Colorado § 39-21-110.5 - Rate of interest to be fixed.

§ 39-21-110.5. Rate of interest to be fixed.

(1) When interest is required or permitted to be charged pursuant to this section on any underpayment, nonpayment, extension of time for payment, or overpayment, or when interest is required to be paid pursuant to section 8-20.5-104, in connection with an application for reimbursement from the petroleum storage tank fund, such interest shall be computed at the annual rate which has been established pursuant to this section.

(2) Except as otherwise provided in subsection (4) of this section, the annual rate of interest shall be the prime rate, as reported by the "Wall Street Journal", plus three points, rounded to the nearest full percent. In the event that more than one rate is so reported, the highest rate shall be utilized.

(3) The commissioner of banking shall establish an adjusted annual rate of interest based upon the computation specified in subsections (2) and (4) of this section and rounded to the nearest full percent. The adjusted annual rate of interest shall be so established by the commissioner of banking as of July 2, 1990, to become effective January 1, 1991. Thereafter, on July 1, or the next succeeding business day, of each year, the adjusted annual rate of interest shall be established in the same manner, to become effective on January 1 of the next succeeding year.

(4) For refunds issued on or after January 1, 2004, the annual rate of interest applicable to sections 39-21-110 and 39-22-622 shall be as follows:

(a) If the amount of the refund is less than five thousand dollars or if the amount of the refund is equal to or greater than five thousand dollars but less than ten percent of the taxpayer's net tax liability for the period for which the tax is paid, the annual rate of interest shall be the prime rate, as reported by the "Wall Street Journal", plus three points, rounded to the nearest full percent. In the event that more than one rate is so reported, the highest rate shall be utilized.

(b) (I) If the amount of the refund is equal to or greater than five thousand dollars and the amount of the refund is equal to or greater than ten percent of the taxpayer's net tax liability for the period for which the tax is paid, the annual rate of interest shall be the prime rate, as reported by the "Wall Street Journal", rounded to the nearest full percent, except as provided in subparagraph (II) of this paragraph (b). In the event that more than one rate is reported, the highest rate shall be utilized.

(II) For any refund subject to the provisions of subparagraph (I) of this paragraph (b), if the taxpayer demonstrates that the overpayment of tax necessitating such refund was due to good cause as determined by the executive director, the annual rate of interest shall be the prime rate, as reported by the "Wall Street Journal", plus three points, rounded to the nearest full percent. In the event that more than one rate is so reported, the highest rate shall be utilized.

Source: L. 81: Entire section added, p. 1864, § 4, effective June 8. L. 90: (2) and (3) amended, p. 1728, § 1, effective April 5. L. 95: (1) amended, p. 420, § 11, effective July 1. L. 2003: (2) and (3) amended and (4) added, p. 2360, § 1, effective August 6. L. 2024: (1) amended, (HB 24-1349), ch. 423, p. 2905, § 14, effective December 17 (see editor's note).

Editor's note: 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