C.R.S. § 39-22-543 — Credit for wildfire hazard mitigation expenses - legislative declaration - definitions - repeal

(1) The general assembly declares that the purpose of the tax expenditure in this section is to reimburse a landowner for the costs incurred in performing wildfire mitigation measures on the landowner's property located within the state. (2) As used in this section, unless the context otherwise requires: (a) Costs means any actual out-of-pocket expense incurred and paid by the landowner to a third-party service provider, documented by receipt, for performing wildfire mitigation measures. Costs does not include any inspection or certification fees, in-kind contributions, donations, incentives, or cost sharing associated with performing wildfire mitigation measures. Costs does not include expenses paid by the landowner from any grants awarded to the landowner for performing wildfire mitigation measures. Costs does not include any amount paid by the landowner for the purchase or rental of any article of tangible personal property for the landowner's own use. (b) Inflation means the annual percentage change in the United States department of labor's bureau of labor statistics consumer price index for Denver-Aurora-Lakewood for all items paid by all urban consumers, or its applicable predecessor or successor index. (c) Landowner means any owner of record of private land located within the state, including any easement, right-of-way, or estate in the land, and includes the heirs, successors, and assigns of such land. Landowner shall not include any partnership, S corporation, or other similar entity that owns private land as an entity, unless there is a dwelling on that land that is designed for residential occupancy. (d) Wildfire mitigation measures means the creation of a defensible space around structures; the establishment of fuel breaks; the thinning of woody vegetation for the primary purpose of reducing risk to structures from wildland fire; or the secondary treatment of woody fuels by lopping and scattering, piling, chipping, removing from the site, or prescribed burning; so long as such activities meet or exceed any Colorado state forest service standards or any other applicable state rules. (3) (a) In the case of two taxpayers filing a joint return, the amount of the credit shall not exceed six hundred twenty-five dollars in any taxable year. In the case of two taxpayers who may legally file a joint return but actually file separate returns, only one of the taxpayers may claim the credit specified in this section. (b) In the case of real property owned by tenants in common or joint tenants, the credit allowed pursuant to this section is only allowed for one of the individuals of the ownership group. (4) (a) For income tax years commencing on or after January 1, 2023, but prior to January 1, 2025, a landowner with a federal taxable income at or below one hundred twenty thousand dollars for the income tax year commencing on or after January 1, 2023, as adjusted for inflation and rounded to the nearest hundred dollar amount for each income tax year thereafter, is allowed a credit against the income taxes imposed by this article 22 in an amount equal to twenty-five percent of up to two thousand five hundred dollars in costs for wildfire mitigation measures. The maximum total credit in a taxable year is six hundred twenty-five dollars. (b) For income tax years commencing on or after January 1, 2025, but prior to January 1, 2028, a landowner with a federal taxable income at or below one hundred twenty thousand dollars for the income tax year commencing on or after January 1, 2023, as adjusted for inflation and rounded to the nearest hundred dollars for each income tax year thereafter, is allowed a credit against the income taxes imposed by this article 22 in an amount equal to the landowner's costs incurred for wildfire mitigation measures in an amount up to one thousand dollars. The maximum total credit in a taxable year is one thousand dollars. (5) If the amount of a credit under this section exceeds a taxpayer's actual tax liability for an income tax year, the amount of the credit not used to offset the taxpayer's income tax liability is not refunded to the taxpayer and shall not be carried forward as a tax credit against the taxpayer's income tax liability in any subsequent tax year. (6) This section is repealed, effective January 1, 2030. Source: L. 2022: Entire section added, (HB 22-1007), ch. 343, p. 2458, § 3, effective June 3. L. 2024: (2)(a) and (4) amended, (HB 24-1036), ch. 373, p. 2535, § 32, effective August 7. Cross references: For the legislative declaration in HB 24-1036, see section 1 of chapter 373, Session Laws of Colorado 2024.