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 39-22-546 - Credit against tax - residential energy storage systems - tax preference performance statement - legislative declaration - definition - repeal

(1)
(a)
In accordance with section
39-21-304(1)
, which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to:
(I)
Induce certain designated behavior by taxpayers, specifically the purchase and installation of residential energy storage systems; and
(II)
Contribute to the state's effort to achieve its climate goals.
(b)
The general assembly and the state auditor shall measure the effectiveness of the tax credits in achieving the purposes specified in subsection (1)(a) of this section based on the number of residential energy storage systems installed in the state. The Colorado energy office shall provide the state auditor with any available information that would assist the state auditor's measurement.
(2)
As used in this section, unless the context otherwise requires:
(a)
"Energy storage system" means any commercially available, customer-sited system, including batteries and the batteries paired with on-site generation, that is capable of retaining, storing, and delivering energy by chemical, thermal, mechanical, or other means.
(b)
"Purchase price" means the amount actually paid by the purchaser for the tangible personal property installed, including charges for sales tax and freight, but not including any charges for assembly, installation, or other construction services, or permit fees.
(c)
"Purchaser" means a taxpayer who is the buyer of an energy storage system.
(d)
"Seller" means the entity that sells an energy storage system.
(3)
(a)
For income tax years commencing on or after January 1, 2023, but before January 1, 2025, any purchaser that installs an energy storage system in a residential dwelling in this state is allowed a credit against the tax imposed by this article 22 in an amount equal to ten percent of the purchase price paid by the purchaser for the energy storage system.
(b)
The credit allowed pursuant to this section is for the income tax year in which the energy storage system is purchased.
(4)
(a)
A purchaser may assign the tax credit allowed in this section to the purchaser's seller as follows:
(I)
The assignment to the seller must be completed at the time of purchase of a new energy storage system by entering into an agreement as set forth in subsection (4)(c) of this section;
(II)
The purchaser must assign the tax credit to the seller and forfeit the right to claim the tax credit on the purchaser's tax return in exchange for good and valuable consideration; and
(III)
The seller must compensate the purchaser for the full nominal value of the tax credit. The compensation paid to the purchaser is considered a refund of state taxes and is not state taxable income.
(b)
Notwithstanding section
39-21-108(3)
, if a purchaser assigns the tax credit to a seller pursuant to this subsection (4), the seller receives the full amount of the tax credit that the purchaser is allowed in this section. Any unpaid balance or unpaid debt of the purchaser may not be credited from the amount of the tax credit allowed in this section.
(c)
To complete the tax credit assignment, the purchaser and the seller must enter into an agreement that affirms that the requirements specified in subsection (4)(a) of this section were met.
(d)
The seller may authorize an agent or a designee to sign the agreement on its behalf.
(e)
The seller shall electronically submit a report containing the information required in the agreement described in subsection (4)(c) of this section to the department of revenue within thirty days of the purchase of an energy storage system in a form and manner to be determined by the department.
(f)
The seller shall also file the agreement described in subsection (4)(c) of this section with the original tax return for the taxable year in which the energy storage system is purchased.
(g)
The department of revenue, in consultation with the Colorado energy office, shall develop a model report and agreement no later than December 1, 2022.
(5)
If a credit authorized in this section exceeds the income tax due on the income of the seller for the taxable year, the excess credit may not be carried forward and shall be refundable to the seller.
(6)
Making a purchaser aware of the income tax credit allowed in this section or helping a purchaser assign the income tax credit to a seller as allowed in this section does not rise to the level of providing the purchaser with unauthorized tax advice.
(7)
This section is repealed, effective January 1, 2028.
Added by 2022 Ch. 333,§2, eff. 8/10/2022.
2022 Ch. 333, was passed without a safety clause. See Colo. Const. art. V, § 1(3).