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HOUSE BILL 26-1223
BY REPRESENTATIVE(S) Woodrow and Boesenecker, Bacon, Brown,
Clifford, Lindsay, McCormick, Nguyen, Rutinel, Sirota, Smith, Zokaie,
McCluskie, Duran, Ricks;
also SENATOR(S) Ball and Roberts, Amabile, Bridges, Cutter, Kipp,
Mullica, Weissman, Coleman.
CONCERNING MODIFYING CERTAIN TAX EXPENDITURES , AND , IN
CONNECTION THEREWITH, MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, add 39-22-131 as
follows:
39-22-131. Family affordability credit - tax preference
performance statement - legislative declaration - definitions.
(1) (a) I N 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 HEREBY FINDS AND
DECLARES THAT THE PURPOSES OF THE INCOME TAX CREDIT CREATED IN THIS
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
SECTION ARE THE SAME AS THE FAMILY AFFORDABILITY TAX CREDIT : TO
SUBSTANTIALLY REDUCE CHILD POVERTY , MAKE COLORADO MORE
AFFORDABLE FOR FAMILIES , AND HELP FAMILIES AFFORD EXPENSES
ASSOCIATED WITH HAVING CHILDREN BY PROVIDING TAX RELIEF FOR
CERTAIN INDIVIDUALS.
(b) T HE GENERAL ASSEMBLY AND THE STATE AUDITOR , IN
CONSULTATION WITH THE DEPARTMENT , SHALL MEASURE THE
EFFECTIVENESS OF THE INCOME TAX CREDIT CREATED IN THIS SECTION IN
COMBINATION WITH THE FAMILY AFFORDABILITY TAX CREDIT AND, IN THE
SAME MANNER AS THE GENERAL ASSEMBLY AND THE STATE AUDITOR
MEASURE THE EFFECTIVENESS OF THE FAMILY AFFORDABILITY TAX CREDIT
BY DETERMINING THE NUMBER OF COLORADO FAMILIES THAT , AFTER
CLAIMING A CREDIT PURSUANT TO THIS SECTION AND THE FAMILY
AFFORDABILITY TAX CREDIT, NO LONGER FALL BELOW THE FEDERAL
POVERTY LEVEL IN THE TAX YEAR IN WHICH THEY CLAIMED THE CREDITS.
(2) A S USED IN THIS SECTION , UNLESS THE CONTEXT OTHERWISE
REQUIRES:
(a) "CREDIT" MEANS THE CREDIT AGAINST INCOME TAX CREATED IN
THIS SECTION.
(b) "DEPARTMENT" MEANS THE DEPARTMENT OF REVENUE.
(c) "ELIGIBLE CHILD" MEANS A QUALIFYING CHILD , AS DEFINED IN
SECTION 152 (c) OF THE "INTERNAL REVENUE CODE OF 1986"; EXCEPT THAT
THE AGE REQUIREMENTS ARE AS SET FORTH IN SUBSECTIONS (3)(a)(I),
(3)(a)(II), (3)(b)(I), AND (3)(b)(II) OF THIS SECTION.
(d) "FEDERAL POVERTY LEVEL" MEANS THE POVERTY LINE THAT IS
REQUIRED TO BE UPDATED ANNUALLY WITHIN THE FEDERAL POVERTY
GUIDELINES ADOPTED BY THE UNITED STATES DEPARTMENT OF HEALTH AND
HUMAN SERVICES PURSUANT TO 42 U.S.C. SEC. 9902 (2).
(e) "INFLATION" MEANS THE ANNUAL PERCENTAGE CHANGE IN THE
UNITED STATES DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS
CONSUMER PRICE INDEX FOR DENVER-AURORA-LAKEWOOD FOR ALL ITEMS
PAID BY ALL URBAN CONSUMERS, OR ITS APPLICABLE SUCCESSOR INDEX.
PAGE 2-HOUSE BILL 26-1223
(f) "JOINT FILER ADJUSTED BASE INCOME" MEANS, FOR INCOME TAX
YEARS COMMENCING BEFORE JANUARY 1, 2034, AN AMOUNT OF ADJUSTED
GROSS INCOME EQUAL TO THE AMOUNT OF ADJUSTED GROSS INCOME
DETERMINED BY THE DEPARTMENT PURSUANT TO SECTION 39-22-130 (7) TO
BE NECESSARY FOR TWO RESIDENT INDIVIDUALS WHO FILE A JOINT RETURN
TO QUALIFY FOR THE FAMILY AFFORDABILITY TAX CREDIT PURSUANT TO
SECTION 39-22-130 FOR THE INCOME TAX YEAR COMMENCING ON JANUARY
1, 2027.
(g) "SINGLE FILER ADJUSTED BASE INCOME" MEANS, FOR INCOME TAX
YEARS COMMENCING BEFORE JANUARY 1, 2034, AN AMOUNT OF ADJUSTED
GROSS INCOME EQUAL TO THE AMOUNT OF ADJUSTED GROSS INCOME
DETERMINED BY THE DEPARTMENT PURSUANT TO SECTION 39-22-130 (7) TO
BE NECESSARY FOR A SINGLE RESIDENT INDIVIDUAL WHO FILES A SINGLE
RETURN TO QUALIFY FOR THE FAMILY AFFORDABILITY TAX CREDIT
PURSUANT TO SECTION 39-22-130 FOR THE INCOME TAX YEAR COMMENCING
ON JANUARY 1, 2027.
(3) (a) IN ADDITION TO THE CHILD TAX CREDIT ALLOWED BY SECTION
39-22-129 AND THE FAMILY AFFORDABILITY TAX CREDIT ALLOWED BY
SECTION 39-22-130, FOR INCOME TAX YEARS COMMENCING ON OR AFTER
JANUARY 1, 2027, A RESIDENT INDIVIDUAL WHO FILES A SINGLE RETURN IS
ALLOWED A CREDIT AGAINST THE INCOME TAXES IMPOSED PURSUANT TO
THIS ARTICLE 22 FOR:
(I) EACH ELIGIBLE CHILD OF THE RESIDENT INDIVIDUAL WHO IS FIVE
YEARS OLD OR YOUNGER AT THE CLOSE OF THE INCOME TAX YEAR IN AN
AMOUNT DETERMINED BY STAFF OF THE LEGISLATIVE COUNCIL PURSUANT TO
SUBSECTION (5)(b) OF THIS SECTION; AND
(II) EACH ELIGIBLE CHILD OF THE RESIDENT INDIVIDUAL WHO IS SIX
YEARS OLD OR OLDER BUT LESS THAN SEVENTEEN YEARS OLD AT THE CLOSE
OF THE INCOME TAX YEAR IN AN AMOUNT THAT IS SEVENTY -FIVE PERCENT
OF THE AMOUNT ALLOWED IN SUBSECTION (3)(a)(I) OF THIS SECTION.
(b) IN ADDITION TO THE CHILD TAX CREDIT ALLOWED BY SECTION
39-22-129 AND THE FAMILY AFFORDABILITY TAX CREDIT ALLOWED BY
SECTION 39-22-130, FOR INCOME TAX YEARS COMMENCING ON OR AFTER
JANUARY 1, 2027, TWO RESIDENT INDIVIDUALS WHO FILE A JOINT RETURN
ARE ALLOWED A CREDIT AGAINST THE INCOME TAXES DUE IMPOSED
PAGE 3-HOUSE BILL 26-1223
PURSUANT TO THIS ARTICLE 22 FOR:
(I) EACH ELIGIBLE CHILD OF THE RESIDENT INDIVIDUAL WHO IS FIVE
YEARS OLD OR YOUNGER AT THE CLOSE OF THE INCOME TAX YEAR IN AN
AMOUNT DETERMINED BY STAFF OF THE LEGISLATIVE COUNCIL PURSUANT TO
SUBSECTION (5)(b) OF THIS SECTION; AND
(II) EACH ELIGIBLE CHILD OF THE RESIDENT INDIVIDUAL WHO IS SIX
YEARS OLD OR OLDER BUT LESS THAN SEVENTEEN YEARS OLD AT THE CLOSE
OF THE INCOME TAX YEAR IN AN AMOUNT THAT IS SEVENTY -FIVE PERCENT
OF THE AMOUNT ALLOWED IN SUBSECTION (3)(b)(I) OF THIS SECTION.
(4) (a) N OTWITHSTANDING SUBSECTION (3) OF THIS SECTION , FOR
INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2027, THE
CREDIT AMOUNTS IN:
(I) SUBSECTION (3)(a)(I) OF THIS SECTION ARE REDUCED, BUT NOT
BELOW ZERO , BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED
SEVENTY-FIVE ONE -THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND
DOLLARS BY WHICH A RESIDENT INDIVIDUAL 'S ADJUSTED GROSS INCOME
EXCEEDS THE SINGLE FILER ADJUSTED BASE INCOME; AND
(II) SUBSECTION (3)(b)(I) OF THIS SECTION ARE REDUCED, BUT NOT
BELOW ZERO , BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED
SEVENTY-FIVE ONE -THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND
DOLLARS BY WHICH TWO RESIDENT INDIVIDUALS' ADJUSTED GROSS INCOME
EXCEEDS THE JOINT FILER ADJUSTED BASE INCOME.
(b) FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1,
2028, THE DEPARTMENT SHALL ADJUST THE JOINT FILER ADJUSTED BASED
INCOME AND SINGLE FILER ADJUSTED BASE INCOME TO REFLECT INFLATION
FOR EACH INCOME TAX YEAR IN WHICH THE CREDIT DESCRIBED IN THIS
SECTION IS ALLOWED IF CUMULATIVE INFLATION SINCE THE LAST
ADJUSTMENT, WHEN APPLIED TO THE CURRENT LIMITS , RESULTS IN AN
INCREASE OF AT LEAST ONE THOUSAND DOLLARS WHEN THE ADJUSTED
LIMITS ARE ROUNDED TO THE NEAREST ONE THOUSAND DOLLARS.
(5) B EGINNING WITH THE QUARTERLY JUNE REVENUE FORECAST
THAT LEGISLATIVE COUNCIL STAFF PRESENTS IN JUNE OF 2027, AND FOR
EACH JUNE REVENUE FORECAST THEREAFTER, AS PART OF THE QUARTERLY
PAGE 4-HOUSE BILL 26-1223
JUNE REVENUE FORECAST, LEGISLATIVE COUNCIL STAFF SHALL DETERMINE:
(a) F OR THE CURRENT CALENDAR YEAR , A PROJECTION OF THE
CHANGE IN STATE REVENUE DIRECTLY ATTRIBUTABLE TO THE CHANGES
MADE IN THIS HOUSE BILL 26-1223, NOTWITHSTANDING THE CREDIT
CREATED IN THIS SECTION;
(b) A DOLLAR AMOUNT OF THE CREDIT AVAILABLE PURSUANT TO
SUBSECTIONS (3)(a)(I) AND (3)(b)(I) OF THIS SECTION , WHICH DOLLAR
AMOUNT MUST BE THE SAME FOR BOTH SUBSECTIONS (3)(a)(I) AND (3)(b)(I)
OF THIS SECTION , SUCH THAT THE STAFF OF THE LEGISLATIVE COUNCIL
PROJECTS, FOR THE CURRENT CALENDAR YEAR , THAT THE TOTAL DOLLAR
AMOUNT OF CREDITS CLAIMED PURSUANT TO SUBSECTION (3) OF THIS
SECTION WILL EQUAL THE DOLLAR AMOUNT THAT STAFF OF THE LEGISLATIVE
COUNCIL DETERMINES PURSUANT TO SUBSECTION (5)(a) OF THIS SECTION.
(6) I N THE CASE OF A PART -YEAR RESIDENT , THE CREDIT IS
APPORTIONED IN THE RATIO DETERMINED UNDER SECTION 39-22-110 (1).
(7) THE CREDIT IS NOT CONSIDERED TO BE INCOME OR RESOURCES
FOR THE PURPOSE OF DETERMINING ELIGIBILITY FOR THE PAYMENT OF PUBLIC
ASSISTANCE BENEFITS AND MEDICAL ASSISTANCE BENEFITS AUTHORIZED
UNDER STATE LAW OR FOR A PAYMENT MADE UNDER ANY OTHER PUBLICLY
FUNDED PROGRAM.
(8) T HE AMOUNT OF THE CREDIT THAT EXCEEDS THE RESIDENT
INDIVIDUAL'S INCOME TAXES DUE IS REFUNDED TO THE INDIVIDUAL.
(9) T HE DEPARTMENT IS AUTHORIZED AND ENCOURAGED TO
DEVELOP A MEANS OF REFUNDING THE CREDITS TO RESIDENT INDIVIDUALS
WHO QUALIFY FOR THE CREDITS IN TWELVE EQUAL MONTHLY REFUNDS
RATHER THAN ANNUALLY.
(10) NOTWITHSTANDING SECTION 39-21-304 (4), THE CREDIT DOES
NOT REPEAL AFTER A SPECIFIED PERIOD OF TAX YEARS.
SECTION 2. In Colorado Revised Statutes, 39-26-102, amend
(5.7) and (15)(c) as follows:
39-26-102. Definitions - repeal.
PAGE 5-HOUSE BILL 26-1223
As used in this article 26, unless the context otherwise requires:
(5.7) "Mainframe computer access" means the provision of access
to computer equipment for the purpose of storing or processing data.
"Mainframe computer access" does not include the provision of access to
computer equipment for the purpose of examining or acquiring data
maintained by the vendor. "Mainframe computer access" does not include
the provision of access to computer equipment incident to electronic
computer software delivery, as defined in subsection (15)(c)(II)(C) of this
section, or incident to the use of computer software hosted by an application
service provider, as defined in subsection (15)(c)(II)(A) of this section.
(15) (c) (I) "Tangible personal property" commencing July 1, 2012,
shall include INCLUDES computer software. if the computer software meets
all of the following criteria:
(A) The computer software is prepackaged for repeated sale or
license;
(B) The use of the computer software is governed by a tear-open
nonnegotiable license agreement; and
(C) The computer software is delivered to the customer in a tangible
medium. Computer software is not delivered to the customer in a tangible
medium if it is provided through an application service provider, delivered
by electronic computer software delivery, or transferred by load and leave
computer software delivery.
(II) As used in this paragraph (c) SUBSECTION (15)(c), unless the
context otherwise requires:
(A) "Application service provider" or "ASP" means an entity that
retains custody over or hosts computer software for use by third parties.
Users of the computer software hosted by an ASP typically will access the
computer software via the internet. The ASP may or may not own or license
the computer software, but generally will own and maintain hardware and
networking equipment required for the user to access the computer
software. Where the ASP owns the computer software, the ASP may charge
the user a license fee for the computer software or a fee for maintaining the
computer software or hardware used by its customer.
PAGE 6-HOUSE BILL 26-1223
(B) "Computer software" means a set of coded instructions THAT
ARE BOTH designed to cause a computer or automatic data processing
equipment to perform a task OTHER ELECTRONIC DEVICE TO PERFORM A
TASK AND ARE DELIVERED BY ANY MEANS , INCLUDING COMPACT DISC ,
DOWNLOAD, OR REMOTE ACCESS THROUGH THE INTERNET . "COMPUTER
SOFTWARE" INCLUDES APPLICATIONS INSTALLED ON CELLULAR PHONES ,
TABLETS, OR OTHER MOBILE DEVICES.
(C) "Electronic computer software delivery" means computer
software transferred by remote telecommunications to the purchaser's
computer, where the purchaser does not obtain possession of any tangible
medium in the transaction.
(D) "Load and leave computer software delivery" means delivery of
computer software to the purchaser by use of a tangible medium where the
title to or possession of the tangible medium is not transferred to the
purchaser, and where the computer software is manually loaded by the
vendor, or the vendor's representative, at the purchaser's location.
(E) "Prepackaged for repeated sale or license" means computer
software that is prepackaged for repeated sale or license in the same form
to multiple users without modification, and is typically sold in a
shrink-wrapped box.
(F) "Tangible medium" means a tape, disk, compact disc, card, or
comparable physical medium.
(G) "Tear-open nonnegotiable license agreement" means a license
agreement contained on or in the package, which by its terms becomes
effective upon opening of the package and accepting the licensing
agreement. "Tear-open nonnegotiable license agreement" does not include
a written license agreement or contract signed by the licensor and the
licensee.
(III) The internalized instruction code that controls the basic
operations, such as arithmetic and logic, of the computer causing it to
execute instructions contained in system programs is an integral part of the
computer and is not normally accessible or modifiable by the user. Such
internalized instruction code is considered part of the hardware and
considered tangible personal property that is taxable pursuant to section
PAGE 7-HOUSE BILL 26-1223
39-26-104 (1)(a). The fact that the vendor does or does not charge
separately for such code is immaterial.
(IV) If a retailer sells computer software to a Colorado purchaser
that is considered tangible personal property taxable pursuant to section
39-26-104 (1)(a) and the Colorado purchaser pays the retailer for a quantity
of computer software licenses with the intent to distribute the computer
software to any of the purchaser's locations outside of Colorado, the
measure of Colorado sales tax due is the total of the license fees associated
only with the licenses that are actually used in Colorado. The Colorado
purchaser shall provide a written statement to the retailer, attesting to the
amount of the license fees associated with Colorado and with points outside
of Colorado. The written statement shall relieve the retailer of any liability
associated with the proration.
SECTION 3. In Colorado Revised Statutes, 39-26-102, add (21)(c)
as follows:
39-26-102. Performance statement - definitions - repeal.
As used in this article 26, unless the context otherwise requires:
(21) (c) (I) BEGINNING JULY 1, 2026, BUT BEFORE JULY 1, 2046, A
RETAILER THAT SELLS FOOD OR DRINK AS DESCRIBED IN SECTION 39-26-104
(1)(e) IS DEEMED TO USE GAS AND ELECTRICITY IN THE PROCESSING OF
PREPARED FOOD AS FOLLOWS:
(A) I F THE RETAILER 'S SALES OF PREPARED FOOD EXCEED
TWENTY-FIVE PERCENT OF THE RETAILER 'S TOTAL SALES REVENUE , ONE
HUNDRED PERCENT OF THE PURCHASE PRICE PAID BY THE RETAILER FOR GAS
AND ELECTRICITY IS EXEMPT FROM TAXATION UNDER THE PROVISIONS OF
THIS PART 1. THE RETAILER MAY CLAIM THE EXEMPTION DESCRIBED IN THIS
SUBSECTION (21)(c)(I)(A) WITH THE GAS OR ELECTRIC SERVICE UTILITY OR
AS A CREDIT AGAINST THE TAX COLLECTED BY THE RETAILER.
(B) IF THE RETAILER'S SALES OF PREPARED FOOD ARE TWENTY-FIVE
PERCENT OR LESS OF THE RETAILER'S TOTAL SALES REVENUE, THE RETAILER
IS ALLOWED A CREDIT AGAINST THE TAX COLLECTED BY THE RETAILER
PURSUANT TO THIS PART 1 IN AN AMOUNT EQUAL TO ONE -HALF OF ONE
PERCENT OF A RETAILER'S SALES OF PREPARED FOOD.
PAGE 8-HOUSE BILL 26-1223
(II) A RETAILER WHO CHOOSES TO CLAIM THE CREDIT ALLOWED BY
THIS SUBSECTION (21)(c) MUST CLAIM THE CREDIT FOR THE PREVIOUS
CALENDAR YEAR ON THE SALES TAX RETURN MADE FOR THE MONTH OF
JANUARY; EXCEPT THAT A SEASONAL RETAILER MUST CLAIM THE CREDIT ON
THE SALES TAX RETURN MADE FOR THE MONTH OF JUNE.
SECTION 4. In Colorado Revised Statutes, 39-26-105, amend
(1.3)(a)(III)(C), (1.3)(a)(V)(B), (1.3)(a)(V)(C), (1.3)(b)(I), (1.3)(c),
(1.3)(c.5), and (1.3)(f.7); and add (1.3)(a)(V)(D), (1.3)(a)(V)(E), and
(1.3)(b)(III) as follows:
39-26-105. Vendor liable for tax - definitions - repeal.
(1.3) (a) As used in this subsection (1.3), unless the context
otherwise requires:
(III) (C) "Qualifying retailer" means, for the specified sales tax
period PERIODS in subsection (1.3)(a)(V)(C) SUBSECTIONS (1.3)(a)(V)(C),
(1.3)(a)(V)(D), and (1.3)(a)(V)(E) of this section, a retailer doing business
in the state that timely files sales tax returns as required under subsection
(1)(b) of this section and section 39-26-109 and that operates in the
alcoholic beverages drinking places industry, the catering industry, the food
services contractor industry, the restaurant and other eating places industry,
or the mobile food services industry, or that operates a hotel-operated
restaurant, bar, or catering service.
(V) (B) On and after June 14, 2021, but before June 3, 2022 THE
EFFECTIVE DATE OF THIS SUBSECTION (1.3)(a)(V)(B), AS AMENDED ,
"specified sales tax period" means sales made in June 2021, July 2021, and
August 2021, for which monthly returns must be filed pursuant to
subsection (1)(b) of this section, on July 20, 2021, August 20, 2021, and
September 20, 2021, respectively.
(C) On and after June 3, 2022 ON AND AFTER THE EFFECTIVE DATE
OF THIS SUBSECTION (1.3)(a)(V)(C), AS AMENDED , "specified sales tax
period" means sales made in July 2022, August 2022, and September 2022,
for which monthly returns must be filed pursuant to subsection (1)(b) of this
section, on August 20, 2022, September 20, 2022, and October 20, 2022,
respectively.
PAGE 9-HOUSE BILL 26-1223
(D) O N AND AFTER THE EFFECTIVE DATE OF THIS SUBSECTION
(1.3)(a)(V)(D), AS AMENDED, "SPECIFIED SALES TAX PERIOD" MEANS SALES
MADE IN JULY 2027, AUGUST 2027, NOVEMBER 2027, AND DECEMBER 2027,
FOR WHICH MONTHLY RETURNS MUST BE FILED PURSUANT TO SUBSECTION
(1)(b) OF THIS SECTION , ON AUGUST 20, 2027, SEPTEMBER 20, 2027,
DECEMBER 20, 2027, AND JANUARY 20, 2028, RESPECTIVELY.
(E) IN ADDITION TO THE DEFINITION IN SUBSECTION (1.3)(a)(V)(D),
ON AND AFTER THE EFFECTIVE DATE OF THIS SUBSECTION (1.3)(a)(V)(E), AS
AMENDED, "SPECIFIED SALES TAX PERIOD" MEANS SALES MADE IN JULY 2028,
AUGUST 2028, NOVEMBER 2028, AND DECEMBER 2028, FOR WHICH
MONTHLY RETURNS MUST BE FILED PURSUANT TO SUBSECTION (1)(b) OF THIS
SECTION, ON AUGUST 20, 2028, SEPTEMBER 20, 2028, DECEMBER 20, 2028,
AND JANUARY 20, 2029, RESPECTIVELY.
(b) (I) A qualifying retailer in the alcoholic beverages drinking
places industry, in the restaurant and other eating places industry, in the
food services contractor industry, or operating a hotel-operated restaurant,
bar, or catering service may deduct from state net taxable sales the lesser of
state net taxable sales or, EXCEPT AS PROVIDED IN SUBSECTION (1)(b)(III) OF
THIS SECTION, seventy thousand dollars and retain the resulting sales tax
collected for each month specified in subsection (1.3)(a)(V) of this section.
(III) F OR EACH MONTH SPECIFIED IN SUBSECTIONS (1.3)(a)(V)(D)
AND (1.3)(a)(V)(E) OF THIS SECTION, THE MAXIMUM DEDUCTION ALLOWED
PURSUANT TO SUBSECTION (1.3)(b)(I) OF THIS SECTION IS FOURTEEN
THOUSAND DOLLARS.
(c) (I) A qualifying retailer in the mobile food services industry may
deduct from state net taxable sales the lesser of aggregate state net taxable
sales for all sites or, EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION
(1)(c)(II) OF THIS SECTION, seventy thousand dollars per motorized vehicle
or nonmotorized cart, not to exceed five motorized vehicles or
nonmotorized carts, and retain the resulting state sales tax collected for each
month specified IN THE SPECIFIED SALES TAX PERIOD in subsection
(1.3)(a)(V)(A) of this section.
(II) FOR EACH MONTH SPECIFIED IN SUBSECTIONS (1.3)(a)(V)(D) AND
(1.3)(a)(V)(E) OF THIS SECTION , THE MAXIMUM DEDUCTION ALLOWED
PURSUANT TO SUBSECTION (1.3)(c)(I) OF THIS SECTION IS FOURTEEN
PAGE 10-HOUSE BILL 26-1223
THOUSAND DOLLARS.
(c.5) (I) A qualifying retailer in the catering industry may deduct
from state net taxable sales the lesser of aggregate state net taxable sales for
all events or, EXCEPT AS PROVIDED IN SUBSECTION (1)(c.5)(II) OF THIS
SECTION, seventy thousand dollars and retain the resulting state sales tax
collected for each month specified in subsection (1.3)(a)(V) of this section.
(II) FOR EACH MONTH SPECIFIED IN SUBSECTIONS (1.3)(a)(V)(D) AND
(1.3)(a)(V)(E) OF THIS SECTION , THE MAXIMUM DEDUCTION ALLOWED
PURSUANT TO SUBSECTION (1.3)(c.5)(I) OF THIS SECTION IS FOURTEEN
THOUSAND DOLLARS.
(f.7) To the extent that information is available, and without
changing the sales tax return form, the department of revenue shall include
a report to its committee of reference at a hearing held in January 2023
EACH YEAR, pursuant to section 2-7-203 (2)(a) of the "State Measurement
for Accountable, Responsive, and Transparent (SMART) Government Act"
specifying:
(I) The amount of sales tax revenue that the state did not collect in
2022 THE PREVIOUS CALENDAR YEAR as a result of the deduction allowed
in this subsection (1.3); and
(II) How many retailers elected to take advantage of the deduction
allowed in this subsection (1.3) in 2022 THE PREVIOUS CALENDAR YEAR.
SECTION 5. In Colorado Revised Statutes, 39-26-123, amend
(3)(b)(I)(B) as follows:
39-26-123. Receipts - disposition - transfers of general fund
surplus - sales tax holding fund - creation - definitions.
(3) For any state fiscal year commencing on or after July 1, 2013,
the state treasurer shall credit eighty-five percent of all net revenue
collected under this article 26 to the old age pension fund created in section
1 of article XXIV of the state constitution. The state treasurer shall credit
to the general fund the remaining fifteen percent of the net revenue, less:
(b) (I) (B) Except as set forth in subsection (3)(b)(II) of this section
PAGE 11-HOUSE BILL 26-1223
and subject to subsection (3)(b)(III) of this section, beginning January 1,
2026, AND UNTIL DECEMBER 31, 2026, MONTHLY, an amount equal to one
and six hundred fifty-five thousandths percent of net revenue excluding net
revenue collected under part 2 of this article 26, which amount the state
treasurer shall credit to the housing development grant fund created in
section 24-32-721 (1); BEGINNING JANUARY 1, 2027, AND UNTIL DECEMBER
31, 2028, MONTHLY , AN AMOUNT EQUAL TO ONE AND SIX HUNDRED
TWENTY-NINE THOUSANDTHS PERCENT OF NET REVENUE EXCLUDING NET
REVENUE COLLECTED UNDER PART 2 OF THIS ARTICLE 26, WHICH AMOUNT
THE STATE TREASURER SHALL CREDIT TO THE HOUSING DEVELOPMENT
GRANT FUND CREATED IN SECTION 24-32-721 (1); AND, BEGINNING JANUARY
1, 2029, MONTHLY , AN AMOUNT EQUAL TO ONE AND SIX HUNDRED
TWENTY-FIVE THOUSANDTHS PERCENT OF NET REVENUE EXCLUDING NET
REVENUE COLLECTED UNDER PART 2 OF THIS ARTICLE 26, WHICH AMOUNT
THE STATE TREASURER SHALL CREDIT TO THE HOUSING DEVELOPMENT
GRANT FUND CREATED IN SECTION 24-32-721 (1).
SECTION 6. In Colorado Revised Statutes, 39-26-713, add (3) as
follows:
39-26-713. Tangible personal property.
(3) T HE SALE , STORAGE , USE , OR CONSUMPTION OF COMPUTER
SOFTWARE, AS DEFINED IN SECTION 39-26-102 (15)(c)(II)(B), IS EXEMPT
FROM TAXATION UNDER THE PROVISIONS OF PARTS 1 AND 2 OF THIS ARTICLE
26 IF THAT SALE, STORAGE, USE, OR CONSUMPTION OF COMPUTER SOFTWARE
IS EITHER GOVERNED BY A NEGOTIABLE LICENSE AGREEMENT OR DEVELOPED
FOR USE BY A PARTICULAR USER.
(a) F OR PURPOSES OF THIS ARTICLE 26, "NEGOTIATED LICENSE
AGREEMENT" MEANS A WRITTEN AGREEMENT OR CONTRACT THAT IS
INDIVIDUALLY BARGAINED BETWEEN THE LICENSOR AND LICENSEE AND
THAT IS SIGNED IN WRITING BY AUTHORIZED REPRESENTATIVES OF BOTH THE
LICENSOR AND LICENSEE PRIOR TO OR CONTEMPORANEOUS WITH THE
LICENSEE'S ACCESS TO OR USE OF THE SOFTWARE.
(b) FOR PURPOSES OF THIS ARTICLE 26, "INDIVIDUALLY BARGAINED
BETWEEN THE LICENSOR AND LICENSEE " SPECIFICALLY EXCLUDES A
STANDARD, FORM, OR BOILERPLATE AGREEMENT THAT IS OFFERED BY THE
LICENSOR ON A NONNEGOTIABLE OR SUBSTANTIALLY NONNEGOTIABLE BASIS
PAGE 12-HOUSE BILL 26-1223
TO MULTIPLE LICENSEES, REGARDLESS OF WHETHER THE AGREEMENT BEARS
A HANDWRITTEN OR ELECTRONIC SIGNATURE , OR THE AGREEMENT IS
PRINTED ON, WITHIN, OR AFFIXED TO THE SOFTWARE PACKAGING; EMBEDDED
WITHIN THE COMPUTER SOFTWARE ITSELF; OR PRESENTED AS PART OF THE
TERMS AND CONDITIONS OF ANY WEBSITE OR APPLICATION THROUGH WHICH
THE SOFTWARE IS ACQUIRED, ACCESSED, OR USED.
(c) F OR PURPOSES OF THIS ARTICLE 26, "SIGNED IN WRITING BY
AUTHORIZED REPRESENTATIVES OF BOTH THE LICENSOR AND LICENSEE "
SPECIFICALLY EXCLUDES AN ACCEPTANCE BY THE LICENSEE ON A
CLICK-THROUGH, BROWSE -WRAP, SHRINK -WRAP, EMBEDDED SIGNATURE ,
IMPLIED, ACCOUNT CREATION, OR ANY OTHER AUTOMATED BASIS ; EXCEPT
THAT "SIGNED IN WRITING BY AUTHORIZED REPRESENTATIVES OF BOTH THE
LICENSOR AND LICENSEE" MAY INCLUDE A SIGNATURE PERFORMED THROUGH
AN ELECTRONIC SIGNATURE METHOD AUTHORIZED PURSUANT TO SECTION
39-21-120 AND DEPARTMENT RULES AND SPECIFICALLY INCLUDES
ELECTRONIC SIGNATURE METHODS SUCH AS DOCUSIGN OR A SIMILAR
AUTHENTICATED ELECTRONIC SIGNATURE.
(d) T HE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE
MAY ADOPT RULES NECESSARY TO IMPLEMENT THIS SECTION.
SECTION 7. In Colorado Revised Statutes, 39-26-715, add
(2)(b)(IV) as follows:
39-26-715. Fuel and oil - definitions.
(2) The following are exempt from taxation under the provisions of
part 2 of this article 26:
(b) (IV) BEGINNING JULY 1, 2026, BUT BEFORE JULY 1, 2046, FOR
PURPOSES OF THIS SUBSECTION (2)(b), THE DEEMED USAGE RULES SET FORTH
IN SECTION 39-26-102 (21)(c)(I) APPLY.
SECTION 8. Appropriation. (1) For the 2026-27 state fiscal year,
$48,326 is appropriated to the department of revenue. This appropriation is
from the general fund. To implement this act, the department may use this
appropriation as follows:
(a) $10,086 to the executive director's office for personal services
PAGE 13-HOUSE BILL 26-1223
related to administration and support;
(b) $13,821 to the taxation business group for personal services
related to taxation services; and
(c) $24,419 for tax administration IT system (GenTax) support.
SECTION 9. Applicability. Sections 2 and 3 of this act apply to the
sale, storage, use, and consumption of tangible personal property on or after
January 1, 2027.
SECTION 10. Effective date. This act takes effect upon passage;
except that section 1 of this act takes effect only if House Bill 26-1221 and
House Bill 26-1222 do not become law.
SECTION 11. Safety clause. The general assembly finds,
determines, and declares that this act is necessary for the immediate
PAGE 14-HOUSE BILL 26-1223
preservation of the public peace, health, or safety or for appropriations for
the support and maintenance of the departments of the state and state
institutions.
____________________________ ____________________________
Julie McCluskie James Rashad Coleman, Sr.
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Vanessa Reilly Esther van Mourik
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 15-HOUSE BILL 26-1223