State & Local Tax Impacts of COVID-19 for Colorado – 2020

Thoughtware Alert Published: Dec 11, 2020 | Updated: May 05, 2021
SALT GOV COVID TW - 1

Information current as of December 31, 2020.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Colorado

  • Colorado issued a tax extension for all filers, without penalty or interest, until July. Estimated tax payments due on or after April 15 also can be filed later.
    • Gov. Jared Polis Executive Order 2020-010, March 20, 2020.
  • Colorado issued an extension for the filing deadlines from April 15 to June 15 for: 1) business personal property; 2) taxable natural resource property (mining); and 3) taxable oil and gas property.
    • Governor’s Executive Order D 2020-022, April 2, 2020.
  • Colorado emergency regulations granted filing and payment extensions to July 15 for estimated and annual income tax imposed on individuals, estates, trusts and corporations, as well as the alternative minimum tax. The extensions do not apply to payments such as those made pursuant to a deficiency notice.
    • Colorado Emergency Regs. §§39-22-608 and 39-22-609, effective April 3, 2020, for 120 days.
  • Colorado extended sales tax returns and payments originally due on April 20, 2020, to May 20, 2020. CDOR will waive penalties and interest for retailers that file their return and remit the full amount due on or before May 20, 2020.
    • Governor’s Executive Order D 2020 023, April 5, 2020.
    • Colorado DOR Notice, April 6, 2020.
  • Colorado extended the severance tax filing and payment due date from April 15 to May 15, 2020.
    • Governor’s Executive Order D 2020-033, April 9, 2020.
    • Colorado DOR Notice, April 10, 2020.
  • Colorado has further extended income tax deadlines to include all income tax payments with normal deadlines due between April 15, 2020, and July 15, 2020, until July 15, 2020.
    • Governor’s Executive Order D 2020 040, April 18, 2020.
    • Colorado Emergency Regs. §39-22-608 and §39-22-609, effective and revised April 21, 2020, for 120 days.
  • The due date for Colorado state motor vehicle taxes due on purchases has been extended to 90 days past the original due date.
    • Colorado DOR Notice, April 28, 2020.
  • Colorado has extended the calendar-year 2020 statutory deadlines for property tax filing requirements for certain taxable property in response to COVID-19 to permit the State Board of Equalization within the Department of Local Affairs to promulgate and issue necessary emergency rules to extend filing deadlines. Business personal property tax filings are due June 15, 2020. The state filing deadlines for public utilities, taxable natural resource property, airline and rail transportation companies, and taxable oil and gas property are extended to May 15, 2020.
    • Governor’s Executive Order No. D 2020 055, May 1, 2020.
    • Extends Executive Order D 2020 022.
  • Colorado has further extended for one month the filing and payment due dates for state and state-administered local sales taxes.
    • Governor’s Executive Order No. D 2020 057, May 4, 2020.
    • Extends Executive Order D 2020 023.
  • Colorado has further extended Executive Order D 2020 033 and the temporary suspension of certain statutes to provide a one-month extension for filing and remitting severance tax.
    • Governor’s Executive Order No. D 2020 059, May 8, 2020.
  • Colorado has further extended income tax deadlines as follows: 1) extending Executive Order D 2020 010, as amended and extended by Executive Order 2020 040, for an additional 30 days from May 17; 2) extending state income tax filing deadlines to July 15 to align with the federal extension; 3) extending state income tax payment deadlines for all taxpayers; and 4) clarifying that Executive Order D 2020 010, as amended and extended by Executive Order D 2020 040, shall remain in full force and in effect as originally promulgated in all other respects.
    • Governor’s Executive Order No. D 2020 069, May 17, 2020.
  • Colorado has again adopted emergency regulations to formally amend the due date for certain income tax returns and payments as a result of the COVID-19 pandemic. The emergency regulations replace those previously issued in April 2020. The July 15, 2020, extended due date remains the same.
    • Colorado Emergency Regs. §§39-22-608–2 and 39-22-609–1, effective April 20 to August 18, 2020.
  • Colorado has further extended until June 29, 2020, the calendar-year 2020 statutory filing requirement deadlines for business personal property, taxable natural resource property (mining), and taxable oil and gas property. This order extends Executive Order D 2020 022 (expired May 1, 2020), which had been extended by Executive Order D 2020 055 (expired on May 31, 2020). 
    • Governor’s Executive Order D 2020 089, May 30, 2020.
  • Colorado has further extended income tax deadlines as follows: 1) extending Executive Order D 2020 010, as amended and extended by Executive Order 2020 040 and extended by Executive Order D 2020 069, for an additional 30 days from June 15; 2) extending state income tax filing deadlines to July 15 to align with the federal extension; and 3) extending state income tax payment deadlines for all taxpayers. The executive order expires on July 16 unless extended further by executive order.
    • Governor’s Executive Order No. D 2020 105, June 15, 2020.
  • Colorado further extended Executive Orders D 2020 022, D 2020 055, and D 2020 089 for an additional 30 days for statutory deadlines on taxpayer filing requirements for certain taxable property due to COVID-19. The order also amended Executive Order D 2020 022 by striking out the measure directing the State Board of Equalization to promulgate and issue emergency rules to extend the filing deadlines listed in business real property, taxable natural resource property, and taxable oil and gas property statutes because the relevant filing date extensions have expired.
    • Governor’s Executive Order No. D 2020 121, June 28, 2020.
  • Colorado legislation decouples from certain provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). For tax year 2020, the following additions must be made to federal taxable income for Colorado tax purposes: (1) the portion of the NOL deduction that’s attributable to Section 2303 of the CARES Act; (2) the portion of excess business loss deduction under Internal Revenue Code (IRC) §461(l) that exceeded the limitation in the Tax Cuts and Jobs Act (TCJA), as is permitted by §2304 of the CARES Act; and (3) the portion of the business interest income deduction under IRC §163(j) that exceeded the limitation in the TCJA, as is permitted by §2306 of the CARES Act. For 2021 and 2022, the bill requires pass-through business owners who claim a federal qualified business income deduction to add back the amount of the deduction for state income tax purposes, i.e., if their adjusted gross income (AGI) exceeds $500,000 for single filers or $1,000,000 for married taxpayers filing jointly, except for taxpayers who report farm income on their federal tax return. In addition, the legislation provides that for NOLs incurred after December 31, 2017, the 80 percent limitation set forth in the TCJA applies without regard to the CARES Act. Finally, starting in tax year 2021, the legislation extends the state earned income tax credit (EITC), available to taxpayers who are allowed the federal EITC and equal to 10 percent of the federal EITC, to taxpayers who would otherwise qualify for the federal EITC but who are disqualified because they, their spouse or one or their dependents don’t have a valid Social Security number. Beginning in tax year 2022, the state EITC is increased to 15 percent of the federal EITC.
    • Colorado H.B. 1024, Laws 2020, effective June 26, 2020.
    • Colorado H.B. 1420, Laws 2020, effective July 11, 2020.
    • Also see Colorado DOR CARES Act Tax Law Changes & Colorado Impact for general guidance and conformity, June 1, 2020.
  • Colorado further extended Executive Orders D 2020 022, D 2020 055, D 2020 089, and D 2020 121 for an additional 30 days from July 27 due to COVID-19 for property tax purposes. The orders extend statutory deadlines on taxpayer filing requirements for certain taxable property. The new executive order expires on August 26, unless extended further.
    • Governor's Executive Order No. D 2020 150, July 27, 2020.
  • Colorado revised information regarding the effect on state tax law due to the CARES Act for individual income, trust income, and corporate income tax purposes. The state doesn’t incorporate federal statutory changes to the IRC enacted after the last day of a tax year. Amended returns reporting only CARES Act adjustments shouldn’t be filed unless the original return reflected federal adjustments allowed by the CARES Act. The guidance also explains the treatment of net operating loss carryback and deduction limitations, changes to qualified improvement property depreciation, and the business interest expense and excess loss limitations. 
    • Colorado DOR Release, CARES Act Tax Law Changes & Colorado Impact, September 23, 2020.
  • Colorado will convene the 72nd General Assembly in special session beginning November 30, 2020, due to the continuing COVID-19 emergency. The governor is asking the General Assembly to consider appropriate legislative action and funding in seven areas, including for small business. The governor seeks to provide direct support, including an expeditious direct assistance funding mechanism, to gyms, restaurants, bars, arts and culture venues, event-related businesses such as entertainment venues, and other small businesses adversely affected by capacity restrictions and other public health orders imposed. The governor also is seeking emergency tax relief by asking the General Assembly to consider allowing certain small businesses, such as restaurants and bars, to retain up to $2,000 per month of the 2.9 percent gross state sales tax they already collect so these businesses can pay for expenses. He also requested that certain licensing and establishment fees be waived. 
    • Governor’s Executive Order D 2020 259, November 19, 2020.
  • Colorado has further extended the state sales tax payment deadline for 30 days for qualifying restaurants and bars that are required to file a sales tax return for sales made in November 2020 by December 20, 2020. The qualifying establishments, as described in the order, may deduct from state net taxable sales the lesser of state net taxable sales or $70,000 and retain the resulting sales tax collected. The deduction calculation for the mobile food services industry, including food trucks, also is provided. Any remaining sales tax and all state-administered local taxes must still be paid on or before December 20, 2020. Under the order, the deduction only applies to the above filing period and may only be retained until the earlier of the sales tax return due April 20, 2021, or the retailer’s final sales tax return. A press release from the governor’s office explains that the intent of the executive order is to give advance notice to bars and restaurants about the November collections deadline extension before the special legislative session where the General Assembly will consider appropriate legislative action to allow bars and restaurants to retain for the months of November through February up to $2,000 per month of the 2.9 percent gross state sales tax they collect so these businesses can pay expenses and remain open.
    • Colorado Executive Order D 2020 261, expiring 30 days from November 25, 2020.
  • Colorado will allow bars, restaurants, food trucks, and tasting rooms to deduct up to $70,000 in sales from their monthly state sales tax return for four months and at up to five locations. This amounts to credits of about $2,000 in sales tax collections per retailer between November and February.
    • Colorado H.B. 1004, Laws 2020 Special Session, effective December 7, 2020.

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