Small business recovery tax credits
- authorization to issue
(1)A qualified taxpayer may purchase small business recovery tax credits from the department in accordance with this section and may apply the tax credits against its premium tax liability in accordance with section 24-36-207.
(2)Intentionally left blank —Ed.
(a)The department is authorized to issue tax credit certificates to qualified taxpayers equal to the lesser of a total face value of up to forty million dollars or total sales proceeds of up to thirty million five hundred thousand dollars in fiscal year 2020-21.
(b)The department is authorized to issue tax credit certificates to qualified taxpayers equal to the lesser of a combined total face value of up to twenty-eight million dollars or combined total sales proceeds of up to twenty-one million dollars in fiscal years 2021-22 and 2022-23.
(c)The department may contract with an independent third party to conduct or consult on a bidding process among qualified taxpayers to purchase the tax credits.
(d)The department shall consult with insurance companies in advance of issuing any tax credits in accordance with this section.
(3)An insurance company authorized to do business in Colorado seeking to purchase tax credits must apply to the department in the manner prescribed by the department.
(4)Using procedures adopted by the department, or, if applicable, by an independent third party, each insurance company that submits an application shall make a timely and irrevocable offer, contingent only upon the department’s issuance to the insurance company of the tax credit certificates, to make a specified purchase payment amount to the department on dates specified by the department. The offer must include all of the following:
(a)The requested amount of tax credits, which must not be less than any minimum amount established in procedures by the department or, if applicable, the independent third party;
(b)The qualified taxpayer’s proposed tax credit purchase amount for each tax credit dollar requested. The minimum proposed tax credit purchase amount must be either:
(I)The percentage of the requested dollar amount of tax credits that the department and, if applicable, the independent third party determines to be consistent with market conditions as of the offer date; or
(II)If no amount is established by the department or independent third party pursuant to subsection (4)(b)(I) of this section, seventy-five percent of the requested dollar amount of tax credits; and
(c)Any other information the department, or, if applicable, independent third party requires.
(5)The department shall provide written notice to each insurance company that submits an application indicating whether or not the insurance company has been approved as a purchaser of tax credits and, if so, the amount of tax credits allocated and the date by which payment of the tax credit sale proceeds must be made.
(6)On receipt of payment of the sale proceeds, the department shall issue to each qualified taxpayer a tax credit certificate. The tax credit certificate must state all of the following:
(a)The total amount of premium tax credits that the qualified taxpayer may claim;
(b)The amount that the qualified taxpayer has paid or agreed to pay in return for the issuance of the tax credit certificates and the date of the payment;
(c)The dates on which the tax credits will be available for use by the qualified taxpayer;
(d)Any penalties or other remedies for noncompliance;
(e)The procedures to be used for transferring or assuming the tax credits in accordance with subsection (7)(e) of this section or section 24-36-207 (6), or between affiliates as defined in section 10-3-801 (1);
(f)The serial number of the tax credit certificate; and
(g)Any other requirements deemed necessary by the department as a condition of issuing the tax credit certificate.
(7)Intentionally left blank —Ed.
(a)The department shall not issue a tax credit certificate to any qualified taxpayer that fails to provide the tax credit sale proceeds within the time the department specifies.
(b)A qualified taxpayer that fails to provide the tax credit sale proceeds within the time the department specifies is subject to a penalty equal to ten percent of the amount of the purchase price that remains unpaid. The penalty must be paid to the department within thirty days after demand.
(c)The department may offer to reallocate the defaulted tax credits among other qualified taxpayers, so that the result after reallocation is the same as if the initial allocation had been performed without considering the tax credit allocation to the defaulting qualified taxpayer.
(d)If the reallocation of tax credits under subsection (7)(c) of this section results in the payment by another qualified taxpayer of the amount of tax credit sale proceeds not paid by the defaulting qualified taxpayer, the department may waive the penalty imposed under subsection (7)(b) of this section.
(e)A qualified taxpayer that fails to pay the tax credit sale proceeds within the time specified may avoid the imposition of the penalty by transferring the allocation of tax credits to a new or existing qualified taxpayer within thirty days after the due date of the defaulted installment. Any transferee of an allocation of tax credits of a defaulting qualified taxpayer under this subsection (7) shall agree to pay the tax credit sale proceeds within five days after the date of the transfer.
(8)The tax credit sale proceeds provided by a qualifying taxpayer in return for a tax credit certificate must be deposited in the small business recovery fund.
(9)Intentionally left blank —Ed.
(a)The department shall provide a report to the division of insurance in the department of regulatory agencies for each fiscal year in which it issues tax credit certificates pursuant to this part 2 within thirty days after the issuance of the credits. The report must include:
(I)The name and identifying number issued by the national association of insurance commissioners, or any successor organization, of each qualified taxpayer to which the department issued a tax credit certificate;
(II)The total amount of the tax credit allocated to the qualified taxpayer; and
(III)The serial number of the tax credit certificate issued to the qualified taxpayer.
(b)The department shall maintain records of each tax credit certificate issued, transferred, or assumed that are sufficient to allow the division of insurance in the department of regulatory agencies to verify the issuance and ownership of the credit.
Section 24-36-206 — Small business recovery tax credits - authorization to issue - terms - report,
https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-24.pdf (accessed Oct. 20, 2023).