Colorado § 39-22-623 - Disposition of collections - definition.

§ 39-22-623. Disposition of collections - definition.

(1) The proceeds of all money collected under this article 22, less the reserve retained for refunds, shall be credited as follows:

(a) (I) Repealed.

(II) (A) Effective July 1, 1987, an amount equal to twenty-seven percent of the gross state cigarette tax shall be apportioned to incorporated cities and incorporated towns that levy taxes and adopt formal budgets and to counties. For the purposes of this section, a city and county is considered a city. The city or town share shall be apportioned according to the percentage of state sales tax revenues collected by the department of revenue in an incorporated city or town as compared to the total state sales tax collections that may be allocated to all political subdivisions in the state; the county share shall be the same as that which the percentage of state sales tax revenues collected in the unincorporated area of the county bears to total state sales tax revenues that may be allocated to all political subdivisions in the state. The department of revenue shall certify to the state treasurer, at least annually, the percentage for allocation to each city, town, and county, and the department shall apply the percentage for allocation certified in all distributions to cities, towns, and counties until changed by certification to the state treasurer. In order to qualify for distributions of state income tax money, units of local government are prohibited from imposing taxes on any person as a condition for engaging in the business of selling cigarettes. For purposes of this subsection (1)(a)(II), the "gross state cigarette tax" means the total tax from ten mills on each cigarette before the discount provided for in section 39-28-104 (1), plus an amount equal to the amount transferred to the general fund for the state fiscal year in accordance with section 24-22-118 (2). For any city, town, or county that was previously disqualified from the apportionment set forth in this subsection (1)(a)(II)(A) by reason of imposing a fee or license related to the sale of cigarettes, the city, town, or county is eligible for any allocation of money that is based on an apportionment made on or after July 1, 2019, but not for an allocation of money that is based on an apportionment made before July 1, 2019.

(B) Money apportioned pursuant to this subsection (1)(a)(II)(B) shall be included for informational purposes in the general appropriation bill or in supplemental appropriation bills.

(C) For state fiscal years commencing on or after July 1, 2023, revenue collected by the state and apportioned pursuant to this subsection (1)(a)(II) is a collection for another government, as defined in section 24-77-102 (1), for the purpose of determining state fiscal year spending, as defined in section 24-77-102 (17).

(b) Following apportionment of the city, town, and county shares pursuant to paragraph (a) of this subsection (1) and pursuant to section 29-21-101, C.R.S., all remaining funds, less the amount credited to the reserve created in section 39-29-107.8, in accordance with subsection (2) of said section, shall be credited to the general fund, and the general assembly shall make appropriations therefrom for the expenses of the administration of this article.

(c) Distribution to each city, town, and county shall be made monthly, no later than the fifteenth day of the second successive month after the month for which cigarette tax collections are made, commencing in October 1973.

(d) Each city, town, and county, upon request and at reasonable times, shall be entitled to verify with the executive director or his designated representative the proceeds to which the local government is entitled pursuant to the provisions of this section.

(e) Where, prior to July 1, 1973, a city or town has pledged the proceeds of all or a portion of its local cigarette tax or tax on the occupation of selling cigarettes for the payment of bonds or other obligations, the city or town shall pledge or place in trust an equivalent amount from its share of the proceeds of the state cigarette tax for the payment of such bonds or other obligations.

(f) Repealed.

Source: L. 64: R&RE, p. 809, § 1. C.R.S. 1963: § 138-1-94. L. 73: p. 1450, § 1. L. 74: (1)(b) amended, p. 432, § 1, effective May 17. L. 77: (1)(a) amended, p. 1793, § 3, effective July 1; (1)(f) added, p. 1811, § 2, effective January 1, 1978. L. 83: (1)(a) amended, p. 2099, § 12, effective October 13; (1)(a) amended, p. 2053, § 27, effective October 14. L. 85: (1)(a) amended, p. 1267, § 5, effective May 30. L. 86: (1)(a) amended, p. 1111, § 10, effective July 1. L. 93: (1)(a)(II) amended, p. 1509, § 10, effective June 6. L. 94: (1)(a)(II) amended, p. 1804, § 2, effective May 31. L. 2002: (1)(f) repealed, p. 1362, § 19, effective July 1. L. 2016: (1)(b) amended, (SB 16-218), ch. 289, p. 1172, § 2, effective June 10. L. 2019: IP(1) and (1)(a)(II)(A) amended, (HB 19-1033), ch. 53, p. 185, § 5, effective July 1. L. 2020: (1)(a)(II)(A) amended, (HB 20-1427), ch. 248, p. 1212, § 26, effective January 1, 2021. L. 2024: (1)(a)(II)(B) amended and (1)(a)(III)(C) added, (HB 24-1469), ch. 359, p. 2441, § 3, effective June 3.

Editor's note: (1) Amendments to subsection (1)(a) by Senate Bill 83-414 and House Bill 83-1595 were harmonized.

(2) Subsection (1)(a)(I)(B) provided for the repeal of subsection (1)(a)(I), effective July 1, 1987. (See L. 86, p. 1111.)

(3) Section 27(2) of chapter 248 (HB 20-1427), Session Laws of Colorado 2020, provides that changes to this section take effect on the date of the governor's proclamation or January 1, 2021, whichever is later, only if, at the November 2020 statewide election, a majority of voters approve the ballot issue referred in accordance with section 39-28-401. The ballot issue, referred to the voters as proposition EE, was approved on November 3, 2020, and was proclaimed by the Governor on December 31, 2020. The vote count for the measure was as follows:

FOR: 2,134,608

AGAINST: 1,025,182

Cross references: (1) For the procedure for refunds, see § 39-21-108.

(2) For the legislative declaration in HB 24-1469, see section 1 of chapter 359, Session Laws of Colorado 2024.

ANNOTATION

A city imposing a sales tax on retailers and consumers of cigarettes is precluded from receiving a share of state income tax revenue because subsection (1)(a)(II)(A) prohibits local sales taxes on any person engaging in the business of selling cigarettes. City of Aurora v. Colo. Dept. of Rev., 2023 COA 17, 529 P.3d 1234.

It was the general assembly's intent to render all taxes on cigarettes, not just occupation taxes, disqualifying. City of Aurora v. Colo. Dept. of Rev., 2023 COA 17, 529 P.3d 1234.

"Any person" as used in subsection (1)(a)(II)(A) includes a consumer or retailer of cigarettes. The prohibition on local sales tax levied on "any person" applies to local sales taxes levied on either a consumer or a retailer. City of Aurora v. Colo. Dept. of Rev., 2023 COA 17, 529 P.3d 1234.