TABOR Refund Mechanism For FY 2021-22 Only

If the state exceeds its constitutional spending limit, then it is required by the Taxpayer's Bill of Rights (TABOR) to refund the excess state revenues (TABOR refunds). There are currently 3 TABOR refund mechanisms: Reimbursement to counties for the senior homestead exemption, a temporary income tax rate reduction, and a sales tax refund.

The act establishes a temporary fourth TABOR refund mechanism for excess state revenues from all sources for state fiscal year 2021-22. Under this mechanism, if the amount of excess state revenues exceeds the projected total amount of TABOR refunds issued as reimbursement to counties for the senior homestead exemption and, if applicable, through the temporary income tax rate reduction, then on or before September 30, 2022, the department of revenue is required to issue refund checks to every qualified individual in an identical amount; except that, for qualified individuals who were granted an extension to file a state income tax return and timely file the state income tax return, the refund checks must be issued on or before January 31, 2023.

The refund amount is $400 for every qualified individual who files a single income tax return or who applies for a property tax, rent, or heat credit rebate and $800 for each pair of qualified individuals who file a joint income tax return or who apply for a property tax, rent, or heat credit rebate; except that:

• If the anticipated aggregate amount of the refund plus the estimated amounts to be refunded through reimbursement to counties for the senior homestead exemption and the temporary income tax rate reduction is estimated to refund less than 85% of the total amount of excess state revenues, then the executive director of the department of revenue must increase the refund amount so that the aggregate amount refunded is approximately equal to 85% of the total excess state revenues inclusive of amounts to be refunded through reimbursement to counties for the senior homestead exemption and the temporary income tax rate reduction; and
• If the anticipated aggregate amount of the refund, plus the estimated amounts to be refunded through reimbursement to counties for the senior homestead exemption and the temporary income tax rate reduction, is estimated to refund more than 87% of the total excess state revenues, then the executive director of the department of revenue may decrease the refund, to avoid an over-refund, to an amount less than $400 for every qualified individual who files a single income tax return or who receives a property tax, rent, or heat credit rebate and $800 for each pair of qualified individuals who file a joint income tax return or who receive a property tax, rent, or heat credit rebate.

Any increase or decrease to the refund amount must be rounded to the nearest fifty dollar increment and must maintain an equal temporary refund for every qualified individual that is doubled for each pair of qualified individuals filing a joint return or applying jointly for a property tax, rent, or heat credit rebate.

"Qualified individual" is defined for purposes of the act as a natural person who is at least 18 years of age on or before December 31, 2021, is a Colorado resident for the entire 2021income tax year, and files a state income tax return for the 2021 income tax year or applies for a property tax, rent, or heat credit rebate.

$2,578,995 is appropriated from the general fund to the department of revenue to implement the temporary TABOR refund mechanism and $1,715,635 of that appropriation is reappropriated to the department of personnel to provide related document management services for the department of revenue.

(Note: This summary applies to this bill as enacted.)