First Regular Session
Sixty-first General Assembly
LLS NO. 970144.01 JAP
HOUSE BILL 971004
STATE OF COLORADO
BY REPRESENTATIVE McElhany
A BILL FOR AN ACT
CONCERNING THE CREATION OF A STATE INCOME TAX CREDIT
FOR DONATIONS OF HIGH TECHNOLOGY PROPERTY FOR EDUCATIONAL PURPOSES.
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments which may be subsequently
Creates a corporate income tax credit for high technology property donated by a corporate taxpayer to an educational institution (a school district or private school), institution of higher education, or public library. Provides that the amount of the credit shall be 20% of the value of the donated property or 30% of the value of the property if the receiving entity is located in a rural school district.
To qualify for the credit, requires that an affidavit from the school district, school, institution, or library acknowledging receipt of the property be filed with the taxpayer's income tax return. Prohibits any institution or library from accepting property in a given calendar year worth more than an aggregate amount equal to $100 times the service population of the institution or library. Provides that the receiving entity is not required to accept any high technology property that the receiving entity determines will not assist in implementing its technology plan or will not be useful.
Establishes the value of donated property as the value claimed as a charitable contribution deduction on the taxpayer's federal income tax return or, if no deduction has been claimed, (1) if the property is new, the price paid for the property or the cost of manufacturing the property, or (2) if the property is not new, the value stated on the most recent notice of valuation for the property. Permits taxpayers to include the value of any maintenance agreement that is provided with the donated property as part of the property's value. Requires taxpayers claiming the credit to add the amount of any federal deduction for donated high technology property back to their taxable income for state income tax purposes.
Authorizes the department of revenue to require additional information from taxpayers concerning the price paid for donated property, the cost of manufacturing the donated property, and the valuation for assessment of the donated property.
Limits the amount of the credit to the taxpayer's actual tax liability and permits a 3year carryforward.
Defines "high technology property", what constitutes "new" property, "educational institutions" that may receive qualifying donations, "rural districts", "service populations", and a "technology plan".
Makes a conforming amendment.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Part 5 of article 22 of title 39, Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW SECTION to read:
3922520. Tax credit for donations of high technology property to educational institutions. (1) (a) FOR INCOME TAX YEARS COMMENCING ON AND AFTER JANUARY 1, 1998, THERE SHALL BE ALLOWED A CREDIT WITH RESPECT TO THE INCOME TAXES IMPOSED PURSUANT TO PART 3 OF THIS ARTICLE TO EACH TAXPAYER WHO DONATES HIGH TECHNOLOGY PROPERTY TO ANY EDUCATIONAL INSTITUTION IN ORDER TO ENHANCE THE EFFECTIVENESS OF THAT INSTITUTION'S TECHNOLOGY PLAN, AS DEFINED IN PARAGRAPH (f) OF SUBSECTION (7) OF THIS SECTION, TO ANY INSTITUTION OF HIGHER EDUCATION, AS DEFINED IN SECTION 2235103, C.R.S., OR TO ANY PUBLIC LIBRARY, AS DEFINED IN SECTION 2490103 (13), C.R.S.
(b) THE AMOUNT OF THE CREDIT DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (1) SHALL BE AN AMOUNT EQUAL TO TWENTY PERCENT OF THE VALUE OF THE DONATED HIGH TECHNOLOGY PROPERTY; HOWEVER, THE AMOUNT OF THE CREDIT SHALL BE THIRTY PERCENT OF THE VALUE OF THE DONATED HIGH TECHNOLOGY PROPERTY IF THE EDUCATIONAL INSTITUTION, INSTITUTION OF HIGHER EDUCATION, OR PUBLIC LIBRARY IS LOCATED IN A RURAL DISTRICT, AS DEFINED IN PARAGRAPH (d) OF SUBSECTION (7) OF THIS SECTION. IF THE INSTITUTION RECEIVING DONATED HIGH TECHNOLOGY PROPERTY HAS MORE THAN ONE SITE, ITS LOCATION FOR PURPOSES OF THIS PARAGRAPH (b) SHALL BE THE SITE THAT ACTUALLY RECEIVES THE DONATED PROPERTY.
(2) (a) IN ORDER TO QUALIFY FOR THE CREDIT DESCRIBED IN THIS SECTION, THE TAXPAYER SHALL BE REQUIRED TO SUBMIT, WITH THE TAXPAYER'S INCOME TAX RETURN FOR THE INCOME TAX YEAR IN WHICH THE CREDIT IS CLAIMED, AN AFFIDAVIT FROM THE EDUCATIONAL INSTITUTION, INSTITUTION OF HIGHER EDUCATION, OR PUBLIC LIBRARY ACKNOWLEDGING ACCEPTANCE OF THE HIGH TECHNOLOGY PROPERTY.
(b) IN ORDER TO ASSIST IN PROVIDING EDUCATIONAL INSTITUTIONS, INSTITUTIONS OF HIGHER EDUCATION, AND PUBLIC LIBRARIES THROUGHOUT THE STATE AN EQUAL OPPORTUNITY TO RECEIVE DONATIONS OF HIGH TECHNOLOGY PROPERTY AS DESCRIBED IN THIS SECTION, NO EDUCATIONAL INSTITUTION, INSTITUTION OF HIGHER EDUCATION, OR PUBLIC LIBRARY MAY EXECUTE AFFIDAVITS AS DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (2) IN ANY ONE CALENDAR YEAR FOR DONATIONS OF HIGH TECHNOLOGY PROPERTY IN EXCESS OF AN AGGREGATE AMOUNT OF ONE HUNDRED DOLLARS TIMES THE SERVICE POPULATION OF THE INSTITUTION OR LIBRARY.
(3) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE AN EDUCATIONAL INSTITUTION TO ACCEPT DONATIONS OF HIGH TECHNOLOGY PROPERTY THAT, IN THE SOLE DISCRETION OF THE DONEE ENTITY, WILL NOT ENHANCE THE EFFECTIVENESS OF ITS TECHNOLOGY PLAN, THAT DO NOT MEET THE MINIMUM SPECIFICATIONS SET FORTH IN ITS TECHNOLOGY PLAN, OR THAT ARE OTHERWISE DETERMINED TO BE OF INSUFFICIENT UTILITY TO THE DONEE ENTITY. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE AN INSTITUTION OF HIGHER EDUCATION OR PUBLIC LIBRARY TO ACCEPT DONATIONS OF HIGH TECHNOLOGY PROPERTY THAT, IN THE SOLE DISCRETION OF THE DONEE ENTITY, WILL BE OF INSUFFICIENT UTILITY TO THE DONEE ENTITY.
(4) (a) EXCEPT AS PROVIDED IN PARAGRAPH (b) OF THIS SUBSECTION (4), IN DETERMINING THE VALUE OF DONATED HIGH TECHNOLOGY PROPERTY:
(I) IF THE DONATED PROPERTY IS NEW, THE VALUE OF THE PROPERTY SHALL BE EITHER THE PRICE PAID BY THE TAXPAYER FOR THE PROPERTY OR, IF THE PROPERTY WAS MANUFACTURED BY THE TAXPAYER, THE COST OF MANUFACTURING THE PROPERTY; OR
(II) IF THE DONATED PROPERTY IS NOT NEW, THE VALUE OF THE PROPERTY SHALL BE THE VALUATION FOR ASSESSMENT OF THE PROPERTY AS SET FORTH ON THE MOST RECENT NOTICE OF VALUATION FOR THE PROPERTY.
(b) (I) IF THE TAXPAYER HAS CLAIMED A DEDUCTION FROM TAXABLE INCOME FOR PURPOSES OF THE TAXPAYER'S FEDERAL INCOME TAX LIABILITY FOR MAKING A DONATION OF THE HIGH TECHNOLOGY PROPERTY, THE VALUE OF THE DONATED PROPERTY FOR PURPOSES OF THIS SECTION SHALL BE THE VALUE CLAIMED ON THE TAXPAYER'S FEDERAL INCOME TAX RETURN FOR THE INCOME TAX YEAR.
(II) THE VALUE CLAIMED AS A DEDUCTION ON THE TAXPAYER'S FEDERAL INCOME TAX RETURN SHALL BE ADDED BACK TO THE TAXPAYER'S TAXABLE INCOME FOR PURPOSES OF THE TAX IMPOSED PURSUANT TO PART 3 OF THIS ARTICLE AS PROVIDED IN SECTION 3922304 (2).
(c) IF THE TAXPAYER INCLUDES A MAINTENANCE AGREEMENT AS PART OF THE DONATION OF HIGH TECHNOLOGY PROPERTY TO THE EDUCATIONAL INSTITUTION, INSTITUTION OF HIGHER EDUCATION, OR PUBLIC LIBRARY, THE COST TO THE TAXPAYER OF PROVIDING MAINTENANCE SERVICES FOR THE DONATED PROPERTY OR OF PROCURING THAT PORTION OF THE MAINTENANCE AGREEMENT ATTRIBUTABLE TO THE DONATED PROPERTY MAY BE ADDED TO THE VALUE OF THE DONATED PROPERTY.
(5) THE DEPARTMENT OF REVENUE IS AUTHORIZED TO REQUIRE ANY TAXPAYER CLAIMING THE CREDIT AUTHORIZED IN THIS SECTION TO SUBMIT SUCH ADDITIONAL INFORMATION AS THE DEPARTMENT DEEMS NECESSARY TO:
(a) VERIFY THE PRICE PAID BY THE TAXPAYER FOR THE DONATED PROPERTY, IF THE HIGH TECHNOLOGY PROPERTY WAS ACQUIRED BY THE TAXPAYER;
(b) VERIFY THE COST OF MANUFACTURING THE DONATED PROPERTY, IF THE HIGH TECHNOLOGY PROPERTY WAS MANUFACTURED BY THE TAXPAYER; AND
(c) VERIFY THE VALUATION FOR ASSESSMENT OF THE DONATED PROPERTY, IF THE HIGH TECHNOLOGY PROPERTY WAS NOT NEW WHEN DONATED.
(6) IF THE AMOUNT OF THE CREDIT ALLOWED BY THIS SECTION EXCEEDS THE TAXPAYER'S ACTUAL TAX LIABILITY FOR ANY INCOME TAX YEAR IN WHICH THE CREDIT ALLOWED PURSUANT TO THIS SECTION IS CLAIMED, SUCH EXCESS MAY BE CARRIED FORWARD AS A TAX CREDIT AGAINST SUBSEQUENT YEARS' INCOME TAX LIABILITY FOR A PERIOD NOT TO EXCEED THREE YEARS. THE CREDIT SHALL BE APPLIED FIRST TO THE EARLIEST INCOME TAX YEARS POSSIBLE.
(7) FOR PURPOSES OF THIS SECTION:
(a) "EDUCATIONAL INSTITUTION" MEANS ANY PUBLIC SCHOOL DISTRICT ORGANIZED UNDER THE LAWS OF COLORADO, EXCEPT A JUNIOR COLLEGE DISTRICT, OR ANY INDEPENDENT, PRIVATE, OR PAROCHIAL SCHOOL LOCATED IN COLORADO.
(b) "HIGH TECHNOLOGY PROPERTY" MEANS PROPERTY THAT UTILIZES RECENT ADVANCES OR IMPROVEMENTS IN TECHNICAL PROCESSES THAT INCREASE THE PRODUCTIVITY OF MACHINES AND REDUCE MANUAL OPERATIONS AND INCLUDES, BUT IS NOT LIMITED TO, COMPUTER HARDWARE AND SOFTWARE.
(c) "NEW" MEANS PROPERTY ACQUIRED OR MANUFACTURED BY THE TAXPAYER WITHIN THE ONEYEAR PERIOD IMMEDIATELY PRECEDING THE DATE OF THE DONATION AND NOT PREVIOUSLY USED BY THE TAXPAYER OR THE TAXPAYER'S PREDECESSORS IN INTEREST.
(d) "RURAL DISTRICT" MEANS A PUBLIC SCHOOL DISTRICT ORGANIZED UNDER THE LAWS OF COLORADO, EXCEPT A JUNIOR COLLEGE DISTRICT, WITH NO POPULATION CENTERS IN EXCESS OF TWO THOUSAND PERSONS AND CHARACTERIZED BY SPARSE WIDESPREAD POPULATIONS BUT DOES NOT INCLUDE SCHOOL DISTRICTS THAT CONTAIN MAJOR RECREATIONAL DEVELOPMENTS THAT IMPACT THE COST OF PROPERTY VALUES, COMMUNITY INCOME, AND OTHER COSTOFLIVING FACTORS.
(e) "SERVICE POPULATION" MEANS:
(I) IN THE CASE OF A PUBLIC SCHOOL DISTRICT ORGANIZED UNDER THE LAWS OF COLORADO, EXCEPT A JUNIOR COLLEGE DISTRICT, THE PUPIL ENROLLMENT OF THE SCHOOL DISTRICT, AS DEFINED IN SECTION 2254103 (10), C.R.S., FOR THE CALENDAR YEAR IN WHICH THE DONATED HIGH TECHNOLOGY PROPERTY IS RECEIVED;
(II) IN THE CASE OF ANY OTHER EDUCATIONAL INSTITUTION, THE NUMBER OF PUPILS ENROLLED AND SERVED ON A FULLTIME BASIS DURING THE CALENDAR YEAR IN WHICH THE DONATED HIGH TECHNOLOGY PROPERTY IS RECEIVED;
(III) IN THE CASE OF AN INSTITUTION OF HIGHER EDUCATION, THE NUMBER OF FULLTIME EQUIVALENT STUDENTS SERVED BY THE INSTITUTION FOR THE CALENDAR YEAR IN WHICH THE DONATED HIGH TECHNOLOGY PROPERTY IS RECEIVED, AS DETERMINED UNDER THE REPORTING POLICIES ADOPTED BY THE COLORADO COMMISSION ON HIGHER EDUCATION PURSUANT TO SECTION 231105 (1), C.R.S.; AND
(IV) IN THE CASE OF A PUBLIC LIBRARY, THE "REGISTRATION AS A PERCENTAGE OF POPULATION" FIGURE FOR THE LIBRARY'S SERVICE AREA FOR THE CALENDAR YEAR IN WHICH THE DONATED HIGH TECHNOLOGY PROPERTY IS RECEIVED, AS PUBLISHED BY THE STATE LIBRARY, LIBRARY RESEARCH SERVICE, IN THE PUBLICATION ENTITLED "STATISTICS AND INPUTOUTPUT MEASURES FOR COLORADO PUBLIC LIBRARIES", OR ITS SUCCESSOR PUBLICATION.
(f) "TECHNOLOGY PLAN" MEANS A PLAN ADOPTED BY AN EDUCATIONAL INSTITUTION THAT:
(I) IDENTIFIES TECHNOLOGY SKILLS REQUIRED IN THE WORKPLACE; (II) ESTABLISHES A METHOD FOR TEACHING PUPILS THOSE SKILLS; (III) INCLUDES THE MINIMUM SPECIFICATIONS OF HIGH TECHNOLOGY PROPERTY THAT IS REQUIRED BY THE EDUCATIONAL INSTITUTION TO IMPLEMENT THE TECHNOLOGY PLAN AND THAT FITS WITH THE INSTITUTION'S CURRICULUM; AND
(IV) DESCRIBES HOW THE EDUCATIONAL INSTITUTION'S CURRICULUM WOULD BE ENHANCED THROUGH THE USE OF HIGH TECHNOLOGY PROPERTY.
SECTION 2. 3922304 (2), Colorado Revised Statutes, 1994 Repl. Vol., is amended BY THE ADDITION OF A NEW PARAGRAPH to read:
3922304. Net income of corporation repeal. (2) There shall be added to federal taxable income:
(f) ANY AMOUNT DEDUCTED FROM FEDERAL TAXABLE INCOME FOR DONATIONS OF HIGH TECHNOLOGY PROPERTY TO EDUCATIONAL INSTITUTIONS, INSTITUTIONS OF HIGHER EDUCATION, OR LIBRARIES AS DESCRIBED IN SECTION 3922520 AND FOR WHICH A CREDIT AGAINST THE TAX IMPOSED PURSUANT TO THIS PART 3 IS CLAIMED.
SECTION 3. Effective date. This
act shall take effect at 12:01 a.m. on the day following the expiration
of the ninetyday period after final adjournment of the general
assembly that is allowed for submitting a referendum petition
pursuant to article V, section 1 (3) of the state constitution;
except that, if a referendum petition is filed against this act
or an item, section, or part of this act within such period, then
the act, item, section, or part, if approved by the people, shall
take effect on the date of the official declaration of the vote
thereon by proclamation of the governor.