If the state exceeds its fiscal year spending limit, it is required to refund the excess state revenues (TABOR refund). The act changes the way the state will distribute a TABOR refund for the 2022-23 state fiscal year. Currently, there are 3 different methods to effectuate a TABOR refund:
- A reimbursement to counties for property tax revenue reductions as a result of the senior and veteran property tax exemption;
- A reimbursement to counties for reductions in property tax revenues due to reductions in valuation for assessment; and
- A six-tier sales tax refund for individual taxpayers under which refunds increase, based on the tiers, as a taxpayer's income increases.
The act creates a new temporary refund mechanism (temporary TABOR refund), which is contingent on the voters approving proposition HH at the November 7, 2023, statewide election, that replaces the sales tax refund mechanism for the 2022-23 state fiscal year. Under this mechanism, each qualified individual is eligible to receive an identical refund payment from the remaining excess state revenues from all sources after refunds are made through the county reimbursement mechanisms (remaining excess state revenues). A qualified individual filing a single return is entitled to one temporary TABOR refund, and 2 qualified individuals filing a joint return are entitled to 2 temporary TABOR refunds.
APPROVED by Governor May 24, 2023
PORTIONS EFFECTIVE May 24, 2023
PORTIONS EFFECTIVE January 1, 2024
NOTE: Section 2 of the act states that section 1 of the act takes effect only if, at the November 2023 statewide election, a majority of voters approve the ballot issue submitted for their approval or rejection pursuant to section 24-77-202, C.R.S., as enacted by Senate Bill 23-303 and that if the voters at the November 2023 statewide election approve the ballot issue, then section 1 of this act takes effect on the later of January 1, 2024, or the date of the official declaration of the vote thereon by the governor.
(Note: This summary applies to this bill as enacted.)