revenue of the State of Colorado, and Mark 

Ferrandino, in his official capacity as Executive Director of the Colorado 

Department of Revenue,

Defendants-Appellees.

JUDGMENT REVERSED AND CASE

REMANDED WITH DIRECTIONS

Division III

Opinion by JUDGE TOW

Fox and Yun, JJ., concur

Announced November 17, 2022

Lewis Roca Rothgerber Christie LLP, James M. Lyons, Frederick J. Baumann, 

Kenneth F. Rossman, IV, Denver, Colorado, for Plaintiffs-Appellants

Philip J. Weiser, Attorney General, Russell Johnson, Senior Assistant Attorney 

General, Emma Garrison, Assistant Attorney General, Denver, Colorado, for 

Defendants-Appellees
1

¶ 1 The Colorado Constitution permits the General Assembly to 

define taxable income for state income tax purposes by reference to 

federal taxable income pursuant to federal tax law. Colo. Const. 

art. X, § 19. The General Assembly has explicitly done so in the 

Colorado Income Tax Act of 1987 (state income tax code). 

§§ 39-22-101 to -5304, C.R.S. 2022.

¶ 2 The question this appeal presents — one never before 

addressed by a Colorado appellate court — is whether a 

congressional amendment to federal income tax laws that lowers a 

taxpayer’s federal taxable income for prior tax years entitles a 

Colorado taxpayer to file an otherwise timely amendment to their 

state income tax return for those prior years in order to claim a 

refund.

¶ 3 Philip and Nancy Anschutz (the Anschutzes) say it does and 

filed an amended 2018 state income tax return to take advantage of 

just such a change to federal law. The Colorado Department of 

Revenue and its Executive Director, Mark Ferrandino (collectively, 

the Department) say it does not and denied the refund. When the 

Anschutzes appealed the denial pursuant to section 39-21-105, 
2

C.R.S. 2022, the district court agreed with the Department and 

granted the Department’s C.R.C.P. 12(b)(5) motion to dismiss. 

¶ 4 Because we agree with the Anschutzes, we reverse the district 

court’s judgment dismissing the Anschutzes’ claim and remand for 

further proceedings.

I. Legal Background

¶ 5 A Colorado taxpayer’s state income tax liability begins with 

their “federal taxable income, as determined pursuant to section 63 

of the internal revenue code.” § 39-22-104(1.7), C.R.S. 2022. That 

figure is then adjusted by certain additions and subtractions to 

arrive at the final taxable income. § 39-22-104(2)-(4). That 

adjusted amount is then multiplied by the statutory tax rate to 

determine the amount of tax owed. § 39-22-104(1.7). 

¶ 6 The state income tax code defines “internal revenue code” as 

“the provisions of the federal ‘Internal Revenue Code of 1986,’ as 

amended, and other provisions of the laws of the United States 

relating to federal income taxes, as the same may become effective 

at any time or from time to time, for the taxable year.” 
3

§ 39-22-103(5.3), C.R.S. 2022 (footnote omitted).1 The state income 

tax code further provides that “[a]ny term used in this article, 

except as otherwise expressly provided or clearly appearing from the 

context, shall have the same meaning as when used in a 

comparable context in the internal revenue code, as amended, in 

effect for the taxable period.” § 39-22-103(11).2 

¶ 7 On March 27, 2020, Congress enacted the Coronavirus Aid, 

Relief, and Economic Security (CARES) Act. Pub. L. No. 116-136, 

134 Stat. 281 (2020). The CARES Act modified several provisions of 

the IRC, including amending 26 U.S.C. § 461(l) to suspend the 

“excess business loss”3 deduction limits for the 2018 through 2020

1 Because the state income tax code’s use of the term “internal 

revenue code” encompasses more than just the federal Internal 

Revenue Code, we distinguish between the two by referring to the 

federal Internal Revenue Code of 1986 as the IRC.

2 This approach to state income taxation is known as “rolling 

conformity,” meaning a state “essentially incorporates all the new 

federal provisions into its state tax code automatically.” Andrew 

Appleby, Designing the Tax Supermajority Requirement, 71 Syracuse 

L. Rev. 959, 1001 (2021). 

3 “Excess business loss” means the excess (if any) of the aggregate 

deductions of the taxpayer attributable to trades or businesses of 

such taxpayer, over the sum of the aggregate gross income or gain 

of the taxpayer attributable to those trades or businesses plus 

$250,000 (or $500,000 in the case of a joint return). 26 U.S.C. 

§ 461(l)(3).
4

tax years, allowing taxpayers with losses in excess of the threshold 

to claim the entirety of the loss. CARES Act § 2304, 134 Stat. at 

356. In other words, for taxpayers who had such losses, the 

CARES Act provisions retroactively reduced their federal taxable 

income for tax years 2018 and 2019.4 

¶ 8 In June 2020, the Department adopted Emergency 

Rule 39-22-103(5.3). See Dep’t of Revenue Rule 39-22-103(5.3), 1 

Code Colo. Regs. 201-2 (effective June 2, 2020-Sept. 29, 2020) 

(Emergency Rule). The Emergency Rule was replaced with a 

permanent rule effective September 30, 2020. See Dep’t of Revenue 

Rule 39-22-103(5.3), 1 Code Colo. Regs. 201-2 (effective Sept. 30, 

2020). (Though the pertinent language of the rules is identical, we 

reference the Emergency Rule because it was in effect when the 

Department denied the Anschutzes’ refund claim.) The Emergency 

Rule states:

“Internal revenue code” does not, for any 

taxable year, incorporate federal statutory 

changes that are enacted after the last day of 

that taxable year. As a result, federal 

statutory changes enacted after the end of a

taxable year do not impact a taxpayer’s 

4 Such taxpayers’ federal taxable income would also be reduced for 

the 2020 tax year, but that is not relevant to this case. 
5

Colorado tax liability for that taxable year. 

Changes to federal statutes are incorporated 

into the term “internal revenue code” only to 

the extent they are in effect in the taxable year 

in which they were enacted and further taxable 

years.

Id.5

¶ 9 At around the same time, the General Assembly enacted 

section 39-22-104(3)(l)-(n), which prevents taxpayers from using 

certain CARES Act provisions in calculating their Colorado taxable 

income for tax years beginning after the enactment of the CARES 

Act and before January 1, 2021. Ch. 277, sec. 2, 

§ 39-22-104(3)(l)-(n), 2020 Colo. Sess. Laws 1358-59.6 This 

amendment requires taxpayers, in calculating their Colorado 

taxable income, to include the amount that their federal taxable 

income had been reduced by the CARES Act provisions. Id. 

Specifically, when calculating their taxable income for state tax 

purposes, taxpayers must now add back to their taxable income the 

5 In December 2020, the Office of Legislative Legal Services issued a 

memorandum stating that the Department’s interpretation of 

“internal revenue code” conflicted with the unambiguous language 

in section 39-22-103(5.3), C.R.S. 2022, and thus recommended 

against extending the rule. 

6 The bill became effective when the Governor signed it on July 11, 

2020. Ch. 277, sec. 8, 2020 Colo. Sess. Laws 1361.
6

amount by which their federal taxable income was reduced by any 

“excess business loss.” Id. § 39-22-104(3)(m), 2020 Colo. Sess. 

Laws at 1359. However, this provision only applies to taxable 

income for tax years ending after the enactment of the CARES Act 

but before January 1, 2021. Id.7 

II. The Anschutzes’ Amended Tax Return

¶ 10 In April 2020, in the wake of the passage of the CARES Act

and before the General Assembly amended the state income tax 

code, the Anschutzes filed amended federal and Colorado income

tax returns for the 2018 tax year, claiming the entirety of their

“excess business loss” and seeking income tax refunds. 

¶ 11 In September 2020, the Department rejected the Anschutzes’ 

state income tax refund claim, citing the Emergency Rule. The 

Anschutzes appealed the denial of their refund claim to the district 

7 The General Assembly further amended the state income tax code 

the following year by providing that, for tax years beginning in 

2021, taxpayers could subtract up to $300,000 of excess business 

losses and could carry over up to $150,000 per year in excess 

business loss from the 2021 tax year for up to the next four tax 

years. Ch. 5, sec. 1, § 39-22-104(4)(z), 2021 Colo. Sess. 

Laws 30-31. By its terms, this amendment applies only to taxable 

income in tax years beginning in 2021, see id. § 39-22-104(4)(z)(I),

2021 Colo. Sess. Laws at 30, and thus, like the 2020 amendment, 

has no bearing on the Anschutzes’ amended 2018 tax return. 
7

court, asserting a claim for allowance of their 2018 tax year refund

and, among others, a claim for a declaratory judgment that “[w]hen 

Congress passed the CARES Act, the tax provisions included 

therein were immediately incorporated into Colorado tax law 

pursuant to Colorado statute.”8 The Department moved to dismiss 

the complaint for failure to state a claim. The district court granted 

the motion to dismiss, concluding that section 39-22-103(5.3) is 

ambiguous, and that the Department’s interpretation was 

reasonable, consistent with the General Assembly’s later 

amendments to the statute, and entitled to deference.

III. Analysis

¶ 12 The parties disagree about how to interpret the definition of 

internal revenue code in section 39-22-103(5.3): “the provisions of 

the [IRC], as amended, and other provisions of the laws of the 

United States relating to federal income taxes, as the same may 

8 The Anschutzes also sought a declaratory judgment that the 

Emergency Rule was invalid. The district court concluded that 

their request was untimely and that it did not have jurisdiction to 

set aside the rule. The Anschutzes did not appeal the district 

court’s order in this regard.
8

become effective at any time or from time to time, for the taxable 

year.” (Footnote omitted.)

A. Standard of Review

¶ 13 We review de novo a district court’s grant of a C.R.C.P. 12(b)(5) 

motion to dismiss. Wagner v. Grange Ins. Ass’n, 166 P.3d 304, 307 

(Colo. App. 2007). “Questions of statutory interpretation are also 

subject to de novo review.” Nieto v. Clark’s Mkt., Inc., 2021 CO 48, 

¶ 12.

¶ 14 “When interpreting a statute, our primary aim is to effectuate 

the legislature’s intent.” Id. We look to the entire statutory scheme 

to give consistent, harmonious, and sensible effect to all parts and 

apply words and phrases in accordance with their plain and 

ordinary meaning. Id. “[W]here the plain language is 

unambiguous, we apply the statute as written.” Id.

¶ 15 We may consider and even defer to an agency’s interpretation 

of the statute. BP Am. Prod. Co. v. Colo. Dep’t of Revenue, 2016 CO 

23, ¶ 15. Deference to the agency is only warranted, however, when 

a statute “is subject to different reasonable interpretations and the 

issue comes within the administrative agency’s special expertise.” 

Huddleston v. Grand Cnty. Bd. of Equalization, 913 P.2d 15, 17 
9

(Colo. 1996). Deference is not warranted where the agency’s 

interpretation is contrary to the statute’s plain language. BP Am. 

Prod., ¶ 15.

B. Interpretation of the State Income Tax Code

¶ 16 The Anschutzes contend that the statutory definition of 

internal revenue code automatically incorporates congressional 

amendments to the IRC, even if such changes relate to previous tax 

years. The Department contends that the definition of internal 

revenue code only incorporates amendments to the IRC to the 

extent that they are in effect for the taxable year in which they were 

enacted and for future taxable years.

¶ 17 Based on the plain language of the state income tax code, we 

agree with the Anschutzes’ interpretation.

1. Plain Language

¶ 18 Given the grammatical structure of the statutory language, 

there are two types of federal statutory provisions that make up the 

definition of internal revenue code: (1) those found in the IRC “as 

amended” and (2) those found elsewhere in the laws of the United 

States to the extent they relate to federal income taxes. 

§ 39-22-103(5.3). However, both provisions are modified by the 
10

phrase “for the taxable year.” Id.; see also People v. Lovato, 2014 

COA 113, ¶ 24 (Under the series-qualifier canon of statutory 

construction, “when several words are followed by a clause which is 

applicable as much to the first and other words as to the last, the 

natural construction of the language demands that the clause be 

read as applicable to all.” (quoting In re Estate of Pawlik, 845 

N.W.2d 249, 252 (Minn. Ct. App. 2014))).

¶ 19 Section 39-22-103(5.3) plainly and unambiguously states that 

the phrase “internal revenue code” includes “the provisions of the

[IRC], as amended, . . . for the taxable year,” without any limitation 

as to when any amendment is enacted or goes into effect. See

Nieto, ¶ 22 (“[J]ust as important as what the statute says is what 

the statute does not say.” (quoting Mook v. Bd. of Cnty. Comm’rs, 

2020 CO 12, ¶ 35)). Thus, a taxpayer can take advantage of any 

amendment that is in effect for (not just in) a taxable year. Because

there is no other reasonable interpretation — notwithstanding the 

parties’ disagreement — we perceive no ambiguity. See Goodyear 

Tire & Rubber Co. v. Holmes, 193 P.3d 821, 825 (Colo. 2008) 

(concluding that the plain meaning of the statute was clear despite 

the parties’ disagreement).
11

¶ 20 The Department contends that because the General Assembly 

used different phrases — “as amended” and “at any time or from 

time to time” — in describing the two types of federal statutory 

provisions included in the definition of internal revenue code, the 

use of “as amended” must signal a narrower scope than “at any 

time or from time to time.” Thus, the Department argues, the

“[IRC], as amended,” means the federal statute as it exists to the 

end of the relevant tax year, but not beyond. 

¶ 21 But the Department misses a simpler explanation for the use 

of different phrases. Because the IRC is already in existence it can 

be “amended,” whereas “other provisions of the laws of the United 

States relating to federal income taxes, as the same may become 

effective” are not necessarily in existence yet. Such provisions are 

not “amended” but, rather, “become effective” upon enactment, 

which may occur “at any time or from time to time.” Thus, the 

plain language of the statute contradicts the Department’s 

interpretation.

¶ 22 Nor are we persuaded by the Department’s reliance on the 

statutory presumption of prospective application. To the extent the 

Department is suggesting the amendment to the federal statute 
12

should be presumptively prospective, that suggestion directly

conflicts with Congress’s language making the CARES Act 

provisions applicable to prior tax years. To the extent the 

Department’s argument is directed at an amendment to the state

statute, it is misplaced because the CARES Act did not (and could 

not) amend Colorado law. Rather, the effect of the congressional 

amendment flows from the existing state income tax code language 

(and its incorporation by reference to the IRC “as amended”).9

2. Legislative Declaration

¶ 23 We also disagree with the Department’s contention that the

Anschutzes’ interpretation of section 39-22-103(5.3) is contrary to 

the legislative declaration in the state income tax code. 

¶ 24 The legislative declaration states that one purpose of the act 

includes “[s]implifying the preparation of state income tax returns.” 

§ 39-22-102(1)(a), C.R.S. 2022.

¶ 25 The Department contends that because the Anschutzes had to 

file an amended state income tax return, the act did not simplify the 

9 Notably, the Colorado Constitution expressly permits state income 

taxes to be calculated “by reference to provisions of the laws of the 

United States . . . , whether retrospective or prospective in their 

operation.” Colo. Const. art. X, § 19 (emphasis added). 
13

preparation of the return. But an interpretation of the statute that 

requires taxpayers to take their federal taxable income, as 

calculated under federal law, and then determine which, if any,

amendments to the IRC must be incorporated for purposes of 

determining their state taxable income, depending on the date of 

their enactment, creates complexity contrary to the legislative 

declaration. Cf. Ball Corp. v. Fisher, 51 P.3d 1053, 1058 (Colo. App. 

2001) (“When Colorado’s tax provisions have counterparts at the 

federal level, incorporating amendments to the federal tax code 

simplifies compliance and enforcement under the Colorado tax 

code.”). 

¶ 26 By automatically incorporating amendments to the IRC into 

the state income tax code, a taxpayer’s preparation of state income 

tax returns is simplified. And if a taxpayer needs to file an 

amended federal income tax return, it does not complicate the 

preparation of any amended state income tax return, but rather 

simplifies it by allowing both amended returns to be filed at the 

same time and based on the same amendments to the 

determination of taxable income.
14

3. The Emergency Rule

¶ 27 Nor does the Emergency Rule provide the Department safe 

harbor. The Emergency Rule specified that changes to federal tax 

law only apply prospectively. Dep’t of Revenue Rule 39-22-103(5.3), 

1 Code Colo. Regs. 201-2. But the language that the Department 

used in its Emergency Rule did not appear in the plain language of 

the state income tax code as it existed before the amendment that 

became effective in July 2020. See Ch. 277, sec. 2, 

§ 39-22-104(3)(l)-(n), 2020 Colo. Sess. Laws 1358-59. Indeed, had 

the statute provided for prospective application only, the 

Department would not have had to issue the Emergency Rule. The 

Department stated in the Rule that “[t]he purpose of [the 

Emergency Rule] is to clarify that the term ‘internal revenue code’ 

incorporates changes to federal statute only on a prospective basis.”

Dep’t of Revenue Rule 39-22-103(5.3), 1 Code Colo. Regs. 201-2. 

But this was more than a clarification — it read words into the 

statute that were not there.

¶ 28 Because the Emergency Rule’s interpretation of “internal 

revenue code” is contrary to the statute’s plain language, and we 

decline to defer to it. See Ansel v. Dep’t of Hum. Servs., 2020 COA 
15

172M, ¶ 39 (concluding that agency interpretation of the statute 

was inconsistent with the plain language and was contrary to law).

4. Legislative Amendment to Section 39-22-104

¶ 29 The Department argues (and the district court agreed) that the 

fact that the General Assembly later amended section 39-22-104

supports its interpretation. We disagree. 

¶ 30 First, as noted, the 2020 and 2021 amendments expressly 

apply only to later tax years. Thus, they do not impact the 

Anschutzes’ amended 2018 tax return. 

¶ 31 Nevertheless, the Department asserts that the fiscal note to 

the 2020 bill indicated that the statutory language was simply a

recognition of existing law as set forth in the Emergency Rule. 

Fiscal notes can, in some circumstances, be helpful in gleaning 

legislative intent “to the extent they provide a glimpse into what was 

known at the time the amendment was being considered.” Bd. of 

Cnty. Comm’rs v. Colo. Dep’t of Pub. Health & Env’t, 2020 COA 50, 

¶ 28 n.7, aff’d in part and vacated in part on other grounds, 2021 

CO 43. First, having concluded that the statutory language is 

unambiguous, we do not resort to external aids to determine the 

meaning of the statute. People v. J.J.H., 17 P.3d 159, 162 (Colo. 
16

2001). In any event, the probative value of this particular fiscal 

note statement is suspect, particularly in light of the fact that the 

General Assembly’s own Office of Legislative Legal Services has 

opined in a memorandum that the Emergency Rule conflicted with 

the operative statutory language. 

¶ 32 Even assuming that the fiscal note and the legislative 

amendment to section 39-22-104 endorsed the Department’s 

Emergency Rule, as we have noted, the Emergency Rule was 

contrary to the plain language of the statute then in effect. The 

General Assembly can, of course, amend the state income tax code

to not conform with changes to the IRC, as it did by amending 

section 39-22-104 both in 2020 and 2021. But until such 

amendments become effective, Colorado law automatically 

incorporates amendments to the IRC.

5. Application

¶ 33 The Anschutzes filed an amended state income tax return for 

the 2018 tax year, relying on the CARES Act provisions that 
17

amended the IRC.10 Those provisions allowed taxpayers to reduce 

their taxable income by the amount of excess business loss they 

experienced. By its terms, the CARES Act provisions applied to the 

2018 tax year and nothing in the state income tax code limited that 

modification. 

¶ 34 Accordingly, the district court erred by granting the 

Department’s motion to dismiss.

IV. Disposition

¶ 35 We reverse the district court’s judgment and remand the case 

for further proceedings.

JUDGE FOX and JUDGE YUN concur.

10 The Department has never contended that the Anschutzes’ 

amended return was untimely. Thus, we assume that it was timely 

filed.