Colorado Legislative Council Staff

STATE

REVISED FISCAL IMPACT

(replaces fiscal impact dated January 12, 1999)

TITLE:            CONCERNING A CREDIT AGAINST COLORADO INCOME TAX FOR THE TOTAL AMOUNT OF THE STATE ESTATE TAX LEVIED UPON THE SHARE OF THE GROSS ESTATE THAT IS ATTRIBUTABLE TO AGRICULTURAL ASSETS.

Summary of Legislation

            Beginning January 1, 2001, the bill would allow a credit against a resident's estate income tax liability for the total estate tax attributable to agricultural land and related activities levied on the gross estate. The credit could be carried forward for five years.

State Revenues

            The bill would allow a tax credit to an estate filing a fiduciary return which contained agricultural property in the estate. The Colorado estate tax is equal to the federal estate tax credit for states and is calculated with the federal estate tax. Little information is collected by the state to determine what type of property the estates may contain. The Department of Revenue does not know the amount of or type of property an estate may contain. In addition, the way the estate tax is calculated may limit the number of estates that would benefit from this credit due to the number of credits and alternative filings that currently exist under federal law. Finally, the high federal income tax rate on fiduciary returns and the courts' tendency to settle estates as soon as possible may limit the number and amount of income tax credits taken. The estimated impact to the General Fund would be less than $10,000 annually.

State Expenditures

            Creating an estate tax credit for agricultural land would not create additional workloads or expenditures for the Department of Revenue.

State Appropriations

            No appropriation would be required to implement this bill.

Departments Contacted

            Revenue