Colorado § 39-22-301 - Corporate tax imposed - repeal.

§ 39-22-301. Corporate tax imposed - repeal.

(1) (a) to (c) Repealed.

(d) (I) A tax is imposed upon each domestic C corporation, foreign C corporation, and combined group, as defined in section 39-22-303 (12)(a.3), doing business in Colorado annually in an amount of the net income of such C corporation during the year derived from sources within Colorado as set forth in the following schedule of rates:

(A) to (I) Repealed.

(J) Except as otherwise provided in section 39-22-627, for income tax years commencing on or after January 1, 2020, but before January 1, 2022, four and fifty-five one-hundredths percent of the Colorado net income. This subsection (1)(d)(I)(J) is repealed, effective December 31, 2026.

(K) Except as otherwise provided in section 39-22-627, for income tax years commencing on or after January 1, 2022, four and forty one-hundredths percent of the Colorado net income.

(II) For purposes of this paragraph (d), income from sources within Colorado shall be determined in accordance with the provisions of this part 3 and includes income from tangible or intangible property located or having a situs in this state and income from any activities carried on in this state, regardless of whether carried on in intrastate, interstate, or foreign commerce. In the case of a C corporation which is a component member of a controlled group of corporations as defined in section 1563 (a) of the internal revenue code, the sum of the Colorado net incomes of all the component members of the controlled group, but not the losses of each component member thereof, shall be used in computing the tax bracket for the controlled group. The tax bracket for the controlled group may be allocated between or among the component members thereof as agreed to by such members. If such an agreement is not reached, the executive director shall allocate the tax bracket based on the ratio of the Colorado net income of each component member to the total Colorado net incomes of all component members.

(1.1) to (2) Repealed.

(3) (a) As used in this section:

(I) "Charitable organization" means a charitable organization exempt from federal income taxation under the provisions of the internal revenue code.

(II) "Crop" means an agricultural crop, including but not limited to grains, fruits, and vegetables, which is usable as food for human beings.

(III) "Crop contribution" means a contribution of a crop or portion of a crop to a charitable organization by a taxpayer engaged in the trade or business of farming or processing of a crop.

(IV) "Livestock" means cattle, swine, poultry, or other animals raised for profit and usable as food for human beings.

(V) "Livestock contribution" means a contribution of livestock to a charitable organization by a taxpayer engaged in the trade or business of raising or processing of livestock.

(VI) "Most recent sale price" means an amount equal to the price which the taxpayer would have received for the crop or livestock contributed, determined as if the crop or livestock had been sold on the date of the most recent sale of such a crop or livestock and at the same price per unit as the crop or livestock which was sold on that date.

(VII) "Wholesale market price" means the average wholesale market price for the crop or livestock contributed in the nearest regional market during the month in which the contribution is made, determined without consideration of grade or quality of the crop or livestock and as if the quantity of the crop or livestock contributed were marketable.

(b) For income tax years commencing prior to January 1, 2023, there shall be allowed to taxpayers, as a credit with respect to the income taxes imposed by this part 3, an amount equal to twenty-five percent of the wholesale market price or twenty-five percent of the most recent sale price of crop contributions or livestock contributions, or both, made to a tax-exempt charitable organization. Credit, as provided for in this subsection (3), may not exceed one thousand dollars per tax year.

(c) Unused portions of such credit may be carried forward to subsequent tax years as credit against income taxes due for those years. However, such credit must be used within five years of the end of the tax year in which the contribution was made.

(d) The credit under this section is available only if the following conditions are met:

(I) The crop is harvested or the livestock is slaughtered by or on behalf of the donee charitable organization;

(II) The use of the crop or livestock by the donee charitable organization is related to the purpose or function constituting the basis for the organization's tax-exempt status;

(III) The crop or livestock is not transferred by the donee charitable organization in exchange for money, other property, or services. This condition shall not apply in those cases where the donee charitable organization functions as a clearinghouse for distribution, without expectation of remuneration, of such crops or livestock, or both, to other charitable organizations. These secondary donees shall be subject to the provisions of this section in the same measure as if the contribution were received by that tax-exempt charitable organization directly from the original donor.

(IV) The taxpayer and any subsequent donors shall receive from the donee charitable organization a written statement declaring that its use and disposition of the crop or livestock will be in accordance with this section;

(V) No taxpayer who donates items of food to a tax-exempt charitable organization for use or distribution in providing assistance shall be liable for damages in any civil action or subject to prosecution in any criminal proceeding resulting from the nature, age, condition, or packaging of such crop contributions or livestock contributions, or both. However, the exemption shall not apply to the willful, wanton, or reckless acts of donors which result in injury to the recipients of such contributed foods.

(e) This subsection (3) is repealed, effective July 1, 2029.

Source: L. 64: R&RE, p. 768, § 1. C.R.S. 1963: § 138-1-35. L. 69: p. 1129, § 2. L. 81: (1) amended, (1.1), (1.2), (1.3), (1.4), and (1.5) added, p. 1872, § 9, effective June 29. L. 82: (3) added, p. 564, § 2, effective April 22. L. 83: (1) and (1.1) to (1.5) amended, p. 1516, § 2, effective March 22; (1) and (1.3) to (1.5) amended, p. 2096, § 3, effective October 13. L. 85: (1) and (1.3) to (1.5) amended, p. 1265, § 3, effective May 30. L. 86: (1) amended, (1.3) and (1.4) R&RE, and (1.5) repealed, pp. 1117, 1118, 1120, §§ 14, 15, 22, effective July 1. L. 86, 2nd Ex. Sess.: (1.3) and (1.4) amended, p. 73, § 1, effective August 15. L. 87: (1)(b) and (1)(c) amended, (1)(d) and (3) R&RE, and (1.4) repealed, pp. 1438, 1439, 1457, §§ 7, 8, 31, effective June 22; (1)(d)(I)(A) amended, p. 1590, § 70, effective July 10. L. 89: (1)(d)(II) amended, p. 1499, § 1, effective July 1, 1990. L. 92: (1)(a) to (1)(c), IP(1)(d)(I), and (1)(d)(II) amended, p. 2266, § 7, effective April 16. L. 99: (1)(d)(I)(G) amended and (1)(d)(I)(H) added, p. 1376, § 2, effective August 4. L. 2000: (1)(d)(I)(H) amended and (1)(d)(I)(I) added, p. 1414, § 3, effective August 2. L. 2005: (1)(d)(I)(I) amended, p. 1361, § 2, effective June 6. Initiated 2020: (1)(d)(I)(I) amended and (1)(d)(I)(J) added, Proposition 116, effective upon proclamation of the Governor, effective December 31, 2020. L. 2022: (2) and (3)(b) amended and (3)(e) added, (HB 22-1025), ch. 145, p. 945, § 4, effective August 10. Initiated 2022: (1)(d)(I)(J) amended and (1)(d)(I)(K) added, Proposition 121, effective upon proclamation of the Governor, December 27, 2022. L. 2024: (1)(a), (1)(b), (1)(c), (1)(d)(I)(A) to (1)(d)(I)(I), (1.1), (1.2), and (1.3) repealed and IP(1)(d)(I) and (1)(d)(I)(J) amended, (HB 24-1134), ch. 172, p. 933, § 4, effective August 7.

Editor's note: (1) Subsection (2) of this section implements the requirements of Article III, Section 2, of the Multistate Tax Compact, § 24-60-1301.

(2) Subsections (1)(d)(I)(I) and (1)(d)(I)(J) were amended by initiative in 2020. The vote count on Proposition 116 at the general election held November 3, 2020, was as follows:

FOR: 1,821,702

AGAINST: 1,327,025

(3) Subsection (1)(d)(I)(J) was amended and (1)(d)(I)(K) was added by initiative in 2022. The vote count on Proposition 121 at the general election held November 8, 2022, was as follows:

FOR: 1,581,163

AGAINST: 842,506

(4) Subsection (2)(b) provided for the repeal of subsection (2), effective July 1, 2025. (See L. 2022, p. 945.)

ANNOTATION

Law reviews. For comment on Arvey Corp. v. Fugate appearing below, see 31 Dicta 400 (1954). For note, "Colorado Taxation of Foreign Corporate Income", see 35 U. Colo. L. Rev. 354 (1963). For note, "Doing Business in Colorado for Foreign Corporations: Service of Process, Qualification, Taxation", see 49 Den. L.J. 529 (1973). For article, "Colorado's Income Tax as Applied to Foreign Holding Companies", see 23 Colo. Law. 1107 (1994).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

Corporate income tax constitutional. A state which provides an orderly market in which to transact business confers benefits which constitutionally justify the levy of a corporate income tax. GMC v. State, 181 Colo. 360, 509 P.2d 1260 (1973).

General assembly has sought to tax all income that Colorado can constitutionally tax. Coors Porcelain Co. v. State, 183 Colo. 325, 517 P.2d 838 (1973).

The expression "income from sources within [Colorado]" is broad and all-inclusive. Arvey Corp. v. Fugate, 129 Colo. 595, 272 P.2d 652 (1954).

Compensation for damages or injuries cannot be classified as "income" for the purposes of taxation. Arvey Corp. v. Fugate, 129 Colo. 595, 272 P.2d 652 (1954).

Business situs of intangibles separate and distinct from domicile. In the matter of assessment as applied in income taxation, there appears to be a business situs of intangibles which may be separate and distinct from the domicile of the owner. Arvey Corp. v. Fugate, 129 Colo. 595, 272 P.2d 652 (1954).

Both manufacture of product and its ultimate sale contribute to a corporation's income for state income tax purposes. GMC v. State, 181 Colo. 360, 509 P.2d 1260 (1973).

Gross income from sales of goods shipped into state not taxable. Gross income derived from sales of goods made from factories or branches outside of the state and shipped on orders solicited in the state to customers here by common carrier f.o.b. the point of delivery is not taxable. State ex rel. Cruse v. Am. Can Co., 117 Colo. 312, 186 P.2d 779 (1947) (decided under former law).

Sales made by out-of-state corporate representatives soliciting orders. A state can tax the income of a domestic corporation derived from sales made in other states by corporate representatives soliciting orders in the other states. Coors Porcelain Co. v. State, 183 Colo. 325, 517 P.2d 838 (1973).

Net income from foreign corporation's interstate operations taxable. The net income from the exclusively interstate operations of a foreign corporation may be subjected to state taxation, provided the levy is not discriminatory and is properly apportioned to local activities. GMC v. State, 181 Colo. 360, 509 P.2d 1260 (1973).

Presumption that percentage allocation for foreign corporation fair. Where a statutory formula for the taxation of a foreign corporation is not intrinsically invalid, there is a strong presumption that the percentage allocation is fair. GMC v. State, 181 Colo. 360, 509 P.2d 1260 (1973).

Fairness is not equated with absolute precision. GMC v. State, 181 Colo. 360, 509 P.2d 1260 (1973).

Difference of nine-tenths percent too small to be unconstitutional. A difference of nine-tenths percent between the computation of a railroad and that of the director of revenue concerning the allocation of apportionable income to Colorado is too small to constitute an unlawful burden upon interstate commerce, a violation of due process, or a violation of equal protection. Union P.R.R. v. Heckers, 181 Colo. 374, 509 P.2d 1255 (1973).

Direct deduction of ad valorem taxes from net income is not required. Union P.R.R. v. Heckers, 181 Colo. 374, 509 P.2d 1255 (1973).

Applied in In re Golden State Bank v. Dolan, 37 Colo. App. 29, 543 P.2d 1307 (1975); Miller Int'l, Inc. v. State Dept. of Rev., 646 P.2d 341 (Colo. 1982); Hewlett-Packard Co. v. State Dept. of Rev., 749 P.2d 400 (Colo. 1988).