Credit against tax - small food business recovery and resilience grant program equipment - community food consortium duties and responsibilities - tax preference performance statement - legislative declaration - definitions - repeal
7 rules
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(1) (a) The general assembly hereby finds and declares that, in accordance with section 39-21-304 (1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly hereby finds and declares that the purposes of the tax expenditure created in subsection (3) of this section are to:
(I) Induce certain designated behavior by taxpayers, specifically the purchase and use of small food business recovery and resilience grant program equipment and the increase of activities of the community food consortium for small food retailers and Colorado-owned and Colorado-operated farms; and
(II) Contribute to the state's effort to improve access to and lower prices for healthy foods in low-income and underserved areas of the state by supporting small food retailers and small family farms.
(b) The general assembly and the state auditor shall measure the effectiveness of the tax credits in achieving the purposes specified in subsection
(1)(a)(I) of this section based on the number of the tax credits created in this section that taxpayers claim. The department of agriculture and the department of revenue shall provide the state auditor with any available information that would assist the state auditor in this measurement.
(2) As used in this section, unless the context otherwise requires:
(a) Amount certain spent by the member of the consortium on completing its duties and responsibilities means the amount spent on pallet, pallet break, distribution, and delivery fees that is eligible for a subsidy from the consortium but is not otherwise covered by the consortium.
(b) Duties and responsibilities means the duties and responsibilities of the members of the consortium pursuant to section 35-1-117 (2)(a).
(c) Member of the consortium means any member of the community food consortium for small food retailers and Colorado-owned and Colorado-operated farms created in section 35-1-117 (2)(a).
(d) Purchase price means the amount actually paid by the purchaser for the small food business recovery and resilience grant program equipment, including charges for sales tax and freight, but not including any charges for assembly, installation, other construction services, or permit fees.
(e) Purchaser means a small food retailer or small family farm that purchases small food business recovery and resilience grant program equipment.
(f) Small family farm has the same meaning as set forth in section 35-1-117
(g) Small food business recovery and resilience grant program equipment means the items listed in section 35-1-117 (3)(a)(II) and (3)(a)(IV).
(h) Small food retailer has the same meaning as set forth in section 35-1-117 (8)(e).
(3) (a) Subject to the provisions of subsection (4) of this section:
(I) (A) For income tax years commencing on or after January 1, 2024, but before January 1, 2025, any member of the food consortium is allowed a credit against the tax imposed by this article 22 in an amount equal to eighty-five percent of the amount certain spent by the member of the consortium on completing its duties and responsibilities minus any amount awarded to the member of the consortium pursuant to section 35-1-117 (2) for the completion of its duties and responsibilities;
(B) For income tax years commencing on or after January 1, 2025, but before January 1, 2031, any member of the food consortium is allowed a credit against the tax imposed by this article 22 in an amount equal to seventy-five percent of the amount certain spent by the member of the consortium on completing its duties and responsibilities minus any amount awarded to the member of the consortium pursuant to section 35-1-117 (2) for the completion of its duties and responsibilities; and
(II) (A) For income tax years commencing on or after January 1, 2024, but before January 1, 2025, any purchaser of small food business recovery and resilience grant program equipment is allowed a credit against the tax imposed by this article 22 in an amount equal to eighty-five percent of the purchase price of the relevant small food business recovery and resilience grant program equipment minus the amount of any grant awarded under the small food business recovery and resilience grant program for the purchase of the same small food business recovery and resilience grant program equipment;
(B) For income tax years commencing on or after January 1, 2025, but before January 1, 2031, any purchaser of small food business recovery and resilience grant program equipment is allowed a credit against the tax imposed by this article 22 in an amount equal to seventy-five percent of the purchase price of the relevant small food business recovery and resilience grant program equipment minus the amount of any grant awarded under the small food business recovery and resilience grant program for the purchase of the same small food business recovery and resilience grant program equipment.
(b) The credit allowed pursuant to this section is for the income tax year in which a member of the consortium spent an amount certain on completing its duties and responsibilities or a purchaser purchases the relevant small food business recovery and resilience grant program equipment.
(4) (a) A member of the consortium or a purchaser of small food business recovery grant program equipment may submit an application to the department of agriculture for the issuance of a letter of eligibility for a tax credit certificate allowed in this section by the deadlines established in the rules promulgated by the department of agriculture. The application must include:
(I) A certification that the applicant is either:
(A) A purchaser who is a small food retailer or small family farm that purchased small food business recovery and resilience grant program equipment; or
(B) A member of the consortium that spent an amount certain on completing its duties and responsibilities; and
(II) Detailed information regarding:
(A) The purchase price that would be incurred by a purchaser of small food business recovery and resilience grant program equipment and the date on which the purchase would be made; or
(B) An itemized total of the amount certain that would be spent by a member of the consortium on completing its duties and responsibilities, and the date or dates on which the member of the consortium would spend the amounts.
(b) If the department of agriculture determines that the application filed pursuant to subsection (4)(a) of this section is complete, the department of agriculture shall determine whether the applicant would qualify for the credit allowed pursuant to this section if the applicant made the purchase described in the application and the department of agriculture had not issued tax credit certificates in excess of a total of ten million dollars for the income tax year. If the department of agriculture approves the application, the department of agriculture shall issue a letter of eligibility to the applicant that indicates the amount of the tax credit that the purchaser or member of the consortium could claim for the specified income tax year if they were to make the purchase described in the application and if the department of agriculture has not issued tax credit certificates in excess of a total of ten million dollars for the income tax year.
(5) (a) A member of the consortium or a purchaser of small food business recovery grant program equipment shall submit an application to the department of agriculture for the issuance of a tax credit certificate allowed in this section by the deadlines established in the rules promulgated by the department of agriculture. The application must include:
(I) A certification that the applicant is either:
(A) A purchaser who is a small food retailer or small family farm that purchased small food business recovery and resilience grant program equipment; or
(B) A member of the consortium that spent an amount certain on completing its duties and responsibilities; and
(II) Detailed information regarding:
(A) The purchase price incurred by a purchaser of small food business recovery and resilience grant program equipment and the date that the purchase was made; or
(B) An itemized total of the amount certain spent by a member of the consortium on completing its duties and responsibilities, and the date or dates that the member of the consortium spent the amounts.
(b) If the department of agriculture determines that the application filed pursuant to subsection (5)(a) of this section is complete, the department of agriculture shall determine whether the applicant qualifies for the credit allowed pursuant to this section. If the department of agriculture approves the application, the department of agriculture shall issue a tax credit certificate to the applicant that indicates the amount of the tax credit that the purchaser or member of the consortium may claim for the specified income tax year; except that the total amount of tax credit certificates issued by the department of agriculture in a given income tax year must not exceed a total of ten million dollars.
(c) The department of agriculture shall issue tax credit certificates allowed in this section in an order that accords with the rules promulgated by the department of agriculture. The department of agriculture shall review and approve or disapprove an application filed pursuant to subsection (5)(a) of this section within a reasonable time, not to exceed ninety days after the filing of a completed application.
(6) To claim the income tax credit allowed pursuant to this section, the purchaser or member of the consortium shall attach a copy of the tax credit certificate to its state income tax return. No tax credit is allowed pursuant to this section unless the purchaser or member of the consortium provides a copy of the tax credit certificate with its filed state income tax return. The amount of the credit that the purchaser or member of the consortium may claim pursuant to this section is the amount stated on the tax credit certificate.
(7) In a sufficiently timely manner to allow the department of revenue to process returns claiming the income tax credit allowed pursuant to this section, the department of agriculture shall provide the department of revenue with an electronic report of each purchaser or member of the consortium that the department of agriculture approved for the income tax credit allowed pursuant to this section for the preceding calendar year that includes the following information:
(a) The taxpayer's name; and
(b) The taxpayer's social security number, Colorado account number, or federal employer identification number.
(8) If a credit authorized in this section exceeds the income tax due on the income of the member of the consortium or purchaser for the taxable year, the excess credit may not be carried forward and is refundable to the member of the consortium or purchaser.
(9) The department of agriculture and the department of revenue may promulgate rules in accordance with article 4 of title 24 as may be necessary to effectuate the purposes of this section.
(10) This section is repealed, effective December 31, 2035.