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Conservation Easement Tax Credit Modifications By Colorado.Gov

Concerning modifications to the requirements for claiming an income tax credit for the donation of a perpetual conservation easement.

SESSION: 2021 Regular Session

SUBJECT: Fiscal Policy & Taxes

BILL SUMMARY

The bill makes the following changes affecting claims for an income tax credit allowed for the donation of a perpetual conservation easement in gross (tax credit):

  • Specifies that the division of conservation can be a holder of a conservation easement in gross;
  • Eliminates a requirement that amounts deducted for federal income tax purposes for the donation of a conservation easement be added back for purposes of calculating Colorado taxable income;
  • Modifies the definition of “taxpayer” to clarify the applicability of the tax credit to donations made by certain nonprofit and governmental entities;
  • Modifies the process for filing conservation easement tax credit certificates with income tax returns;
  • Eliminates the authority of the executive director of the department of revenue to require additional information regarding the amount and validity of tax credits and to resolve disputes regarding the credits;
  • Establishes a process for the department of revenue to track the transfer of and certify the ownership of tax credits;
  • Modifies the formula used to calculate the amount of the tax credit;
  • Modifies the manner in which the amount of a tax credit is allocated among owners, partners, members, or shareholders of certain legal entities;
  • Modifies certain provisions regarding the number of tax credits that may be claimed and the manner of claiming the credits;
  • Eliminates the requirement that the donor of an easement is the tax matters representative for purposes of resolving issues and disputes relating to a transferred credit; and
  • Eliminates obsolete reporting requirements.
    (Note: This summary applies to this bill as introduced.)