Colorado § 39-3-116 - Combination use of property - charitable, religious, and educational purposes - exemption - limitations.

§ 39-3-116. Combination use of property - charitable, religious, and educational purposes - exemption - limitations.

(1) Except as otherwise provided in this section, property, real and personal, which is used, or owned and used, as applicable, by the owner thereof or by any other person or organization solely and exclusively for any combination of the purposes specified in sections 39-3-106 to 39-3-113.5, subject to the limitations and requirements in said sections, is exempt from the levy and collection of property tax. No requirement shall be imposed that use of property that is otherwise exempt pursuant to any of said sections shall benefit the people of Colorado in order to qualify for said exemption. Property that is otherwise exempt pursuant to the provisions of this section is subject to the provisions of section 39-3-129 relating to the proportional valuation of exempt property if such property is partially leased, loaned, or otherwise made available for a portion of any calendar year to any business conducted for profit.

(2) Except as set forth in subsection (2.5) of this section, in the event that such property is used by any person or organization other than the owner:

(a) The use of the property by the owner, if any, must qualify pursuant to the provisions of this section or pursuant to any of the provisions of sections 39-3-106 to 39-3-113.5, and, in addition, the owner must qualify for an exemption pursuant to the provisions of section 39-2-117;

(b) The use of the property by the person or organization other than the owner is a use described in the provisions of this section or in any of the provisions of sections 39-3-106 to 39-3-113.5 or such person or organization is otherwise exempt from the payment of property taxes; and

(c) The amount received by the owner for the use of such property specified in sections 39-3-107 to 39-3-113.5, other than from any shareholder or member of the owner or from any person or organization controlled by an organization which also controls such shareholder or member, must not exceed one dollar per year plus an equitable portion of the reasonable expenses incurred in the operation and maintenance of the property so used. For purposes of this paragraph (c), reasonable expenses include interest expenses, depreciation, long-term maintenance expenses allowed in accordance with generally accepted accounting principles, capital expenses dedicated to refurbishing the property, and expenses incurred to allow the property to conserve energy, water, or other natural resources, but do not include any amount expended to reduce debt.

(2.5) Subsection (2) of this section does not apply to property that is used as an integral part of a child care center operated by a person or organization other than the owner of the property and that qualifies for an exemption under section 39-3-110.

(3) Any exemption claimed pursuant to the provisions of this section shall comply with the provisions of section 39-2-117.

Source: L. 89: Entire article R&RE, p. 1476, § 1, effective April 23; (2)(c) amended, p. 1486, § 3, effective June 7. L. 90: (1) amended, p. 1713, § 8, effective June 9. L. 2013: (1) and (2) amended, (HB 13-1300), ch. 316, p. 1704, § 120, effective August 7. L. 2014: (2)(c) amended, (HB 14-1074), ch. 26, p. 166, § 1, effective March 14. L. 2022: (1) and IP(2) amended and (2.5) added, (HB 22-1006), ch. 289, p. 2067, § 5, effective August 10.

Editor's note: This section is similar to former § 39-3-101 (1)(g.1) as it existed prior to 1989.

Cross references: For the legislative declaration in HB 22-1006, see section 1 of chapter 289, Session Laws of Colorado 2022.

ANNOTATION

Annotator's note. Since § 39-3-116 is similar to § 39-3-101 (1)(g.1) as it existed prior to the 1989 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.

Rule of strict construction not followed in all cases. While tax exemptions are normally subject to strict construction and limitation, this rule of strict construction is not applied with full vigor to charitable, religious, and educational exemptions. Bishop & Chapter of Cathedral of St. John the Evangelist v. Treasurer of Arapahoe County, 29 Colo. 143, 68 P. 272 (1901); Colo. Sem. v. Bd. of Comm'rs, 30 Colo. 507, 71 P. 410 (1903); Bishop & Chapter of Cathedral of St. John the Evangelist v. Treasurer of City and County of Denver, 37 Colo. 378, 86 P. 1021 (1906); Pitcher v. Miss Wolcott Sch. Ass'n, 63 Colo. 294, 165 P. 608 (1917); Horton v. Colo. Springs Masonic Bldg. Soc'y, 64 Colo. 529, 173 P. 61 (1918); Bd. of Comm'rs v. San Luis Valley Masonic Ass'n, 80 Colo. 183, 250 P. 147 (1926); Denver Turnverein v. McGlone, 91 Colo. 473, 15 P.2d 709 (1932); Kemp v. Pillar of Fire, 94 Colo. 41, 27 P.2d 1036 (1933); General Conference of Church of God—7th Day v. Carper, 192 Colo. 178, 557 P.2d 832 (1976).

Each case must be resolved on its own facts. While tax exemption statutes are generally strictly construed, each case must be resolved on the basis of its own facts, considering all its facts and circumstances and the intentions and purposes of those in charge of the institution to which the property belongs, respecting the use and occupation of such property. Bishop & Chapter of Cathedral of St. John the Evangelist v. Treasurer of City & County of Denver, 37 Colo. 378, 86 P. 1021 (1906); United Presbyterian Ass'n v. Bd. of County Comm'rs, 167 Colo. 485, 448 P.2d 967 (1968); Am. Water Works Ass'n v. Bd. of Assmt. Appeals, 38 Colo. App. 341, 563 P.2d 359 (1976).

General assembly has power to abolish tax exemptions granted. It is within the power of the general assembly to abolish tax exemptions granted to religious, charitable, and educational institutions. McGlone v. First Baptist Church, 97 Colo. 427, 50 P.2d 547 (1935).