Colorado § 39-3-106.5 - Tax-exempt property - incidental use - exemption - limitations.

§ 39-3-106.5. Tax-exempt property - incidental use - exemption - limitations.

(1) If any property, real or personal, which is otherwise exempt from the levy and collection of property tax pursuant to the provisions of section 39-3-106, is used for any purpose other than the purposes specified in sections 39-3-106 to 39-3-113.5, such property shall be exempt from the levy and collection of property tax if:

(a) The property is used for such purposes for less than two hundred eight hours, adjusted for partial usage if necessary on the basis of the relationship that the amount of time and space used for such other purpose bears to the total available time and space, during the calendar year; or

(b) The use of the property for such purposes results in either:

(I) Less than ten thousand dollars of gross income to the owner of such property which is derived from any unrelated trade or business, as determined pursuant to the provisions of sections 511 to 513 of the federal "Internal Revenue Code of 1986", as amended; or

(II) Less than ten thousand dollars of gross rental income to the owner of such property.

(1.5) Notwithstanding the provisions of subsection (1) of this section, for property tax years commencing on or after January 1, 1994, if any property, real or personal, which is otherwise exempt from the levy and collection of property tax pursuant to the provisions of section 39-3-106, is used for any purpose other than the purposes specified in sections 39-3-106 to 39-3-113.5, such property shall be exempt from the levy and collection of property tax if:

(a) The property is used for such purposes for less than two hundred eight hours, adjusted for partial usage if necessary on the basis of the relationship that the amount of time and space used for such other purpose bears to the total available time and space, during the calendar year; or

(b) The use of the property for such purposes results in:

(I) Less than ten thousand dollars of gross income to the owner of such property which is derived from any unrelated trade or business, as determined pursuant to the provisions of sections 511 to 513 of the federal "Internal Revenue Code of 1986", as amended; and

(II) Less than ten thousand dollars of gross rental income to the owner of such property.

(2) Except as otherwise provided in section 39-3-108 (3) and subsection (3) of this section, if any property, real or personal, that is otherwise exempt from the levy and collection of property tax pursuant to the provisions of sections 39-3-107 to 39-3-113.5 is used on an occasional, noncontinuous basis for any purpose other than the purposes specified in sections 39-3-106 to 39-3-113.5, such property shall be exempt from the levy and collection of property tax if:

(a) The property is used for such purposes for less than two hundred eight hours, adjusted for partial usage if necessary on the basis of the relationship that the amount of time and space used for such other purpose bears to the total available time and space, during the calendar year; or

(b) The use of the property for such purposes results in less than twenty-five thousand dollars of gross rental income to the owner of such property.

(3) The requirement that property be used on an occasional basis in order to qualify for the exemption set forth in subsection (2) of this section shall not apply to property, real or personal, that is otherwise exempt from the levy and collection of property tax pursuant to the provisions of section 39-3-111 that is used for any purpose other than the purposes specified in sections 39-3-106 to 39-3-113.5.

Source: L. 89: Entire section added, p. 1486, § 2, effective June 7. L. 91: (2) added, p. 1956, § 2, effective June 7. L. 93: (1.5) added, p. 613, § 1, effective April 30. L. 2004: (2)(b) amended, p. 359, § 1, effective August 4. L. 2011: IP(2) amended and (3) added, (HB 11-1010), ch. 275, p. 1240, § 2, effective August 10. L. 2013: IP(1), IP(1.5), IP(2), and (3) amended, (HB 13-1300), ch. 316, p. 1703, § 118, effective August 7.

ANNOTATION

The state board of assessment appeals (board) did not apply correct legal standard and, therefore, erred as a matter of law in finding that property owner did not qualify for a charitable use exemption. Assuming that the board correctly applied this section to determine that the property owner exceeded the adjusted hours or gross rental income for non-exempt use to entitle it to fully exempt status, the board then should have considered whether the property owner was entitled to a partial charitable use exemption. The board also did not properly consider whether the property owner used the properties solely and exclusively for strictly charitable purposes. Accordingly, the board did not apply the proper legal standards when it found that the property owner did not qualify for a charitable use exemption. Larimer County Bd. v. Prop. Tax Adm'r, 2013 COA 49M, 316 P.3d 60.