{"data":{"id":"us-co/c.r.s.-39-22-556.5","jurisdiction":"us-co","citation":"C.R.S. § 39-22-556.5","heading":"Tax credit for the purchase of sustainable aviation fuel - tax preference performance statement - legislative declaration - definitions - repeal.","body":"(1) (a) 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 finds and declares that the purpose of this tax expenditure is to induce certain designated behavior by taxpayers, specifically the purchase of sustainable aviation fuel for use in the state, by providing tax relief for certain businesses and individuals that purchase sustainable aviation fuel for use in the state.\n\n(b) The general assembly and the state auditor shall measure the effectiveness of the credit in achieving the purposes specified in subsection (1)(a) of this section based on the information required by and reported to the office pursuant to subsection (5) of this section.\n\n(2) As used in this section, unless the context otherwise requires:\n\n(a) \"Carbon intensity\" means the amount of greenhouse gases generated per gallon of sustainable aviation fuel produced.\n\n(b) \"Colorado energy office\" or \"office\" means the Colorado energy office created in section 24-38.5-101.\n\n(c) \"Department\" means the department of revenue.\n\n(d) \"Qualified taxpayer\" means a person who purchases sustainable aviation fuel for uplift and use in the state if that person is subject to tax pursuant to this article 22 or is a person or political subdivision of the state that is exempt from taxation pursuant to section 39-22-112 (1); except that \"qualified purchaser\" does not include a sustainable aviation fuel producer or blender.\n\n(e) \"Sustainable aviation fuel\" has the same meaning as set forth in section 40B (d) of the internal revenue code.\n\n(3) (a) (I) For tax years commencing on or after January 1, 2027, but before January 1, 2033, a qualified taxpayer is allowed a credit against the income tax imposed under this article 22 in an amount not less than one dollar and fifty cents, increased by one cent for each whole percentage of carbon intensity reduction in excess of fifty percent, but no greater than one hundred percent, for each gallon of sustainable aviation fuel that the qualified taxpayer purchased for use in the state during the income tax year, except as otherwise provided in subsection (3)(b) of this section.\n\n(II) For tax years beginning on or after January 1, 2028, the office may allow an additional credit of fifty cents for each gallon of sustainable aviation fuel produced in the state that the qualified taxpayer purchased for use in the state during the income tax year, except as otherwise provided in subsection (3)(b) of this section.\n\n(b) The office shall annually review and evaluate the effectiveness of the tax credit allowed pursuant to this section and may, notwithstanding subsection (3)(a) of this section, for the subsequent tax year, modify the amount per gallon, including the increase as a result of carbon intensity reduction, that a qualified taxpayer is allowed as a credit against the income tax imposed under this article 22 pursuant to this section. The office shall post the modified amount on its website.\n\n(c) For purposes of this section, sustainable aviation fuel is deemed to be purchased for use in the state if it is delivered to and used for fueling aircraft at a Colorado airport, airfield, or airpark notwithstanding the subsequent operation of such aircraft outside the state. Except as provided in this subsection (3)(c), fuel loaded into a cargo tank or otherwise exported from the state is not deemed to be purchased for use in the state.\n\n(d) If a credit is allowed pursuant to this section to a qualified purchaser that is an airport, airfield, or airpark, no additional credit is allowed to a qualified purchaser that purchases the sustainable aviation fuel, directly or indirectly, from the qualified purchaser to which the credit was allowed. The qualified purchaser for which a credit was reserved shall disclose to any purchaser that it has reserved a credit with respect to the sustainable aviation fuel sold.\n\n(4) (a) Prior to purchasing sustainable aviation fuel for use in the state, a qualified taxpayer shall submit an application to the office for a tax credit certificate to reserve the credit allowed by this section on a form and in a manner prescribed by the office. The application must include information to allow the office to make a determination that the applicant is a qualified taxpayer, documentation regarding the carbon intensity of the sustainable aviation fuel that will be purchased, and an estimate of the amount of sustainable aviation fuel the qualified taxpayer plans to purchase for use in the state during the income tax year.\n\n(b) After reviewing the application, the office shall determine whether the applicant qualifies for the credit and the amount of credit to be reserved for the benefit of the qualified taxpayer, which may be all, part, or none of the amount requested in the application. The office shall notify the applicant in writing of its decision and the amount reserved, if any. The aggregate amount of credit the office may reserve pursuant to this subsection (4) must not exceed three million dollars per calendar year. In the case of a qualified taxpayer with an income tax year other than a calendar year, credit reserved pursuant to this subsection (4) may be claimed for the tax year that begins during the calendar year.\n\n(c) Following the close of the tax year, in accordance with the standards developed by the office pursuant to subsection (4)(e) of this section, the qualified taxpayer shall submit documentation substantiating the qualified taxpayer's purchases of sustainable aviation fuel for use in the state during the tax year. Upon a determination by the office that the purchases qualify for the credit allowed by this section, the office shall issue the taxpayer a tax credit certificate for the lesser of the credit allowed pursuant to subsection (3)(a) of this section with respect to the amount of sustainable aviation fuel actually purchased for use in the state or the amount of credit reserved for the benefit of the qualified taxpayer pursuant to this subsection (4).\n\n(d) The office shall, in a sufficiently timely manner to allow the department to process returns claiming the income tax credit allowed in this section, provide the department with an electronic report of each qualified taxpayer that the office approved for the income tax credit allowed in this section for the preceding calendar year that includes the following information:\n\n(I) The taxpayer's name;\n\n(II) The taxpayer's social security number or the taxpayer's Colorado account number and federal employer identification number; and\n\n(III) The amount of the tax credit certificate.\n\n(e) The office shall develop standards for the approval of qualified taxpayers for whom a tax credit under this section is allowed and the awarding of tax credit certificates pursuant to this subsection (4) and shall post those standards on its website.\n\n(5) Notwithstanding the requirement in section 24-1-136 (11)(a)(I), for the purpose of providing data that allows the general assembly and the state auditor to measure the effectiveness of the credit created in subsection (3) of this section pursuant to section 39-21-304 (3), the office, on or before January 1, 2028, and on or before January 1 of each year thereafter until January 1, 2034, shall submit to the general assembly and the state auditor a report detailing the purchase of sustainable aviation fuel by taxpayers claiming the credit in this section. The tax credit meets its purpose if the purchase of sustainable aviation fuel in the state increases significantly in tax years for which the credit is allowed.\n\n(6) If the credit authorized by this section exceeds the income tax due on the income of the qualified taxpayer for the taxable year, the excess credit may not be carried forward and must be refunded to the qualified taxpayer.\n\n(7) This section is repealed, effective December 31, 2038.","path":["Title 39 - Taxation","Article 22 - Income Tax","Part 5 - SPECIAL RULES"],"source_url":"https://olls.info/crs/crs2026-title-39.htm","current_through":"Colorado Revised Statutes 2026","vintage":"","retrieved_at":"2026-09-14T18:37:45Z","sha256":"7bbb48e7eef7e3cda3f359c6eea620449ed0eb0039da9f1df09aae2e9e818fe5","source_id":"us-co","stale":false,"prev":"us-co/c.r.s.-39-22-556","next":"us-co/c.r.s.-39-22-557"},"notice":"GroundRules: Original legal text. Not legal advice."}