2016 Colorado Revised Statutes
Title 39 - Taxation
Article 22 - Income Tax
Part 5 - Special Rules
§ 39-22-507.5. Credits against tax - investment in certain property
(1) Except as otherwise provided in this section, there shall be allowed to any person as a credit against the tax imposed by this article, for income tax years commencing on or after January 1, 1979, an amount equal to the total of:
(a) Investment tax credit carryovers claimed by such person for such taxable year;
(b) Ten percent of that part of the credit allowed for the same income tax year by section 38 of the internal revenue code, as determined under the provisions of section 46 of the internal revenue code, without regard to the limitations imposed by said section 38, to the extent such part of such credit is determined by reference to property which is used in Colorado; and
(c) Investment tax credit carrybacks claimed by such person for such taxable year.
(1.5) For taxable years beginning on or after January 1, 1987, the provisions of paragraph (b) of subsection (1) of this section shall apply only with respect to taxes imposed by part 3 of this article.
(2) The executive director shall promulgate regulations which will prescribe the extent to which property must be used in Colorado to qualify for the credit allowed under the provisions of subsection (1) of this section, which regulations shall include a method or methods of determining what portion of the property shall qualify in the case of property which is used both within and without Colorado.
(3) The credit allowed by this section for any income tax year shall not exceed:
(a) The taxpayer's actual tax liability for the income tax year to the extent such liability does not exceed five thousand dollars; plus
(b) Twenty-five percent of that portion of said tax liability for the income tax year which exceeds five thousand dollars.
(5) In the case of a "controlled group of corporations", as defined in section 1563 (a) of the internal revenue code, the five thousand dollars specified in subsection (3) of this section shall be apportioned among the members of the controlled group as they may elect. The election shall apply to the income tax year of the members of the controlled group ending with or including a common December 31. Should such members fail to agree on an allocation of the five thousand dollars, said five thousand dollars shall be divided equally among all members of the controlled group.
(6) In the case of a regulated investment company or a real estate investment trust, the five thousand dollars referred to in subsection (3) of this section shall be reduced to an amount which shall be five thousand dollars multiplied by the taxable income for the income tax year and divided by the taxable income for the income tax year plus the amount of the deduction for dividends paid.
(7) If the amount of the credit allowed by paragraph (b) of subsection (1) of this section exceeds the amount of the limitation imposed by subsection (3) of this section reduced by the credit allowed by paragraph (a) of subsection (1) of this section for any income tax year, referred to in this subsection (7) as the "unused credit year", such excess shall be:
(a) An investment tax credit carryback to each of the three income tax years preceding the unused credit year; except that no credit shall be carried back to an income tax year commencing prior to January 1, 1979; and
(b) An investment tax credit carryover to each of the seven income tax years following the unused credit year.
(8) No carryover or carryback of unused investment credit will be allowed in the case of a taxable cooperative as defined in section 1381 (a) of the internal revenue code.
(9) (a) For any income tax year beginning on or after January 1, 1979, if any taxpayer is required to redetermine the credit allowed by section 38 of the internal revenue code due to the provisions of section 47 of the internal revenue code, such taxpayer must redetermine the credit allowed by subsection (1) of this section for the same income tax year. If the redetermination results in a reduction of the credit allowed by this section for the income tax year or for any income tax year to which the credit was carried back or carried forward, the reduction shall constitute an increase in the tax imposed by this article for the income tax year during which the disposition or reclassification of the nature of the property occurs, and the amount of any unused investment tax credit carryback or carryover must be redetermined as appropriate. The increase in tax shall not be included as tax liability for the purposes of subsection (3) of this section.
(b) If, during any income tax year which commences on or after May 26, 1983, "section 38 property" which was first placed in service by the taxpayer in a taxable year beginning on or after January 1, 1982, is disposed of by or otherwise ceases to be such property with respect to the taxpayer before the close of the property's recapture period, as determined for federal income tax purposes, the credit allowed by this section and the decrease, if any, in the investment tax credit carryback or carryover with respect to the property shall be redetermined in accordance with the recapture percentage table contained in:
(I) Section 47 (a) of the internal revenue code, as it existed immediately prior to the enactment of the federal "Revenue Reconciliation Act of 1990", for such property which was disposed of by or otherwise ceased to be such property with respect to the taxpayer prior to January 1, 1991; or
(II) Section 50 (a) of the internal revenue code for such property which is disposed of by or otherwise ceases to be such property with respect to the taxpayer on or after January 1, 1991.
(10) and (11) Repealed.
(12) In lieu of the amount of the investment tax credit allowed by subsection (1) of this section, a person who has invested in property used in an enterprise zone, as designated pursuant to section 39-30-103, shall be allowed a credit in the amount designated in section 39-30-104, subject to the terms and conditions of that section.
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