2016 Colorado Revised Statutes
Title 39 - Taxation
Specific Taxes
Article 23.5 - Colorado Estate Tax
§ 39-23.5-108. Payment date - extension - installment

(1) The tax due under this section shall be paid to the department by the person required to file not later than the date the Colorado return is required to be filed under section 39-23.5-107.

(2) If the person required to file has obtained an extension of time for payment of the federal tax or has elected to pay such tax in installments, such person may elect to extend the time for payment of the tax due under this article in accordance with such extension, or to pay such tax in installments, in the same manner as provided for payment of the federal tax. Such election shall be made by:

(a) Filing with the department at the time such tax is due a true copy of the application for extension of time for payment or the election to pay the federal tax in installments with the returns required under section 39-23.5-107; and

(b) In the case of installment payments, an agreement consenting to the creation of a special lien under subsection (5) of this section filed with the department on or before the due date for filing the Colorado return, including extensions of time for filing such return. The department may also grant extensions for the filing of such an agreement.

(3) Any person making an estimated federal estate tax payment with the federal application for extension of time for payment shall make an estimated Colorado estate tax payment to the department not later than the date the application for extension of time for payment is filed under subsection (2) of this section. A true copy of the federal extension of time for payment indicating the action taken by the internal revenue service shall be filed with the department within thirty days of issuance.

(4) Any person making the election to pay the Colorado estate tax in installments under subsection (2) of this section may not defer a percentage of such tax exceeding the percentage of federal tax actually deferred and may not defer an amount of tax greater than the tax attributable to the interest in the closely held business subject to such tax. Proof of the federal estate tax installment payment shall be submitted annually with the Colorado estate tax installment payment.

(5) (a) As used in this subsection (5):

(I) "Deferral period" means the period for which the payment of tax under this article is deferred pursuant to the election to pay such tax in installments under subsection (2) of this section.

(II) "Deferred amount" means the amount of tax under this article that is deferred pursuant to subsection (2) of this section.

(III) "Required interest amount" means the interest payable to the department over the first four years that taxes are deferred pursuant to subsection (2) of this section.

(IV) "Section 6166 lien property" means interests in real and other property to the extent that such interests can be expected to survive the deferral period and are designated in the agreement required by paragraph (b) of subsection (2) of this section consenting to the creation of a special lien under this subsection (5).

(b) In the case of installment payments, the deferred amount, plus any interest, penalties, and costs attributable to such deferred amount, shall be a special lien in favor of the state on the section 6166 lien property. Except as otherwise provided in this subsection (5) and subsection (2) of this section, such special lien shall be subject to the same conditions, limitations, definitions, terms, and other provisions of the internal revenue code as the special lien in favor of the United States under section 6324A of such code for federal estate tax deferred under section 6166 of such code. For the purpose of applying the provisions of such code to the special lien under this subsection (5), the terms defined in paragraph (a) of this subsection (5) shall have the meanings given them in such paragraph, and the term "secretary" shall refer to the department.

(c) (I) As used in this paragraph (c), "value" shall have the same meaning as it has when it is used in section 6324A(b) of the internal revenue code.

(II) The value required as section 6166 lien property shall be the deferred amount and the required interest amount. For this purpose, the deferred amount and the required interest amount shall be determined as of the date prescribed for the payment of the tax imposed by this article, and the value required as section 6166 lien property shall be determined by taking into account any encumbrances including any federal tax liens. Only property subject to the jurisdiction of the courts of this state shall be recognized in determining the value of section 6166 lien property required by this subsection (5).

(d) Except as otherwise provided in this subsection (5), the agreement referred to in this subsection (5) shall meet the requirements of the agreement referred to in section 6324A of the internal revenue code. The personal representative shall be named as agent in the agreement consenting to the special lien unless another person is named as the agent in a similar agreement filed with and accepted by the federal tax authorities. In the case that such other person is named in both such agreements, the department shall deal with such other person in matters relating to the installment payments and the special lien.

(e) The special lien shall arise when the department files notice thereof in accordance with the applicable provisions of the internal revenue code and shall continue until the deferred amount, plus any interest, penalties, and costs attributable to the deferred amount, is satisfied or such lien is released. The department may release such lien in whole or in part.

(f) (I) In the event of any default in the payment of the tax due under this article or any other act or failure to act permitting the acceleration of the payment of installments, the executive director of the department, through the attorney general, may bring and prosecute an action in the name of the state as plaintiff for the purpose of enforcing such lien against all or any of the property subject thereto in all cases where any tax has become a lien upon any property under the provisions of this article. In any such action the owner of any property, or of any interest in the property, against which the lien of any such tax is sought to be enforced, and any predecessor in interest of any such owner whose title or interest was deraigned through any such decedent by will or succession or by decree of distribution of the estate of such decedent or any lien or encumbrance subsequent to the lien of such tax may be made a party defendant.

(II) Actions may be brought against the state by any interested person for the purpose of quieting the title to any property against the lien or claim of lien of any taxes under this article or for the purpose of having it determined that any property is not subject to any lien for taxes, nor chargeable with any tax under this article. An action shall not be maintained where any proceedings are pending in any court of this state wherein the taxability of such transfer and the liability therefor, and the amount thereof, may be determined. All parties interested in said transfer and in the taxability thereof shall be made parties thereto, and any interested person who refuses to join as plaintiff therein may be a defendant. Summons for the state in such action shall be served upon the attorney general. Should the court determine that the property described in the complaint is subject to the lien of said tax and that such property has been transferred within the meaning of this article, the court shall award affirmative relief to the state, and judgment shall be rendered therein in favor of the state ascertaining and determining the amount of such tax, the person liable, and the property chargeable or subject to the lien.

(6) The personal representative shall file notice with the department of any default in the payment of amounts or other act or failure to act with respect to the payment of the corresponding amounts of federal tax or with respect to any bonds or special liens thereon which could or do result in the termination of the extension or deferral of the payment of the federal tax under the internal revenue code. Such notice shall specify the name and account number of the estate and the nature and circumstances of such default, act, or failure to act and shall be filed within ten days of such default, act, or failure to act. The department may accelerate the payment of tax, and interest and penalties thereon, extended or deferred under subsection (2) of this section when:

(a) Any default, other act, or failure to act with respect to the payment of the corresponding amounts of federal tax results in the termination of the extension or of the deferral of the payment of such federal tax; or

(b) Any similar default, act, or failure to act occurs with respect to the payment of the tax due under this article, including any failure to timely file the notice required by this subsection (6) or, in the case of installment payments, with respect to the special lien under subsection (5) of this section, including any failure to add property as required and within the time allowed under the applicable internal revenue code provisions.