2016 Colorado Revised Statutes
Title 39 - Taxation
Specific Taxes
Article 22 - Income Tax
Part 5 - Special Rules
§ 39-22-526. Credit for environmental remediation of contaminated land - definition - repeal

(1) (a) For income tax years commencing on or after January 1, 2014, but prior to January 1, 2023, there is allowed a credit against the income taxes imposed by this article 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 the department of public health and environment pursuant to section 25-16-306 (5) (b), C.R.S., and subsection (3) of this section.

(b) 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. A tax credit is not allowed for expenditures exceeding one million five hundred thousand dollars on any individual project.

(c) A credit must be first applied to taxes due or transferred to another taxpayer pursuant to paragraph (d) of this subsection (1) no later than the tax year following the tax year in which the certification is provided to the department pursuant to section 25-16-306 (5) (a), C.R.S. 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 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) For any tax year in which a tax credit is transferred pursuant to this paragraph (d), both the taxpayer and the transferee shall file written statements with their income tax returns specifying the amount of the tax credit transferred. A transferee may only claim a credit transferred pursuant to this paragraph (d) if the taxpayer's written statement verifies the amount of the tax credit claimed by the transferee.

(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) The transferee shall submit to the department of revenue a form approved by the department establishing that the taxpayer has satisfied the requirements of this section. The transferee shall also file a copy of the form with the department of public health and environment.

(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 a donation 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 paragraph (d) is the tax matters representative in all matters with respect to the credit. The tax matters representative is responsible for representing and binding the transferees with respect to all issues affecting the credit, including the amounts expended for the approved remediation, the certificate issued by the department of public health and environment, notifications and correspondence from and with the department of revenue, audit examinations, assessments or refunds, settlement agreements, and the statute of limitations. The transferee is subject to the same statute of limitations with respect to the credit as the transferor of the credit.

(IX) Final resolution of disputes regarding the tax credit between the department of revenue and the tax matters representative, including final determinations, compromises, payment of additional taxes or refunds due, and administrative and judicial decisions, is binding on transferees.

(X) Any person who has claimed a credit or who may be eligible to claim a tax credit either as a taxpayer or a transferee may petition the department of revenue to change the tax matters representative's designation. The executive director shall promulgate rules specifying the procedures for a change to the tax matters representative's designation when the executive director determines that the tax matters representative is unavailable or unwilling to act as the tax matters representative. If the department grants the petition, the new tax matters representative shall serve in that capacity on and after the date the department grants the petition.

(2) (a) For income tax years commencing on or after January 1, 2014, but prior to January 1, 2023, 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) The department of public health and environment must have issued a certificate for the property pursuant to section 25-16-306 (5) (b), C.R.S., 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. 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 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) For any tax year in which a transferable expense amount is transferred pursuant to this subsection (2), the qualified entity shall file a written statement with the department of revenue on a form approved by the department of revenue and the transferee shall file a written statement with the transferee's income tax return specifying the amount transferred to the transferee to be claimed as a credit. A transferee may only claim a credit pursuant to this subsection (2) if the qualified entity's written statement verifies the amount of the tax credit claimed by the transferee.

(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) The transferee shall submit to the department of revenue a form approved by the department establishing that the transferee has satisfied the requirements of this section. The transferee shall also file a copy of the form with the department of public health and environment.

(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 tax credit 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. The tax matters representative is responsible for representing and binding the transferees with respect to all issues affecting the credit, including the amounts expended for the approved remediation, the certificate issued by the department of public health and environment, notifications and correspondence from and with the department of revenue, audit examinations, assessments or refunds, settlement agreements, and the statute of limitations.

(VIII) Final resolution of disputes regarding the tax credit between the department of revenue and the tax matters representative, including final determinations, compromises, payment of additional taxes or refunds due, and administrative and judicial decisions, is binding on transferees.

(d) For purposes of this subsection (2), "qualified entity" means a county, home rule county, city, town, home rule city, home rule city and county, or a private nonprofit entity that is exempt from the income taxes imposed by this article.

(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 the department of public health and environment. 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 calendar years and three million dollars for each calendar year thereafter, 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 million dollars; except that no more than one million dollars in claims shall be placed on the wait list for any given calendar year. 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 million dollars. 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).

(4) This section is repealed, effective December 31, 2029.