The Colorado Department of Revenue announced that a strong boost in the state’s economy caused Colorado to exceed their revenue cap in 2021, and they must now provide refunds from the surplus.
“These tax cuts and refunds are a strong sign that Colorado’s economy is roaring back...”
Property Tax Reimbursements, Sales Tax Refunds & More
The Colorado Taxpayer’s Bill of Rights (TABOR) Amendment, approved in 1992, limits the amount of revenue state governments can retain and spend and requires excess amounts to be refunded to taxpayers. The 2021 TABOR surplus in Colorado will result in property tax reimbursement for seniors and veterans, income tax rate reductions, and sales tax refunds. All taxpayers who file a 2021 income tax return will automatically receive a temporary rate reduction from 4.55% to 4.50%, resulting in larger refunds or a smaller bill due.
In addition, individual taxpayers may also receive a sales tax refund based on their adjusted gross income provided they file a 2021 income tax return by October 18, 2022. The sales tax refund will occur as long as there is still excess revenue after reimbursing and funding the local governments’ property tax exemptions and temporary income tax rate reductions.