BY REPRESENTATIVES Spradley, C. Berry, George, Hefley, Lawrence, Pfiffner, and Young;
also SENATORS Dennis, Ament, Bishop, Chlouber, Feeley,
Matsunaka, Norton, Rizzuto, and Tebedo.
CONCERNING THE STATE ESTATE TAX.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. 3923.5102 (5.5)
and (13.6), Colorado Revised Statutes, are amended to read:
3923.5102. Definitions.
As used in this article, unless the context otherwise requires:
(5.5) "Federal additional estate
tax return" means the
ANY federal estate tax return with
respect to DESIGNATED FOR REPORTING
THE recapture of estate tax under section 2032A of the internal
revenue code, THE ADDITIONAL ESTATE TAX IMPOSED FOR FAILURE TO
MATERIALLY PARTICIPATE IN A BUSINESS, DISPOSITIONS OF INTERESTS,
OR OTHER NONCOMPLIANCE UNDER SECTION 2033A OF THE INTERNAL REVENUE
CODE, AND THE ADDITIONAL ESTATE TAX IMPOSED FOR FAILURE TO IMPLEMENT
THE AGREEMENT UNDER SECTION 2031 OF THE INTERNAL REVENUE CODE.
(13.6) "Qualified heir" means
a qualified heir as defined in section 2032A (e)(1) of the internal
revenue code OR AS DEFINED IN SECTION 2033A (i)(1) OF THE
INTERNAL REVENUE CODE IF THE FAMILYOWNED BUSINESS EXCLUSION
PROVISIONS OF THE INTERNAL REVENUE CODE ARE APPLICABLE.
SECTION 2. 3923.5107,
Colorado Revised Statutes, is amended BY THE ADDITION OF THE FOLLOWING
NEW SUBSECTIONS to read:
3923.5107. Tax returns
date to be filed extension.
(8) ANY PERSON WHO MAKES A FAMILYOWNED BUSINESS
EXCLUSION ELECTION IN A FEDERAL RETURN AND WHO IS REQUIRED TO
FILE A FEDERAL ADDITIONAL ESTATE TAX RETURN AS A RESULT OF FAILURE
TO MATERIALLY PARTICIPATE IN THE BUSINESS, DISPOSITION OF INTEREST,
OR OTHER NONCOMPLIANCE WITH THE REQUIREMENTS OF SECTION 2033A
OF THE INTERNAL REVENUE CODE SHALL FILE WITH THE DEPARTMENT ON
OR BEFORE THE DATE THE FEDERAL ADDITIONAL ESTATE TAX RETURN IS
REQUIRED TO BE FILED:
(a) A COLORADO RETURN FOR THE ESTATE TAX
DUE UNDER THIS ARTICLE; AND
(b) A TRUE AND CORRECT COPY OF THE FEDERAL
ADDITIONAL ESTATE TAX RETURN.
(9) ANY PERSON WHO ELECTS A QUALIFIED
CONSERVATION EASEMENT EXCLUSION IN A FEDERAL RETURN AS ALLOWED
UNDER SECTION 2031 OF THE INTERNAL REVENUE CODE AND WHO IS REQUIRED
TO FILE A FEDERAL ADDITIONAL ESTATE TAX RETURN AS A RESULT OF
FAILURE TO IMPLEMENT THE AGREEMENT DESCRIBED IN SECTION 2031 OF
THE INTERNAL REVENUE CODE SHALL FILE WITH THE DEPARTMENT ON OR
BEFORE THE DATE THE FEDERAL ADDITIONAL ESTATE TAX RETURN IS REQUIRED
TO BE FILED:
(a) A COLORADO RETURN FOR THE ESTATE TAX
DUE UNDER THIS ARTICLE; AND
(b) A TRUE AND CORRECT COPY OF THE FEDERAL
ADDITIONAL ESTATE TAX RETURN.
SECTION 3. 3923.5109 (2),
Colorado Revised Statutes, is amended, and the said 3923.5109
is further amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS,
to read:
3923.5109. Interest.
(2) If a special use valuation election was made in
a federal return and thereafter ADDITIONAL Colorado additional
estate tax is due as a result of a premature disposition of property
or premature cessation of the qualified use, interest shall accrue
from the due date of the federal additional estate tax return
regardless of any federal extension of time for payment.
(3) IF A QUALIFIED FAMILYOWNED BUSINESS
EXCLUSION ELECTION WAS MADE IN A FEDERAL RETURN AND THEREAFTER
ADDITIONAL COLORADO ESTATE TAX IS DUE AS A RESULT OF FAILURE TO
MATERIALLY PARTICIPATE IN THE BUSINESS, DISPOSITION OF INTERESTS,
OR OTHER NONCOMPLIANCE WITH THE REQUIREMENTS OF SECTION 2033A
OF THE INTERNAL REVENUE CODE, INTEREST SHALL ACCRUE FROM THE DUE
DATE OF THE FEDERAL ADDITIONAL ESTATE TAX RETURN REGARDLESS OF
ANY FEDERAL EXTENSION OF TIME FOR PAYMENT.
(4) IF A QUALIFIED CONSERVATION EASEMENT
ELECTION WAS MADE ON A FEDERAL RETURN AND THEREAFTER ADDITIONAL
COLORADO ESTATE TAX IS DUE AS A RESULT OF ANY FAILURE TO IMPLEMENT
THE AGREEMENT DESCRIBED IN SECTION 2031 OF THE INTERNAL REVENUE
CODE, INTEREST SHALL ACCRUE FROM THE DUE DATE OF THE FEDERAL ADDITIONAL
ESTATE TAX RETURN REGARDLESS OF ANY FEDERAL EXTENSION OF TIME
FOR PAYMENT.
SECTION 4. Effective
date applicability. This act shall take
effect July 1, 1998 and shall apply to estates of decedents who
die on or after January 1, 1998.
SECTION 5.
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.
____________________________ ____________________________
Charles E. Berry Tom Norton
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Judith M. Rodrigue Patricia K. Dicks
CHIEF CLERK OF THE HOUSE ASSISTANT SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE
OF COLORADO