State of Colorado Tax Exemption, Other Matters

Exemption basis for Colorado Tax:

Express exemption for Special District revenue bonds: Section 32-1-1101(1)(d), C.R.S.

No express exemption for Special District general obligation bonds.

Specific Ownership Tax:

The specific ownership tax is a property or ad valorem tax that is levied in addition to sales (or use) taxes on a motor vehicle and is paid annually when the vehicle is registered within a county.  See this Colorado Legislative Council Staff memorandum for more information.

Public Improvement Fees:

A public improvement fee (a “PIF”) is a privately imposed sales tax.  The fee is imposed by the owner of real property recording a covenant on the property which requires subsequent owners or tenants to impose the fee on retail sales.  PIFs arise in part because of the requirement under TABOR to vote sales tax sharing agreements that extend beyond one year.  Prior to TABOR, sales tax sharing agreements with governmental entities were typically entered into to assist in the financing of new developments – after TABOR, these tax sharing agreements require an election.  PIFs do not.

There are two types of PIFs: (1) In lieu of PIFs or credit PIFs; and (2) Add-on PIFs that are in addition to the municipal sales tax.  In connection with the in lieu of PIF, the developer asks the municipality to adopt an ordinance granting a credit against the municipal sales tax such that the consumer pays part of the total sales tax of, e.g., 4%, in the form of the actual sales tax to the municipality of 2% and in the form of the in lieu of PIF to the developer in the amount of 2%.  The add-on PIF is collected in addition to the municipal sales tax.

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