2023 Colorado Revised Statutes › Title 39 - TAXATION (§§ 39-1-101 — 39-37-301) › SPECIFIC TAXES (§§ 39-20-101 — 39-37-301) › INCOME TAX (§§ 39-22-101 — 39-22-5508) › Article 22 - Income Tax (§§ 39-22-101 — 39-22-5508) › Part 5 - SPECIAL RULES (§§ 39-22-501 — 39-22-570) › Section 39-22-526 - [Effective 8/7/2024] Credit for environmental remediation of contaminated land - legislative declaration - definition - repeal

(1)
(a)
For income tax years commencing on or after January 1, 2014, but prior to January 1, 2030, there is allowed a credit against the income taxes imposed by this article 22 for any approved environmental remediation of contaminated property to any taxpayer who meets the following requirements:
(I)
The property where the environmental remediation takes place must be located within the state; and
(II)
The taxpayer seeking the credit must possess a certificate issued by CDPHE pursuant to section
25-16-306 (5)(b)
and subsection (3) of this section.
(b)
(I)
The tax credit allowed in this section must not exceed forty percent of the first seven hundred fifty thousand dollars expended for the approved remediation, and must not exceed thirty percent of the next seven hundred fifty thousand dollars expended for the approved remediation. For income tax years commencing on or after January 1, 2022, with respect to approved remediation of a site located in a rural community, the amount of the tax credit shall not exceed fifty percent of the first seven hundred fifty thousand dollars expended for the approved remediation, and must not exceed forty percent of the next seven hundred fifty thousand dollars expended for the approved remediation. A tax credit is not allowed for expenditures exceeding one million five hundred thousand dollars on any individual project.
(II)
As used in this subsection (1)(b) and subsection (2)(b) of this section, "rural community" means:
(A)
A municipality with a population of less than fifty thousand people that is not located within the Denver metropolitan area; or
(B)
The unincorporated area of any county that is not located in the Denver metropolitan area and that has a total population of less than fifty thousand people.
(III)
As used in this subsection (1)(b) and subsection (2)(b) of this section, "Denver metropolitan area" means Adams, Arapahoe, Boulder, and Jefferson counties, the city and county of Broomfield, the city and county of Denver, and all of Douglas county other than the town of Castle Rock and the town of Larkspur.
(c)
If the credit allowed by this section exceeds the tax otherwise due, the excess credit may be carried forward and claimed on the earliest possible subsequent tax return for a period not to exceed five years.
(d)
A taxpayer may transfer all or a portion of a tax credit granted pursuant to this subsection (1) to another taxpayer for such other taxpayer, as transferee, to apply as a credit against the taxes imposed by this article 22 subject to the following limitations:
(I)
The taxpayer may only transfer a portion of the tax credit that the taxpayer has neither applied against the income taxes imposed by this article nor used to obtain a refund.
(II)
The taxpayer may transfer a prorated portion of the tax credit to more than one transferee.
(III)
Any transferee of a tax credit issued under this section may use the amount of the tax credits transferred to offset against any other tax due under this article 22. The transferor and the transferee of the tax credits shall jointly file a copy of the written transfer agreement with the Colorado department of public health and environment, referred to in this section as "CDPHE", within thirty days after the transfer. Any filing of the written transfer agreement with CDPHE perfects the transfer, and CDPHE shall develop a system to track the transfers of tax credits and to certify the ownership of tax credits. A certification by CDPHE of the ownership and the amount of tax credits may be relied on by the department of revenue and the transferee as being accurate, and neither CDPHE nor the department of revenue shall adjust the amount of tax credits as to the transferee; except that CDPHE and the department of revenue retain any remedies they may have against the owner.
(IV)
A transferor may transfer a credit pursuant to this paragraph (d) regardless of whether the transferor receives value in exchange for the transfer. The transferee may use the credit to pay, in whole or in part, the income tax obligation imposed on the transferee under this article. The transferee's use of a tax credit from a transferor under this section to pay taxes owed is not deemed a reduction in the amount of income taxes imposed by this article on the transferee.
(V)
Repealed.
(VI)
The transfer of a tax credit must occur prior to the due date imposed by this article, not including any extensions, for filing the transferee's income tax return.
(VII)
A tax credit held by an individual either directly or as a result of distribution by a pass-through entity, but not a tax credit held by a transferee unless used by the transferee's estate for taxes owed by the estate, survives the death of the individual and may be claimed or transferred by the decedent's estate.
(VIII)
The transferor of a tax credit transferred pursuant to this subsection (1)(d) is the tax matters representative in all matters with respect to the credit. The transferee is subject to the same statute of limitations with respect to the credit as the transferor of the credit.
(IX) and (X)
Repealed.
(2)
(a)
For income tax years commencing on or after January 1, 2014, but prior to January 1, 2030, there is allowed to any qualified entity a transferable expense amount for expenses incurred by the qualified entity in performing approved environmental remediation. The transferable expense amount may only be transferred to a taxpayer to be claimed by the taxpayer as a credit pursuant to the provisions of this subsection (2). The transferrable expense amount is allowed to any qualified entity that meets the following requirements:
(I)
The property where the environmental remediation takes place must be located within the state; and
(II)
CDPHE must have issued a certificate for the property pursuant to section
25-16-306 (5)(b)
and subsection (3) of this section.
(b)
The transferable expense amount allowed in this section must not exceed forty percent of the first seven hundred fifty thousand dollars expended by the qualified entity for the approved remediation, and must not exceed thirty percent of the next seven hundred fifty thousand dollars expended by the qualified entity for the approved remediation; except that, for income tax years commencing on or after January 1, 2022, but before January 1, 2030, with respect to approved remediation of a site located in a rural community, the amount of the transferable expense shall not exceed fifty percent of the first seven hundred fifty thousand dollars expended for the approved remediation, and must not exceed forty percent of the next seven hundred fifty thousand dollars expended for the approved remediation. A transferable expense amount is not allowed for expenditures exceeding one million five hundred thousand dollars on any individual project.
(c)
A qualified entity may transfer all or a portion of a transferable expense amount allowed pursuant to this subsection (2) to a taxpayer for such taxpayer, as transferee, to apply as a credit against the taxes imposed by this article 22 subject to the following limitations:
(I)
The qualified entity may transfer a prorated portion of the transferable expense amount to more than one transferee.
(II)
Any transferee of a transferable expense amount issued under this section may use the amount of the transferable expense amount transferred to offset against any other tax due under this article 22. The transferor and the transferee of the transferable expense amount shall jointly file a copy of the written transfer agreement with CDPHE within thirty days after the transfer. Any filing of the written transfer agreement with CDPHE perfects the transfer, and CDPHE shall develop a system to track the transfers of transferable expense amounts and to certify the ownership of transferable expense amounts. A certification by CDPHE of the ownership and the amount of transferable expense may be relied on by the department of revenue and the transferee as being accurate, and neither CDPHE nor the department of revenue shall adjust the amount of transferable expense as to the transferee; except that CDPHE and the department of revenue retain any remedies they may have against the owner.
(III)
A qualified entity may transfer a transferable expense amount to be claimed as a credit by a transferee pursuant to this subsection (2) regardless of whether the qualified entity receives value in exchange for the transfer. The transferee may use the credit to pay, in whole or in part, the income tax obligation imposed on the transferee under this article. The transferee's use of a tax credit from a qualified entity under this section to pay taxes owed is not deemed a reduction in the amount of income taxes imposed by this article on the transferee.
(IV)
Repealed.
(V)
The transfer of a transferable expense amount to a transferee must occur prior to the due date imposed by this article, not including any extensions, for filing the transferee's income tax return.
(VI)
A transferable expense amount held by a transferee's estate for taxes owed by the estate, survives the death of the transferee and may be claimed or transferred by the decedent's estate.
(VII)
The qualified entity that transfers a transferable expense amount to be claimed as a credit by a transferee pursuant to this subsection (2) is the tax matters representative in all matters with respect to the credit.
(VIII)
Repealed.
(d)
As used in this subsection (2), "qualified entity" means a county, home rule county, city, town, home rule city, home rule city and county, school district, charter school, special district, district authorized by article
20
of title
30
, article
25
of title
31
, and articles
41
to
50
of title
37
, state institution of higher education, quasi-governmental entity, or municipal, quasi-municipal, or public corporation organized pursuant to law, or a private nonprofit entity that is exempt from the income taxes imposed by this article 22.
(3)
In addition to any other requirements of this section, a taxpayer shall submit a claim for a credit and a qualified entity shall submit a claim for a transferrable expense amount to CDPHE. The department shall issue certificates for the claims received in the order submitted. After certificates have been issued for credits and transferrable expense amounts in the aggregate amount of three million dollars for all taxpayers and qualified entities combined for the 2014 to 2021 calendar years and five million dollars for the 2022 to 2029 calendar years, any claims that exceed the amount allowed for the calendar year shall be placed on a wait list in the order submitted and a certificate shall be issued for use of the credit or transferrable expense amount in the next year for which the department has not issued credit certificates in excess of three or five million dollars respectively. The department shall not issue certificates for any calendar year, including certificates placed on a wait list for that year, in an aggregate amount that exceeds three or five million dollars respectively. Two million dollars of the five million dollar cap is reserved only for projects in a rural community. The remaining three million dollars each year may be used by rural or nonrural communities. No claim for a credit or a transferrable expense amount is allowed for any income tax year commencing on or after January 1, 2014, unless a certificate has been issued by the department pursuant to this subsection (3).
(3.5)
In accordance with section
39-21-304 (1)
, which requires each bill that creates a new tax expenditure or extends an expiring tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that:
(a)
The general legislative purposes of the income tax credit allowed by this section are:
(I)
To induce certain designated behavior by taxpayers; and
(II)
To provide tax relief for certain businesses or individuals;
(b)
The specific legislative purpose of the income tax credit allowed by this section is to encourage voluntary environmental remediation of contaminated sites by providing a financial incentive to move forward with costly remediation projects; and
(c)
In order to allow the general assembly and the state auditor to measure the effectiveness of achieving the purposes specified in subsections (3.5)(a) and (3.5)(b) of this section, CDPHE is required to provide data that indicates for each calender year how many projects qualified for the credit and the number of credit recipients.
(3.7)
For income tax years commencing on or after January 1, 2024, but prior to January 1, 2025, every taxpayer exempt from taxes pursuant to section 39-22-112 that claims the credit allowed in this section shall file a return pursuant to section 39-22-601 (7)(b).
(4)
This section is repealed, effective December 31, 2036.
Amended by 2024 Ch. 382,§ 1, eff. 8/7/2024.
Amended by 2024 Ch. 373,§ 35, eff. 8/7/2024.
Amended by 2022 Ch. 412, § 2, eff. 6/7/2022.
L. 2000: Entire section added, p. 891, § 2, effective 1/1/2001. L. 2005: IP(1) and (4) amended, p. 1471, § 1, effective June 7. L. 2014: Entire section R&RE, (SB 14-073), ch. 213, p. 793, § 1, effective August 6.
2024 Ch. 382, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2024 Ch. 373, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
This section is set out more than once due to postponed, multiple, or conflicting amendments.