First Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 15-1069.01 Esther van Mourik x4215SENATE BILL 15-279 SENATE SPONSORSHIP Neville T. and Jahn, HOUSE SPONSORSHIP Kraft-Tharp and Keyser, Senate Committees House Committees Local Government A BILL FOR AN ACT Concerning surety requirements when a taxpayer appeals a tax bill that the state or a local government claims is due. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Current law requires a taxpayer wishing to appeal a final determination of the executive director of the department of revenue or a final determination of a local government, within a specified time after filing a notice of appeal, to either: Set aside twice the amount of the taxes, interest, and other charges stated in the final determination by filing a surety bond in such amount with the district court; Set aside twice the amount of the taxes, interest, and other charges stated in the final determination by establishing a savings account, deposit account, or certificate of deposit for such amount at a state or national bank or a state or federal savings and loan association doing business in this state; or Deposit the disputed amount with the executive director of the department of revenue. If the taxpayer chooses this option the interest accrual is tolled. Current law also requires home rule jurisdictions and statutory local governments to follow the same requirements for appeals related to the sales and use taxes they impose. The bill specifies that only within a specified number of days after a district court ruling that is adverse to the taxpayer in part or in whole, as opposed to within a specified number of days after the filing of the notice of appeal, may a taxpayer be required by the state or a local government to set aside money as described in current law. Until that time, the bill allows the taxpayer to decide when to set aside money claimed to be owed by the state or a local government. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 39-21-105, amend (4) as follows: 39-21-105. Appeals. (4) (a) (I) If the taxpayer appeals the executive director's final determination to the district court pursuant to this section, then the taxpayer has the option, but may not be required, to: (A) File a surety bond in twice the amount of the taxes, interest, and other charges stated in the executive director's final determination, which are contested on appeal; (B) Deposit in a savings account or deposit account held in or purchase a certificate of deposit issued by a state or national bank or by a state or federal savings and loan association, in accordance with the provisions of section 11-35-101 (1), C.R.S., an amount equal to twice the amount of the taxes, interest, and other charges stated in the final determination by the executive director; or (C) Deposit the disputed amount with the executive director. (II) If the taxpayer chooses to deposit the disputed amount with the executive director as allowed in sub-subparagraph (C) of subparagraph (I) of this paragraph (a), no further interest shall accrue on the deficiency contested during the pendency of the action. At the conclusion of the action, after appeal to the supreme court or the court of appeals or after the time for such appeal has expired, the funds deposited must be, at the direction of the court, either retained by the executive director and applied against the deficiency or returned in whole or in part to the taxpayer with interest at the rate imposed under section 39-21-110.5. No claim for refund of amounts deposited with the executive director need be made by the taxpayer in order for such amounts to be repaid in accordance with the direction of the court. (a) (b) (I) Except as provided in subparagraph (III) of this paragraph (b), within fifteen fourteen days after filing the notice of appeal a district court ruling that is adverse to the taxpayer in part or in whole, the taxpayer shall: (A) File with the district court a surety bond in twice the amount of the taxes, interest, and other charges stated in the final determination by the executive director as due in the district court ruling, which are contested on appeal; (B) The taxpayer may, at his option, satisfy the surety bond requirement by Deposit in a savings account or deposit account held in, or purchase a certificate of deposit issued by, a state or national bank or by a state or federal savings and loan association, in accordance with the provisions of section 11-35-101 (1), C.R.S., an amount equal to twice the amount of the taxes, interest, and other charges stated in the final determination by the executive director district court ruling; or (b) (C) The taxpayer may, at his option, Deposit the disputed amount stated as due in the district court ruling with the executive director. of the department of revenue in lieu of posting a surety bond (II) If such amount is so deposited the taxpayer deposits the amount stated as due in the district court ruling with the executive director as specified in sub-subparagraph (C) of subparagraph (I) of this paragraph (b), no further interest shall accrue on the deficiency contested amount deposited during the pendency of the action. At the conclusion of the action, after appeal to the supreme court or the court of appeals or after the time for such appeal has expired, the funds deposited shall must be, at the direction of the court, either retained by the executive director and applied against the deficiency or returned in whole or in part to the taxpayer with interest at the rate imposed under section 39-21-110.5. No claim for refund of amounts deposited with the executive director of the department of revenue need be made by the taxpayer in order for such amounts to be repaid in accordance with the direction of the court. (III) If the taxpayer has opted to post a bond, make a deposit, or pay the amount stated as due in the district court ruling to the executive director as allowed in paragraph (a) of this subsection (4), such previous payment or posting shall continue in effect and no further payment or posting may be required. SECTION 2. In Colorado Revised Statutes, 29-2-106.1, amend (3) (b) and (3) (c) as follows: 29-2-106.1. Deficiency notice - dispute resolution. (3) (b) If the taxpayer requests a hearing before the executive director, then the local government whose decision is being appealed may not require a bond or payment of tax in lieu thereof; until thirty days after the final decision of the executive director or his delegate but such local government may require a bond or payment of tax in lieu thereof filed with and payable to the local government in the manner provided in section 39-21-111, C.R.S., prior to the hearing before such local government or the executive director if either such local government or the executive director reasonably finds that collection of the tax will be jeopardized by delay or the taxpayer requests a postponement of the hearing before such local government or the executive director, other than on account of a death, physical illness or injury, or catastrophe, which substantially impairs the taxpayer's ability to present his case. Any such bond or payment of tax in lieu thereof shall be filed with and payable to the local government whose decision is being appealed, and such bond shall be filed or such tax shall be paid in the manner provided in section 39-21-105, C.R.S. In the event that payment of the tax or posting of a bond is required by the local government, the taxpayer, after payment of the tax or posting of the bond, may appeal such decision of the local government to the executive director and shall be granted an expedited hearing on such appeal pursuant to section 39-21-103 (6), C.R.S., and the executive director may affirm, reverse, or modify such decision. (c) If the taxpayer appeals the decision of the executive director on the hearing issued pursuant to this subsection (3) to the district court in the manner provided in section 39-21-105, C.R.S., then the tax taxpayer shall be paid required to pay the tax to or post a bond shall be posted with the local government whose decision is being appealed in the manner provided in that section within fourteen days after a district court ruling that is adverse to the taxpayer in part or in whole, unless payment of the taxpayer previously paid the tax or posting of posted a bond, was previously required in which case such previous payment or posting shall continue in effect. SECTION 3. Applicability. This act applies to appeals filed on or after the effective date of this act. SECTION 4. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.