Failure by corporation to pay estimated income tax

# (1)

Every corporation subject to taxation under the provisions of this article and article 29 of this title shall make and file estimated payments in the amounts as specified in this section.

# (2)

As used in this section, unless the context otherwise requires:

# (a)

Return means a Colorado return required to be made or filed under section 39-22-601 or 39-29-112.

# (b)

Tax or tax liability means: (I) (A) The tax imposed under this article; minus (B) The credits against tax provided by this article. For purposes of this section, credits include all credits without regard to whether they are prepayment credits or refunds of excess state revenue; and (II) (A) The tax imposed under article 29 of this title; minus (B) The credits against tax provided by article 29 of this title other than the credit against tax for withholding provided pursuant to section 39-29-111. For purposes of this section, credits include all credits without regard to whether they are prepayment credits.

# (3)

# (a)

Except as otherwise provided in this section, in the case of any underpayment of estimated tax by a corporation, there shall be added to the tax under this article and article 29 of this title for the taxable year an amount determined by applying the rate of interest established under section 39-21-110.5 to the amount of the underpayment for the period of the underpayment.

# (b)

For purposes of this subsection (3), the amount of the underpayment shall be the excess of the required installment over the amount, if any, of the installment paid on or before the due date for the installment.

# (c)

The period of the underpayment shall run from the due date for the installment to whichever of the following dates is earlier: (I) The fifteenth day of the fourth month following the close of the taxable year; or (II) With respect to any portion of the underpayment, the date on which such portion is paid.

# (d)

For purposes of subparagraph (II) of paragraph (c) of this subsection (3), a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid.

# (4)

(a) Except as otherwise set forth in paragraph (b) of this subsection (4), for purposes of this section, there shall be four required installments for each taxable year. The due dates for such installments shall be as follows: Installment Due date 1st April 15 2nd June 15 3rd September 15 4th December 15 (b) (I) If the due date of any installment payment required pursuant to this section falls on a legal federal holiday, then the due date shall be delayed and due on the adjusted federal due date. (II) On and after July 1, 2007, for purposes of this section, there shall be twelve installments for the tax imposed pursuant to section 39-29-105 for each taxable year. The due date for such installments shall be the fifteenth day of each month, and the installments shall be paid electronically. The department of revenue shall promulgate rules in accordance with article 4 of title 24, C.R.S., governing electronic payment.

# (5)

# (a)

For purposes of this section, the amount of the required installments set forth in paragraph (a) of subsection (4) of this section for the tax imposed under this article and for the tax imposed under article 29 of this title shall be twenty-five percent of the required annual payment for each such tax. (a.5) On and after July 1, 2007, for purposes of this section, the amount of the required installments set forth in paragraph (b) of subsection (4) of this section for the tax imposed pursuant to section 39-29-105 shall be one-twelfth of the required annual payment for the tax.

# (b)

For purposes of paragraphs (a) and (a.5) of this subsection (5), required annual payment means the lesser of: (I) Seventy percent of the taxpayer's actual Colorado tax liability shown on the return for the taxable year or, if no return is filed, seventy percent of the tax for such year; or (II) (A) One hundred percent of the taxpayer's actual Colorado tax liability shown on the return of the corporation for the preceding taxable year. (B) Sub-subparagraph (A) of this subparagraph (II) shall not apply if the preceding taxable year was not a taxable year of twelve months or if the taxpayer did not file a Colorado return for such preceding taxable year.

# (c)

(I) If the taxpayer is a large corporation as defined in section 6655 of the internal revenue code, sub-subparagraph (A) of subparagraph (II) of paragraph (b) of this subsection (5) shall not apply; except that the first required installment set forth in paragraph (a) of subsection (4) of this section for any taxable year may be based on twenty-five percent of the taxpayer's actual Colorado tax liability shown on the return of the corporation for the preceding year and except that the first required installment set forth in paragraph (b) of subsection (4) of this section for any taxable year may be based on one-twelfth of the taxpayer's actual Colorado tax liability shown on the return of the corporation for the preceding year. Any reduction in the first installment pursuant to this subparagraph (I) shall be recaptured by increasing the amount of the next required installment. (II) For purposes of returns and estimated payments for the 2001 tax year, the limitation on the use of the preceding year's tax liability pursuant to subparagraph (I) of this paragraph (c) shall not apply.

# (d)

When the taxpayer has elected annualized installments or adjusted seasonal installments for the payment of federal income tax, the amount of the required installment pursuant to this section and the calculation of any addition to tax shall be determined under rules promulgated by the department of revenue.

# (6)

# (a)

(I) No addition to tax shall be imposed under subsection (3) of this section for any taxable year if the tax imposed under part 3 of this article shown on the return for such taxable year or, if no return is filed, the tax, is less than five thousand dollars. (II) No addition to tax shall be imposed under subsection (3) of this section for any taxable year if the tax imposed under article 29 of this title shown on the return for such taxable year, or if no return is filed, the tax, reduced by the credit allowable under section 39-29-111, is less than five thousand dollars.

# (b)

No addition to tax shall be imposed under subsection (3) of this section with respect to any underpayment to the extent the executive director determines that the underpayment was due to good cause shown by the taxpayer.

# (7)

# (a)

Except as otherwise provided in paragraph (b) of this subsection (7), for purposes of applying this section, the amount of the credit allowed pursuant to section 39-29-111 for the taxable year shall be deemed a payment of estimated tax and an equal part of such amount shall be deemed paid on each due date for such taxable year.

# (b)

If the taxpayer establishes the dates on which all amounts were actually withheld, the amounts so withheld shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld.

# (8)

# (a)

In applying this section to a taxable year beginning on any date other than January 1, the corresponding months shall be substituted for the months specified in this section.

# (b)

This section shall be applied to taxable years of less than twelve months in accordance with rules prescribed by the department of revenue.

# (9)

All of the provisions of this article, article 29 of this title, and article 21 of this title relating to the powers of the executive director for the administration, assessment, and enforcement of taxes required to be paid pursuant to said articles shall apply to the provisions of this section.

# (10)

The department of revenue shall prescribe such rules as may be necessary to carry out the provisions of this section. Such rules shall be promulgated in accordance with article 4 of title 24, C.R.S. Source: L. 64: R&RE, p. 791, § 1. C.R.S. 1963: § 138-1-70. L. 77: (1) and (10) amended, p. 1855, § 12, effective January, 1978. L. 81: (5) amended, p. 1865, § 7, effective June 8; (8)(b) and (10) amended, p. 1881, § 2, effective January 1, 1982. L. 2001: Entire section R&RE, p. 881, § 2, effective August 8. L. 2007: (4), (5)(a), IP(5)(b), and (5)(c)(I) amended and (5)(a.5) added, p. 1407, § 2, effective May 30. L. 2011: (4)(b) amended, (HB 11-1260), ch. 59, p. 155, § 2, effective March 25.