Summary
Colorado Revised Statute 39-30.5-106 gives any county, municipality, or special district the power to exempt from its levy and collection of property tax up to 100 percent for the property tax year commencing on January 1, 2021.
In order to attract new enterprises, any municipality may negotiate an incentive payment or tax credit. However, the amount shall not exceed the amount of taxes levied by the municipality per Colorado Revised Statute 31-15-903.
Overview
Type: Tax waiver
For: Business Personal Property Tax
OEDIT division: Business Funding and Incentives
In addition to powers listed in Statute 39-30.5-106 and Statute 31-15-903, under TABOR local taxing entities "may enact cumulative uniform exemptions and credits to reduce or end business personal property taxes" (Article X, Sec. 20 (8)(b)).
Local governments can enact incentive payments or property tax rebates related to economic development. A county, municipality, or special district can enter into negotiations for an incentive payment with owners of new business facilities.
A county, municipality, or special district may also negotiate an incentive payment or credit with owners of existing business facilities, located in their jurisdiction, based on verifiable documentation demonstrating that there is a substantial risk that the owner of the existing business facility will relocate it out of state. The incentives cannot exceed 100 percent of the personal property taxes paid to the county, municipality, or special district.
For agreements made prior to August 6, 2014, the agreement cannot last more than ten years. For agreements made after August 6, 2014, the agreement may not last longer than thirty-five years. For further information on the exemption rules regarding business personal property tax, please refer to Statute 39-3-119.5.
Certain local taxing entities in Colorado already provide business personal property tax incentives, such as El Paso County and the City of Colorado Springs.
In some cases, such as the Rural Jump-Start program, it is required that a local taxing entity waive business personal property tax, with the intent of bolstering economic activity in the region. Please contact the Program Manager for questions regarding a specific program’s requirements.
The information provided below is courtesy of OEDIT. The Colorado Department of Revenue (DOR) is the final determination of decisions. Any discrepancies should be addressed by DOR. Additional information can be found on the Colorado Department of Revenue's (DOR) website.
The following products and services are all exempt from state sales and use tax:
| Name | Description | Link |
|---|---|---|
| Residential Energy Usage | All gas, electricity, coal, wood and fuel oil. | Sales 66: Sales Tax Exemption on Residential Energy Usage (PDF) |
| Medical Equipment & Medicine | For qualifying sales of drugs, medical equipment, and supplies | Sales & Use Tax Topics: Medical Exemptions (PDF) |
| Coins and Precious Metal Bullion | Retail sales of coins and precious metal bullion are exempt from sales tax | Sales Tax Exemptions for Coins and Precious Metal Bullion (PDF) |
| Farm Equipment/ Seeds, Plants and Trees, Pesticides | Certain items of tangible personal property used for agricultural purposes | Sales & Use Tax Topics: Agriculture (PDF) |
| Manufacturing | For businesses that manufacture tangible personal property for the purchase of 1) Ingredients and component parts 2) property brought into Colorado temporarily for testing, modification, or inspection 3) Gas, electricity, and other fuels 4) Machinery and Machine tools | Sales & Use Tax Topics: Manufacturing (PDF) |
| Sales of Low-Emitting Vehicles | Motor vehicles greater than 10,000 pounds gross motor vehicle weight rating (GVWR) that are certified by the United States Environmental Protection Agency (EPA) or any state provided in the Federal Clean Air Act as meeting an emission standard equal to or more stringent than the low-emitting vehicle (LEV) standard are exempt from state sales and use tax. | Sales and Use Tax Exemption for Low Emitting Heavy Vehicles (PDF) |
| School Related Sales | Sales made by schools, school activity booster organizations, and student classes or organizations are exempt from state sales tax if all proceeds of the sale are for the benefit of a school or school-approved student organization | Sales Tax Exemption on School-Related Items (PDF) |
| Renewable Energy Components | For components used in the production of alternating current electricity from a renewable energy source. | Sales & Use Tax Topics: Renewable Energy Components (PDF) |
| Beetle Wood Products | Wood from salvaged trees killed or infested in Colorado by mountain pine beetles or spruce beetles | Sales & Use Tax Topics: Beetle Wood Products (PDF) |
| Space Flight | Tangible Personal Property to be placed or used aboard a space vehicle, Space vehicles, Fuel of a quality that is used exclusively for space flight | HOUSE BILL 14-1178 (PDF) |
| Aircraft and Aircraft Parts | Aircraft used in interstate commerce by a commercial airline and parts permanently affixed to aircraft | Sales Tax Exemption on Aircraft and Aircraft Parts (PDF) |
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