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39-22-101 — 39-22-5508) › Part 5 - SPECIAL RULES (§§ 39-22-501 — 39-22-570) › Section 39-22-548 - [Effective 8/7/2024] [Repealed Effective 12/31/2040] Colorado homeless contribution tax credit - legislative declaration - definitions - repeal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 finds and declares that the general legislative purpose of this tax expenditure is to induce certain designated behavior by taxpayers. Specifically, this tax expenditure is intended to encourage taxpayers to make contributions to approved nonprofit organizations providing certain qualifying activities to leverage financial contributions from Colorado residents and businesses to support providing appropriate housing and services to assist individuals and families experiencing homelessness. The tax expenditure will catalyze and strengthen statewide efforts to address the effects of homelessness through private investment and civic engagement in Colorado-based service providers for individuals and families experiencing homelessness.
(b)
The annual review presented by the division as set forth in subsection (6) of this section will allow the general assembly and the state auditor to measure the effectiveness of the tax expenditure.
(2)
As used in this section, unless the context otherwise requires:
(a)
"Approved nonprofit organization" means a nonprofit organization that provides a qualifying activity and that has been reviewed and approved by the division as specified in subsection (5) of this section and has a history or track record of success in delivering services and demonstrated financial viability.
(b)
"Approved project" means a project administered by an approved nonprofit organization that has been evaluated, reviewed, and approved by the division as specified in subsection (5) of this section, and that implements one or more qualifying activities.
(c)
"Capital campaign" means a campaign that encourages public and private partnerships and is focused on raising funds for a specific capital project. The capital project must involve construction and implementation that commences within three years of the project being approved by the division. A "capital campaign" must include a campaign for one or more of the following:
(I)
Supportive housing for individuals or families experiencing homelessness;
(II)
Community overnight shelters, community day shelters, or emergency shelters;
(III)
Facilities, including the acquisition or rehabilitation of facilities, used to provide housing or services to individuals or families experiencing homelessness, including facilities that are necessary to perform qualifying services; or
(IV)
Facilities needed to provide administrative support for approved projects.
(d)
"Division of housing" or "division" means the division of housing in the department of local affairs created in section
24-32-704
.
(e)
"In-kind contribution" means a contribution that is not a monetary contribution and is valued over five thousand dollars pursuant to an independent third-party valuation, including a contribution of property, services, stocks, bonds, or other intangible property.
(f)
"Monetary contribution" means a contribution in United States currency in any form, including cash, payment made by check, electronic funds transfer, debit card, or credit card.
(g)
"Nonprofit organization" means any organization in good standing with the secretary of state that is exempt from taxation pursuant to section 501 (a) of the federal "Internal Revenue Code of 1986",
26 U.S.C. sec. 501 (a)
, as amended, and listed as an exempt organization in section 501 (c)(3) of the federal "Internal Revenue Code of 1986",
26 U.S.C. sec. 501 (c)(3)
, as amended.
(h)
"Operational service" means a service with the primary focus on assisting individuals or families experiencing homelessness or, in the case of prevention, individuals or families facing imminent risk of homelessness. An operational service must also be a service that supports or provides:
(I)
Outreach efforts to engage or provide services to unsheltered individuals or families experiencing homelessness;
(II)
Safe emergency, temporary, or transitional shelters, such as day shelters, that may include supportive services to individuals or families experiencing homelessness;
(III)
Prevention services that target individuals or families facing imminent risk of homelessness as defined by the department of local affairs;
(IV)
Supportive housing for individuals or families experiencing homelessness or who would otherwise be homeless;
(V)
Services designed to assist individuals or families experiencing homelessness to obtain an employment outcome, including job placement services and services that help individuals become workforce ready;
(VI)
Case management, including establishing client goals for individuals or families experiencing homelessness and coordination of referrals to address health or mental health benefit procurement and procurement of other essential services for individuals or families experiencing homelessness;
(VII)
Shelters and services for survivors of domestic violence who are fleeing an abusive household; or
(VIII)
The implementation and operation of successor projects or other services for individuals or families experiencing homelessness that are identified by the division as emerging, promising, and providing best practices.
(i)
"Qualifying activity" means a capital campaign or an operational service.
(j)
"Taxpayer" means a resident individual or a domestic or foreign corporation subject to part 3 of this article 22, a partnership, S corporation, or other similar pass-through entity, estate, or trust that makes a contribution as an entity, and a partner, member, and subchapter S shareholder of such a pass-through entity.
(3)
(a)
For income tax years commencing on or after January 1, 2023, but before January 1, 2027, except as provided in subsection (3)(b) of this section, any taxpayer who makes a monetary or in-kind contribution to an approved nonprofit organization, or to an approved project administered by an approved nonprofit organization, is allowed a credit equal to twenty-five percent of the total value of the contribution, subject to the limitations specified in subsection (3)(d) of this section.
(b)
If a taxpayer makes a monetary or in-kind contribution to an approved nonprofit organization, or to an approved project administered by an approved nonprofit organization, in an underserved, rural county, as defined by the division in its guidelines for the program, then the taxpayer is allowed a credit equal to thirty percent of the total value of the contribution, subject to the limitations in subsection (3)(d) of this section.
(c)
The approved nonprofit organization that receives the allowable contribution shall issue a tax credit certificate to each taxpayer that makes an allowable contribution pursuant to subsections (3)(a) or (3)(b) of this section; except that the approved nonprofit organization shall not issue tax credit certificates that total more than seven hundred fifty thousand dollars per income tax year, and if the approved nonprofit organization administers one or more approved projects, in addition to providing a qualifying service, then the approved nonprofit organization shall not issue tax credit certificates for allowable contributions to one or more approved projects that total more than an additional seven hundred fifty thousand dollars per income tax year. The tax credit certificate must state a unique certificate identification number, the amount of the allowable contribution, the taxpayer's name, the last four digits of the taxpayer's social security number or the taxpayer's full federal employer identification number, the type of the contribution, the date the taxpayer made the contribution, the amount of the tax credit that is authorized for that taxpayer, and any other information that the executive director of the department of revenue may require. Tax credit certificates shall be issued in the order of received allowable contributions.
(d)
(I)
(A)
The credit allowed in subsections (3)(a) and (3)(b) of this section shall not exceed one hundred thousand dollars per taxpayer per tax year.
(B)
For a contribution made pursuant to subsections (3)(a) or (3)(b) of this section that is made in a cash payment, the contribution must be equal to or greater than one hundred dollars.
(C)
In the case of a partnership, S corporation, or other similar pass-through entity, the limitations in this subsection (3)(d) apply at the entity level.
(II)
In no event is a credit allowed pursuant to this section for contributions that directly benefit the taxpayer. If a taxpayer receives a benefit for the contribution, the value of the contribution is reduced by the value of the benefit received by the taxpayer to arrive at the contribution that may be certified for the income tax credit allowed in this section.
(III)
If the amount of the allowed credit exceeds the amount of income taxes otherwise due on the income of the taxpayer in the income tax year for which the credit is being claimed, the amount of the credit not used as an offset against income taxes in that income tax year may be carried forward as a credit against subsequent years' income tax liability for a period not exceeding five years and must be applied first to the earliest income tax years possible. Any credit remaining after the period may not be refunded or credited to the taxpayer.
(4)
On or before November 1, 2022, and on or before November 1 of each year thereafter, the division shall develop and post on the division's website a list, including a description, of all approved nonprofit organizations and any approved projects administered by an approved nonprofit organization to which taxpayers may contribute during the next calendar year for the purpose of receiving a tax credit pursuant to this section. Any modifications to the list, including nonprofit organizations or proposed projects of an approved nonprofit organization that are later approved, must be posted on the division's website no later than sixty days after the modification is made. The division shall review a proposed nonprofit organization and any proposed project of an approved nonprofit organization for eligibility and approval as described in subsection (5) of this section.
(5)
(a)
(I)
A nonprofit organization shall apply to the division for approval to receive allowable contributions under this section, including approval of a proposed project. The application must:
(A)
Set forth the qualifying activity that the nonprofit organization provides, and, in addition, for a proposed project, the qualifying activity that the project will implement;
(B)
Provide a letter of approval from the nonprofit organization's board of directors;
(C)
Provide evidence that the nonprofit organization is in good standing with the secretary of state; and
(D)
Submit a recent audit or financial report to the division in a form that is acceptable to the division.
(II)
An organization that has a program as set forth in section
39-30-103.5 (3)(a)
that has been approved by the Colorado economic development commission under section
39-30-103.5
is deemed approved for purposes of compliance with this section to receive eligible contributions unless otherwise specifically disapproved by the division so long as the organization:
(A)
Is a nonprofit;
(B)
Provides or has the intent to provide a qualifying activity;
(C)
Can provide a letter of approval from its board of directors;
(D)
Submits a recent audit or financial report to the division in a form that is acceptable to the division; and
(E)
No later than four years from August 10, 2022, submits an application for reapproval pursuant to subsection (5)(g) of this section.
(III)
When reviewing applications and organizations for approval pursuant to subsections (5)(a)(I) and (5)(a)(II) of this section, with respect to a nonprofit organization's proposed qualifying activity or activities, the division shall consider the financial management capacity and operational capacity of the nonprofit organization and evaluate the capability of the nonprofit organization to enter a monitoring agreement for the purpose of the division evaluating the efficacy of the nonprofit organization and its qualifying activity or activities.
(b)
The division shall review applications received pursuant to subsection (5)(a) of this section in a timely manner and in a time frame set forth in the division's guidelines for the program. The division shall issue a notice of approval or disapproval of a nonprofit organization, a proposed project, or both in writing.
(c)
The division is authorized to hold hearings in order to review a nonprofit organization's request to reconsider a decision regarding disapproval within thirty days after the date of the disapproval notice.
(d)
Once approved, the nonprofit organization shall maintain an accounting system and appropriate records to track contributions received by taxpayers for which a tax credit was allowed under this section and to accurately associate the use of the contributions with qualifying activities, an approved project, or both.
(e)
The division shall specify in program guidelines what information regarding qualifying activities must be reported by the nonprofit organization and can request from the nonprofit organization an audit or financial report in a form that is acceptable to the division.
(f)
(I)
No later than June 30, 2025, the division shall complete a review of every organization and project deemed approved under subsection (5)(a)(II) of this section, and no later than June 30, 2026, and June 30 of each year thereafter, the division shall complete a review of every other approved nonprofit organization and approved project to evaluate performance and compliance with the requirements of this section. The division must review the qualifying activities being provided and determine how the activities are addressing current and emerging needs of individuals and families experiencing homelessness in each approved nonprofit organization's community, or, if applicable, each approved project's community.
(II)
The division has the authority to monitor and audit approved nonprofit organizations and their performance and may disapprove an approved nonprofit organization or an approved project of an approved nonprofit organization if the approved nonprofit organization is not meeting expectations or if the approved nonprofit organization is otherwise not in compliance with objectives outlined in this section or program guidelines, or, if applicable, in the project proposal. The division shall immediately notify the department of revenue if an approved nonprofit organization or an approved project of an approved nonprofit organization is disapproved as a result of a review or audit in order to ensure that contributions made by taxpayers on or after the date of disapproval are no longer eligible for the tax credit allowed in this section.
(g)
An approved nonprofit organization shall apply for reapproval with the division every four years in the same manner provided for approval in subsection (5)(a)(I) of this section. When applying for reapproval, the nonprofit organization may add or remove qualifying activities in the reapproval application. It is expected that a nonprofit organization will revise any previously approved goals, objectives, and expected outcomes of its qualifying activities to adjust to changes in community needs, emerging best practices, and feedback from the division.
(6)
The division shall present an annual review of approved nonprofit organizations and any approved projects administered by an approved nonprofit organization to the state housing board created in section
24-32-706
. The annual review must include individual and collective outputs and outcomes of each approved nonprofit organization described in this section and must summarize contributions received and tax credit certificates issued for the reporting period, including an estimate of expected contributions for the upcoming calendar year.
(7)
The division shall develop program guidelines, with stakeholder involvement, for the administration of this section.
(8)
(a)
On or before September 30 of each calendar year, the state director of housing or the director's designee shall transmit to the department of revenue the data regarding income tax credits allowed pursuant to this section that are certified or approved by the division from January 1 through June 30 of the same calendar year.
(b)
On or before March 31 of each calendar year, the state director of housing or the director's designee shall transmit to the department of revenue the data regarding income tax credits allowed pursuant to this section that are certified or approved by the division from July 1 through December 31 of the previous calendar year.
(9)
This section is repealed, effective December 31, 2040.
Amended by 2024 Ch. 476,§ 1, eff. 8/7/2024.
Added by 2022 Ch. 286, § 1, eff. 8/10/2022.
2024 Ch. 476, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2022 Ch. 286, 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.