Colorado § 24-36-503 - Corporate tax credits - purchase - authorization to issue - terms - report.

§ 24-36-503. Corporate tax credits - purchase - authorization to issue - terms - report.

(1) A qualified taxpayer may purchase income tax credits from the department in accordance with this section and may apply the tax credits against its income tax liability in accordance with section 24-36-504.

(2) (a) (I) The department is authorized to issue tax credit certificates to qualified taxpayers pursuant to this part 5 and part 4 of this article 36 equal to the lesser of a total face value of up to one hundred twenty-five million dollars or total sales proceeds of up to one hundred million dollars, plus any reasonable and necessary administrative, monitoring, and closing costs.

(II) (A) In addition to the tax credit certificates authorized in subsection (2)(a)(I) of this section, the department is authorized to issue tax credit certificates to qualified taxpayers pursuant to this part 5 and part 4 of this article 36 equal to the lesser of a total face value of up to one hundred twenty-five million dollars or total sale proceeds of up to one hundred million dollars plus any reasonable and necessary administrative, monitoring, and closing costs.

(B) This subsection (2)(a)(II) takes effect on January 1, 2026, only if the condition specified in section 10-16-1209 (1) occurs.

(b) The department may contract with an independent third party to conduct or consult on a bidding process among qualified taxpayers to purchase the tax credits.

(c) The department shall consult with C corporations in advance of issuing any tax credits in accordance with this section.

(3) A C corporation authorized to do business in Colorado seeking to purchase tax credits must apply to the department in the manner prescribed by the department.

(4) Using procedures adopted by the department or, if applicable, by an independent third party, each C corporation that submits an application shall make a timely and irrevocable offer, contingent only on the department's issuance to the C corporation of the tax credit certificates, to make a specified purchase payment amount to the department on dates specified by the department, which must not burden any single tax year. The offer must include:

(a) The requested amount of tax credits, which must not be less than any minimum amount established in procedures by the department or, if applicable, the independent third party;

(b) The qualified taxpayer's proposed tax credit purchase amount for each tax credit dollar requested. The minimum proposed tax credit purchase amount must be the greater of either:

(I) The percentage of the requested dollar amount of tax credits that the department and, if applicable, the independent third party determines to be consistent with market conditions as of the offer date; or

(II) Eighty percent of the requested dollar amount of tax credits; and

(c) Any other information the department or, if applicable, the independent third party requires.

(5) The department shall provide written notice to each C corporation that submits an application indicating whether the C corporation has been approved as a purchaser of tax credits and, if so, the amount of tax credits allocated and the date by which payment of the tax credit sale proceeds must be made.

(6) On receipt of payment of the sale proceeds, the department shall issue to each qualified taxpayer a tax credit certificate. The tax credit certificate must state:

(a) The total amount of income tax credits that the qualified taxpayer may claim;

(b) The amount that the qualified taxpayer has paid for the issuance of the tax credit certificates and the date of the payment;

(c) The dates on which the tax credits will be available for use by the qualified taxpayer;

(d) Any penalties or other remedies for noncompliance;

(e) The procedures to be used for transferring or assuming the tax credits in accordance with subsection (7)(e) of this section;

(f) The serial number of the tax credit certificate; and

(g) Any other requirements deemed necessary by the department as a condition of issuing the tax credit certificate.

(7) (a) The department shall not issue a tax credit certificate to any qualified taxpayer that fails to provide the tax credit sale proceeds within the time the department specifies.

(b) A qualified taxpayer that fails to provide the tax credit sale proceeds within the time the department specifies is subject to a penalty equal to ten percent of the amount of the purchase price that remains unpaid. The penalty must be paid to the department within thirty days after demand.

(c) The department may offer to reallocate the defaulted tax credits among other qualified taxpayers so that the result after reallocation is the same as if the initial allocation had been performed without considering the tax credit allocation to the defaulting qualified taxpayer.

(d) If the reallocation of tax credits under subsection (7)(c) of this section results in the payment by another qualified taxpayer of the amount of tax credit sale proceeds not paid by the defaulting qualified taxpayer, the department may waive the penalty imposed under subsection (7)(b) of this section.

(e) A qualified taxpayer that fails to pay the tax credit sale proceeds within the time specified may avoid the imposition of the penalty by transferring the allocation of tax credits to a new or existing qualified taxpayer within thirty days after the due date of the defaulted installment. Any transferee of an allocation of tax credits of a defaulting qualified taxpayer under this subsection (7) shall agree to pay the tax credit sale proceeds within five days after the date of the transfer.

(8) The tax credit sale proceeds provided by a qualified taxpayer in return for a tax credit certificate must be deposited as specified in section 24-36-406.

(9) (a) The department shall provide, within thirty days after the close of the fiscal year, a data file to the department of revenue for each fiscal year in which it issues tax credit certificates pursuant to this part 5. The data file must include:

(I) The name and federal employer identification number of each qualified taxpayer to which the department issued a tax credit certificate;

(II) The total amount of the tax credit allocated to the qualified taxpayer; and

(III) The serial number of the tax credit certificate issued to the qualified taxpayer.

(b) The department shall maintain records of each tax credit certificate issued, transferred, or assumed that are sufficient to allow the department of revenue to verify the issuance and ownership of the credit. The department shall provide the records to the office of the state auditor upon request so that the state auditor can evaluate the effectiveness of the tax credits in accordance with sections 24-36-501 (2)(b) and 39-21-305.

(10) The department may pay an independent third party and any consultants reasonable and necessary administrative, monitoring, and closing costs using the proceeds from the sale of tax credits.

Source: L. 2025, 1st Ex. Sess.: Entire part added, (HB 25B-1004), ch. 8, p. 33, § 2, effective August 28; (2)(a) and (8) amended, (HB 25B-1006), ch. 10, p. 51, § 12, effective August 29 (see editor's note).

Editor's note: (1) Section 17(2) of chapter 10 (HB 25B-1006), Session Laws of Colorado 2025, First Extraordinary Session, provides that the act changing subsections (2)(a) and (8) takes effect only if HB 25B-1004 becomes law and takes effect one day after the effective date of HB 25B-1004. HB 25B-1004 became law and took effect August 28, 2025.

(2) Subsection (2)(a)(II)(B) provides that subsection (2)(a)(II) is effective if, by December 31, 2025, the United States congress does not enact and the president does not sign federal legislation that extends, recreates, or otherwise reinstates the enhanced premium tax credit for the 2026 plan year. The commissioner of insurance notified the revisor of statutes in writing on June 8, 2026, that the condition specified occurred. As a result, subsection (2)(a)(II) became effective on January 1, 2026. For more information, see HB 25B-1006 (L. 2025, 1st Ex. Sess., p. 45).