Colorado § 39-21-109 - Interest on underpayment, nonpayment, or extensions of time for payment of tax.

§ 39-21-109. Interest on underpayment, nonpayment, or extensions of time for payment of tax.

(1) If any tax or charge administered pursuant to this article 21 is not paid on or before the last date prescribed for payment, interest on such amount at the rate imposed under section 39-21-110.5, except as provided in subsection (1.5) of this section, shall be paid for the period from such last date to the date paid. The last date prescribed for payment shall be determined without regard to any extension of time for payment and shall be determined without regard to any notice and demand for payment issued, by reason of jeopardy, prior to the last date otherwise prescribed for such payment. In the case of a tax in which the last date for payment is not otherwise prescribed, the last date for payment shall be deemed to be the date the liability for the tax arises, and in no event shall it be later than the date notice and demand for the tax is made by the executive director of the department of revenue or the executive director's delegate.

(1.5) If payment of or an agreement to pay the amount of any tax described in subsection (1) of this section is made within thirty days of notice of underpayment, nonpayment, or extension of time, the executive director shall waive the imposition of the three points in excess of the prime rate described in section 39-21-110.5 (2) on such amount unless the executive director determines that there has been a willful neglect or failure to pay such tax.

(2) Interest prescribed under this section shall be paid upon notice and demand and shall be assessed, collected, and paid in the same manner as the tax to which it is applicable.

(3) If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under this section on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowed with respect to such overpayment.

(4) Interest prescribed under this section on any tax may be assessed and collected at any time during the period within which the tax to which such interest relates may be assessed and collected.

(5) This section shall not apply to any failure to pay estimated Colorado income tax.

Source: L. 65: p. 1138, § 2. C.R.S. 1963: § 138-9-8. L. 73: p. 1418, § 103. L. 77: (1) amended, pp. 1768, 1854, §§ 6, 8, effective January 1, 1978. L. 79: (1) amended, p. 1500, § 24, effective January 1, 1980. L. 81: (1) amended, p. 1863, § 2, effective June 8. L. 86: (1) amended, p. 1111, § 7, effective July 1. L. 89: (1) amended, p. 1595, § 9, effective July 1, 1993. L. 90: (1) amended and (1.5) added, p. 1728, § 2, effective April 5; (1) amended, p. 1723, § 9, effective May 1; (1) amended, pp. 1729, 1724, §§ 3, 10, effective July 1, 1993. L. 2024: (1) amended, (HB 24-1349), ch. 423, p. 2904, § 12, effective December 17 (see editor's note).

Editor's note: (1) Amendments to subsection (1) by Senate Bill 77-144 and House Bill 77-1076 were harmonized.

(2) Amendments to subsection (1) by House Bill 90-1176 and House Bill 90-1258 were harmonized.

(3) Section 19(1) of chapter 423 (HB 24-1349), Session Laws of Colorado 2024, provides that the act changing this section takes effect on the date of the official declaration of the vote thereon by the governor only if, at the November 2024 statewide election, a majority of voters approve the ballot issue referred in accordance with § 39-37-201. The ballot issue, referred to the voters as Proposition KK, was approved on November 5, 2024, and was proclaimed by the Governor on December 17, 2024, see L. 2025, p. 3636. The vote count for the measure was as follows:

FOR: 1,675,123

AGAINST: 1,406,112

ANNOTATION

Law reviews. For article, "Collecting Pre- and Post-Judgment Interest in Colorado: A Primer", see 15 Colo. Law. 753 (1986). For article, "An Update of Appendices from Collecting Pre- and Post-Judgment Interest in Colorado", see 15 Colo. Law. 990 (1986).

Revocation of permission to remit sales tax on a cash receipt basis is not a notice of deficiency, and assessment of tax does not on its own create a tax liability. Montgomery Ward & Co. v. Dept. of Rev., 675 P.2d 318 (Colo. App. 1983).

A determination that sales tax on credit sales should be remitted on a "sales" or accrual basis, rather than on a cash receipt basis, is not a notice of deficiency creating liability under this section. Montgomery Ward & Co. v. Dept. of Rev., 675 P.2d 318 (Colo. App. 1983).

Applied in Western Elec. Co. v. Weed Jr., 185 Colo. 340, 524 P.2d 1369 (1974); Dye Constr. Co. v. Dolan, 41 Colo. App. 293, 589 P.2d 497 (1978).