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 55 - COLORADO AFFORDABLE HOUSING IN TRANSIT-ORIENTED COMMUNITIES INCOME TAX CREDIT (§§ 39-22-5501 — 39-22-5508) › Section 39-22-5503 - Credit against tax - affordable housing located in a transit-oriented community

(1)
For income tax years during the credit period, there is allowed to any qualified taxpayer a credit with respect to the income taxes imposed by this article 22 in the amount determined by the authority pursuant to this part 55.
(2)
The aggregate amount of credits allocated by the authority in each of the 2025 through 2029 calendar years, must not exceed the aggregate amount of:
(a)
Credits authorized as follows:
(I)
For the 2025 calendar year, two million dollars;
(II)
For the 2026 calendar year, two million dollars;
(III)
For the 2027 calendar year, two million dollars;
(IV)
For the 2028 calendar year, eleven million dollars; and
(V)
For the 2029 calendar year, thirteen million dollars; plus
(b)
Unallocated credits, if any, for the immediately preceding calendar year; and
(c)
Any credit recaptured or otherwise returned to the authority in the calendar year.
(3)
The authority may allocate a credit to an owner of a qualified development by issuing to the owner an allocation certificate. The authority may determine the time at which such allocation certificate is issued. The credit must be in an amount determined by the authority, subject to the following guidelines:
(a)
The credit must be necessary for the financial feasibility of such development;
(b)
All allocations must be made pursuant to the allocation plan; and
(c)
The aggregate sum of credits allocated annually must not exceed the limits set forth in subsection (2) of this section.
(4)
(a)
On or after January 1, 2025, but prior to December 31, 2029, The authority may allocate a total amount of thirty million dollars in credits.
(b)
The taxpayer shall not claim the credit ratably over the credit period. Instead, the credit must be accelerated and the full amount must be claimed against the taxes imposed by this article 22 over the credit period according to the following schedule:
(I)
The amount of the credit that a taxpayer claims in the first year of the credit period must equal seventy percent of the total amount of the credit the authority allocates to the taxpayer;
(II)
The amount of the credit that a taxpayer claims in the second year of the credit period must equal eight percent of the total amount of the credit the authority allocates to the taxpayer;
(III)
The amount of the credit that a taxpayer claims in the third year of the credit period must equal eight percent of the total amount of the credit the authority allocates to the taxpayer;
(IV)
The amount of the credit that a taxpayer claims in the fourth year of the credit period must equal seven percent of the total amount of the credit the authority allocates to the taxpayer; and
(V)
The amount of the credit that a taxpayer claims in the fifth year of the credit period must equal seven percent of the total amount of the credit the authority allocates to the taxpayer.
(5)
If an owner of a qualified development receiving an allocation of a credit is a partnership, limited liability company, S corporation, or similar pass-through entity, the owner may allocate the credit among its partners, shareholders, members, or other qualified taxpayers in any manner agreed to by such persons regardless of whether any such persons are deemed a partner for federal income tax purposes. The owner shall certify to the department the amount of credit allocated to each partner, shareholder, member, or other qualified taxpayer. Each partner, shareholder, member, or other qualified taxpayer admitted as a partner, shareholder, member, or other qualified taxpayer of the owner prior to the filing of a tax return claiming the credit is allowed to claim such amount subject to any restrictions set forth in this part 55.
(6)
No credit shall be allocated pursuant to this part 55 unless the qualified development is the subject of a recorded restrictive covenant requiring the development to be maintained and operated as a qualified development, and is in accordance with the accessibility and adaptability requirements of the federal tax credits and Title VIII of the "Civil Rights Act of 1968", as amended by the "Fair Housing Amendments Act of 1988", for a period of fifteen income tax years, or such longer period as may be agreed to between the authority and the owner, beginning with the first taxable year of the credit period unless corrected within the time that is applicable to developments receiving federal tax credits pursuant to section 42(h)(6)(J) of the internal revenue code as applicable to the covenant described in this subsection (6).
(7)
The allocated credit amount may be taken against the taxes imposed by this article 22 for each income tax year of the credit period as set forth in subsection (4) of this section. Any amount of credit that exceeds the tax due for an income tax year may be carried forward as a tax credit against the income tax liability for the three subsequent tax years and must be applied first to the earliest years possible. Any amount of the credit that is not used must not be refunded to the taxpayer.
(8)
Unless otherwise provided in this part 55 or the context clearly requires otherwise, the authority shall determine eligibility for a credit and allocate credits in accordance with the standards and requirements set forth in the allocation plan; however, the authority shall administer the credit allowed pursuant to this part 55 consistently with the credit pursuant to part 21 of this article 22 except to the extent the allocation plan is inconsistent with part 21 of this article 22, in which case the allocation plan controls. Notwithstanding the foregoing, any combination of federal and state credits, or standalone amount of state credits, allowed must be the least amount necessary to ensure the financial feasibility of a qualified development.
Added by 2024 Ch. 291,§ 2, eff. 5/30/2024.