Colorado § 39-21-105 - Appeals.

§ 39-21-105. Appeals.

(1) The taxpayer may appeal the final determination of the executive director issued pursuant to section 39-21-103, 39-21-104, or 39-21-104.5 within thirty days after the mailing of such determination. Jurisdiction to hear and determine such appeals is in the district courts of this state.

(2) (a) Venue is in the district court of the county where the taxpayer resides or has his or her principal place of business. If the taxpayer has neither a residence nor a principal place of business within the state, venue is in the Denver district court.

(b) The district court shall try the case de novo, reviewing all questions of law and fact, such review being conducted in accordance with the Colorado rules of civil procedure. The taxpayer shall present his or her case in the same manner as the plaintiff in other civil actions and the normal rules of evidence shall apply. The taxpayer has the burden of proof with respect to the issues raised in the written notice described in subsection (3) of this section except as to the issue of whether the taxpayer has been guilty of fraud with intent to evade tax. The burden of proof is on the executive director of the department of revenue or his or her delegate to show that a petitioner is liable as a transferee of property of a taxpayer but not to show that the taxpayer was liable for the tax. The district court may affirm, modify, or reverse the determination of the executive director and may enter judgment on its findings.

(3) A taxpayer appeals a final determination of the executive director by filing, with the clerk of the district court of the proper county, a copy of the notice of final determination received by the taxpayer, together with a written notice stating that the taxpayer appeals to the district court and alleging the pertinent facts upon which such appeal is grounded.

(4) Within fifteen days after filing an appeal to the district court from a decision pursuant to section 39-21-104.5, the taxpayer shall file with the district court a surety bond in twice the amount of the taxes, interest, and other charges stated as due in the final determination by the executive director which are contested on appeal. The taxpayer may, at his or her option, satisfy the surety bond requirement by deposit in a savings account or deposit account held in, or purchase a certificate of deposit issued by, a state or national bank or by a state or federal savings and loan association, in accordance with the provisions of section 11-35-101 (1), C.R.S., an amount equal to twice the amount of the taxes, interest, and other charges stated as due in the final determination by the executive director.

(5) Any taxpayer may, at his or her option, deposit the disputed amount with the executive director of the department of revenue within fifteen days after filing an appeal to the district court. If such amount is so deposited, no further interest accrues on the deficiency contested during the pendency of the action. At the conclusion of the action, after appeal to the supreme court or the court of appeals or after the time for such appeal has expired, the funds deposited must be, at the direction of the court, either retained by the executive director and applied against the deficiency or returned in whole or in part to the taxpayer with interest at the rate imposed under section 39-21-110.5. The taxpayer does not need to make a claim for refund of amounts deposited with the executive director of the department of revenue in order for such amounts to be repaid in accordance with the direction of the court.

(6) Upon filing of the written notice described in subsection (3) of this section, the executive director of the department of revenue is deemed to be a party to the appeal, and the clerk of the district court shall docket the cause as a civil action. The appellant shall cause summons to be issued and cause the same to be served upon the executive director, in accordance with the manner provided by law in civil cases. Notice of the date of trial must be mailed to the taxpayer and to the executive director, at least twenty days before the date of the trial.

(7) The final decision made in an appeal of an executive director's final determination must be entered as a judgment, as in other civil cases, against the taxpayer or against the executive director as the case may be.

(8) (a) The decision of the district court is reviewable by the supreme court or the court of appeals as is otherwise provided by law; except that C.R.C.P. 62 (d) and C.R.C.P. 121 section 1-23 shall not apply. Except as provided in paragraph (b) of this subsection (8), if the taxpayer wishes to seek review of a district court ruling that is adverse to the taxpayer in part or in whole, no later than fifteen days after the ruling the taxpayer shall:

(I) File with the district court a surety bond in twice the amount of the taxes, interest, and other charges stated as due in the district court ruling, which are contested on appeal;

(II) Deposit in a savings account or deposit account held in, or purchase a certificate of deposit issued by, a state or national bank or by a state or federal savings and loan association, in accordance with the provisions of section 11-35-101 (1), C.R.S., an amount equal to twice the amount of the taxes, interest, and other charges stated in the district court ruling; or

(III) Deposit the amount stated as due in the district court ruling with the executive director.

(b) If the taxpayer has posted a bond, made a deposit, or deposited the disputed amount with the executive director as specified in subsections (4) and (5) of this section, such previous payment or posting is continued in effect and no further payment or posting may be required.

(c) Upon the taxpayer fulfilling the appeal requirements specified in paragraph (a) of this subsection (8), collection on the judgment is stayed during the pendency of the action.

(d) If the taxpayer deposits the amount stated as due in the district court ruling with the executive director as specified in subparagraph (III) of paragraph (a) of this subsection (8), no further interest shall accrue on the amount deposited during the pendency of the action. At the conclusion of the action, after appeal to the supreme court or after the time for such appeal has expired, the funds deposited must be, at the direction of the court, either retained by the executive director and applied against the deficiency or returned in whole or in part to the taxpayer with interest at the rate imposed under section 39-21-110.5. The taxpayer does not need to make a claim for refund of amounts deposited with the executive director in order for such amounts to be repaid in accordance with the direction of the court.

Source: L. 65: p. 1133, § 2. C.R.S. 1963: § 138-9-4. L. 69: p. 272, § 18. L. 81: (4) amended, p. 1863, § 1, effective June 8. L. 84: (4) amended, p. 1006, § 1, effective March 26. L. 2001: (1) amended, p. 434, § 2, effective April 20. L. 2003: (1) amended, p. 662, § 4, effective March 20. L. 2010: (1) amended, (SB 10-212), ch. 412, p. 2034, § 6, effective July 1. L. 2016: Entire section amended, (SB 16-036), ch. 292, p. 1179, § 1, effective August 10.

Cross references: For service of summons and entry of judgment in civil cases, see C.R.C.P. 4 and 58.

ANNOTATION

Required bond constitutional. The mandatory bond requirement of subsection (4) does not violate the taxpayer's constitutional right to due process. Callow v. Dept. of Rev., 197 Colo. 513, 594 P.2d 1051 (1979).

Director of revenue is vested with the full authority to determine tax liability, subject to the right of appeal to the district court, and the further right of review pursuant to the provisions of this section. Ray v. State, 123 Colo. 144, 226 P.2d 804 (1950).

Decision of director final against state. Since the tax provisions create the administrative machinery for determining tax liability, and since the only available remedy is that provided for the taxpayer, the decision of the director is final against the state, and the director's waiver of penalty and penalty interest is binding on the department. Dye Constr. Co. v. Dolan, 41 Colo. App. 293, 589 P.2d 497 (1978).

Failure to appeal within 30 days precludes judicial review. Where the taxpayer, when served with the notice of determination and assessment and demand for payment, declines to avail himself of his statutory administrative remedies, in that he fails to request a hearing before the director, offer additional evidence concerning his tax liability, post the statutory bond, or appeal to the district court from the determination of the director, the director's decision becomes final 30 days after notice thereof is mailed to the taxpayer, and it thereupon becomes no longer subject to judicial review. Liebhardt v. Dept. of Rev., 123 Colo. 369, 229 P.2d 655 (1951).

Mailing notice to the taxpayer's attorneys does not start the 30-day period, and an appeal is timely when commenced within 30 days of mailing notice to the taxpayer pursuant to § 39-21-104. Adolph Coors Co. v. Charnes, 690 P.2d 893 (Colo. App. 1984).

Subsection (2)(b) requires the trial court to try the case de novo, reviewing all questions of law and fact, such review being conducted in accordance with the Colorado rules of civil procedure. M & J Leasing v. Dir. of Dept. of Rev., 796 P.2d 28 (Colo. App. 1990).

Courts may not dispense with the bond requirement when reviewing questions of law pursuant to subsection (2)(b). For both questions of law and fact, the bond is to obtain security for the payment of taxes. Overstreet v. Dept. of Rev., 178 P.3d 1259 (Colo. App. 2007).

Trial court's reliance on facts stipulated at administrative hearing was erroneous. M & J Leasing v. Dir. of Dept. of Rev., 796 P.2d 28 (Colo. App. 1990).

Statutes requiring appeal bonds are ordinarily a valid exercise of legislative power, since they do not restrict or deny the "right" of appeal but merely regulate the manner of exercising it. Reed v. Dolan, 195 Colo. 193, 577 P.2d 284 (1978); Callow v. Dept. of Rev., 197 Colo. 513, 594 P.2d 1051 (1979).

No conflict is found between this section and § 24-4-106 (5) where none plainly appears. Dept. of Rev. v. District Court, 193 Colo. 553, 568 P.2d 1157 (1977).

This section does not expressly prohibit the entry of a stay as authorized by § 24-4-106 (5). Dept. of Rev. v. District Court, 193 Colo. 553, 568 P.2d 1157 (1977).

Trial court had jurisdiction as a matter of law to waive bond requirement for indigent taxpayer and proceed to adjudicate merits of appeal concerning use tax deficiency where undisputed evidence in affidavit form was proffered to the trial court reciting tax payer's inability to post bond or make deposit required by statute. AF Prop. v. Dept. of Rev., 852 P.2d 1267 (Colo. App. 1992).

Subsection (4) does not authorize a taxpayer to toll the statutory period for obtaining a surety bond by filing a motion to waive the surety bond requirement and then filing a motion to reconsider. Overstreet v. Dept. of Rev., 178 P.3d 1259 (Colo. App. 2007).

This section does not prohibit a trial court from tolling post-judgment interest earlier than at the conclusion of the action. In fact, the statute is silent concerning early satisfaction of a judgment. Subsection (4)(b) simply mandates that the judgment shall be paid, at the very latest, at the conclusion of the action. It does not state that the conclusion of the action is the only time when the judgment may be satisfied. Coors Brewing Co. v. City of Golden, 2013 COA 92, 411 P.3d 767.

Where partnership is assessed for use taxes and incurs liability owing to its failure to protest liability, taxpayer, as general partner of a limited partnership, is jointly and severally liable therefor. AF Prop. v. Dept. of Rev., 852 P.2d 1267 (Colo. App. 1992).

When issue of material fact existed as to whether general partnership had been assessed with a use tax, trial court erred in entering motion for summary judgment in favor of individual partner on grounds that partner could not be held jointly and severally liable for deficiency owed by partnership. AF Prop. v. Dept. of Rev., 852 P.2d 1267 (Colo. App. 1992).

Applied in B.P.O.E. Lodge No. 804 v. Dept. of Rev., 41 Colo. App. 88, 582 P.2d 1068 (1978); Dye Constr. Co. v. Dolan, 41 Colo. App. 293, 589 P.2d 497 (1978); Kraftco Corp. v. Charnes, 636 P.2d 1300 (Colo. App. 1981); Sky Chefs v. City & County of Denver, 653 P.2d 402 (Colo. 1982); Overstreet v. Dept. of Rev., 178 P.3d 1259 (Colo. App. 2007); Am. Multi-Cinema v. City of Aurora, 2020 COA 4, 471 P.3d 1139.