Colorado Legislative Council Staff



(replaces fiscal impact dated April 17, 1999)

Drafting Number:

Prime Sponsor(s):

LLS 99-0719

Rep. Spradley

Sen. Owen


Bill Status:

Fiscal Analyst:

April 22, 1999

Senate 2nd Reading

Harry Zeid (303-866-4753)



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

General Fund



State Expenditures

General Fund



FTE Position Change

0.7 FTE

0.7 FTE

Other State Impact: None

Effective Date: Upon signature of the Governor

Appropriation Summary for FY 1999-2000: $204,648 and 0.7 FTE - General Fund to the Department of Revenue

Local Government Impact: None

Summary of Legislation

            This bill, as amended in the Senate Appropriations Committee, establishes a credit for qualified taxpayers against state taxes to refund state revenues that exceed the limitation on state fiscal year spending imposed by Section 20 of Article X of the State Constitution (the TABOR Amendment) that the voters statewide either have not authorized the state to retain, all or a portion of the excess revenues for that fiscal year. A qualified taxpayer would include any natural person, C corporation, partnership, limited liability company that is not a C corporation, or S corporation that: (1) is domiciled or does business in the state for the entire fiscal year; (2) owns personal property in the state that is not otherwise exempt from the levy and collection of personal property tax; and (3) paid personal property tax on the property during the fiscal year for which the credit against state taxes is allowed.

            The amount of the credit allowed by the bill for each qualified taxpayer during the state fiscal year immediately preceding the year in which the credit is claimed would be:

               the lesser of $500 or the aggregate amount of personal property tax paid by the taxpayer to all taxing jurisdictions in the state; plus


               13.37 percent of the aggregate amount of personal property tax paid by the taxpayer that is in excess of $500.


            Applicants for the credit must make a timely filing on a form prescribed by the Department of Revenue and include proof of payment of the aggregate personal property taxes paid no later than August 31 of the state fiscal year in which the credit against state taxes is allowed. The Department of Revenue would refund the credit against state tax using moneys in the reserve established pursuant to Section 39-22-622, C.R.S. The credit would apply only if the June revenue estimate prepared by the staff of the Legislative Council indicates that the aggregate amount of state revenues will exceed the TABOR limitation on state fiscal year spending for that fiscal year by $125 million. If the revenue limitation exceeds this amount, this credit will take priority over any other mechanism to refund excess state revenues.

            The bill will affect state General Fund revenues beginning in FY 1999-00, and will also require a General Fund expenditure. Therefore, the bill is assessed as having state fiscal impact.

State Revenues

            This bill establishes a credit against state taxes paid for qualified taxpayers for fiscal years commencing on or after July 1, 1998. The credit is designed to refund approximately $100 million in FY 1999-00 to qualified taxpayers that pay personal property tax. The refund would grow to approximately $103.5 million in FY 2000-01. In order to accomplish this goal, the bill establishes the credit as the lesser of $500 or the aggregate amount of personal property tax paid by the taxpayer to all taxing jurisdictions in the state, plus 13.37 percent of the aggregate amount of personal property tax paid by the taxpayer that is in excess of $500.

            It is estimated that approximately 120,000 taxpayers will qualify for the credit annually. This includes individuals, C corporations, partnerships, limited liability companies, and S corporations. Taxpayers currently file a schedule that lists personal property with the county assessor's office. Companies that have multiple locations file multiple schedules. No statewide database currently exists that shows the assessed value or property taxes paid on personal property by company. Based on a sample of schedules filed in 1997, it is known that 70 percent of all schedules listed personal property with an actual value of less than $25,000. This translates to average property taxes paid of approximately $570. It is estimated that for FY 1999-00, approximately $34.5 million will be refunded to companies based on the first $500 paid by each company in personal property taxes. In addition to the value of the credit on the first $500 in taxes paid, the bill will refund approximately $65.5 million to taxpayers that had a personal property tax liability in excess of $500. This is based on a credit equal to 13.37 percent of personal property taxes paid in excess of the $500 threshold.

State Expenditures

            The Department of Revenue would administer the credit against state tax program, and be responsible for its implementation. It is assumed that approximately 120,000 taxpayers will qualify for, and will apply for the credit against state taxes.

            Table 1. summarizes the administrative expenses for the Department of Revenue for FY 1999-00 and 2000-01.

Table 1. Summary of Department of Revenue

Administrative Expenses for FY 1999-00 and FY 2000-01

Expenditure Category

FY 1999-00

FY 2000-01

Personal Services

  Field Audit Section* (0.7 FTE)

  Contract Programming

      Personal Services Subtotal (0.7 FTE)







Operating Expenses

  Mailing Rebate Forms




       Operating Expenses Subtotal











Other Expenses

  Pueblo Data Entry

  Capital Outlay

     Other Expenses Subtotal










               *Includes PERA at 11.4% and Medicare at 1.45% of salary.

Expenditures Not Included

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:


               health and life insurance costs;

               short-term disability costs;

               inflationary cost factors;

               leased space; and

               indirect costs.

State Appropriations

            The fiscal note implies that the Department of Revenue would require an additional General Fund appropriation in the amount of $204,648 and 0.7 FTE in FY 1999-00 to implement the provisions of the bill.

Departments Contacted

            Revenue          Local Affairs              Legislative Council Staff