Refund for property used in rural broadband service - legislative declaration - tax preference performance statement - definitions - repeal

# (1)

# (a)

The general assembly finds and declares that: (I) Expanding access to wireless and other communication services is critical to the economic and social well-being of Colorado's residents and businesses. Reliable communications infrastructure supports education, health care, workforce development, and economic competitiveness. (II) Colorado receives ongoing federal funding of more than one billion dollars to facilitate broadband deployment to unserved and underserved households in the state; (III) Requiring communications providers to pay sales and use taxes on federal-funded and state-funded deployment is counterproductive, because it reduces the efficacy and impact of these grants by effectively taxing money intended for communications expansion and creating a structural inefficiency; (IV) The purpose of this section is to update and streamline the administration of the existing sales tax rebate for broadband infrastructure enacted in 2014. This section ensures that tax relief is more efficiently delivered, more effectively targets areas of Colorado in need of communication services, and eases the administrative burden on communications providers that apply for the existing rebate program. (V) Wireless telecommunications technologies, while seemingly independent, critically rely on forms of broadband like fiber and landline networks for essential functions, such as backhaul, which connects cell towers to the internet backbone and which is often performed by nonwireless providers. Therefore, the policies that impact broadband infrastructure must consider the interconnectedness of all technologies, including the dependence of wireless telecommunications on the broader ecosystem, to ensure effective and comprehensive wireless and broadband access for all Coloradans.

# (b)

Pursuant to section 39-21-304, the general assembly adopts the following tax preference performance statement for the exemption created in this section: (I) The sales and use tax exemption established in this section is intended to: (A) Eliminate the structural inefficiency associated with taxing broadband deployment grants; (B) Streamline the administration of tax relief for providers; and (C) Incentivize private sector investment in infrastructure; and (II) The effectiveness of this tax expenditure shall be measured by: (A) The total amount of private and public investment in broadband infrastructure within Colorado, including infrastructure financed in part by state and federal grants; (B) The extent to which broadband providers utilize the exemption to increase the efficiency of broadband deployment and to reduce project costs; and (C) The amount by which administrative burdens on broadband providers are reduced, including the number of entities utilizing the sales tax refund compared to those previously applying for the sales tax refund.

# (2)

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

# (a)

Broadband provider means a person that provides broadband service.

# (b)

Broadband service means any communications service having the capacity to transmit data to enable a subscriber to the service to originate and receive high-quality voice, data, graphics, and video at speeds of at least four megabits per second for download and one megabit per second for upload or the federal communications commission's definition of broadband service, whichever is faster.

# (c)

Target area means the unincorporated part of a county or a municipality with a population of less than thirty thousand people, according to the most recently available population statistics of the United States bureau of the census.

# (3)

Except as provided in subsection (5) of this section, for the calendar year commencing January 1, 2014, and for each calendar year thereafter prior to January 1, 2027, a broadband provider is allowed to claim a refund of all the state sales and use tax the provider pays pursuant to parts 1 and 2 of this article 26 for tangible personal property that is installed in a target area for the provision of broadband service.

# (4)

To claim the refund allowed by subsection (3) of this section, a taxpayer must submit a refund application to the department of revenue, on a form provided by the department, no earlier than January 1 and no later than April 1 of the calendar year following the calendar year in which the tax is paid. Along with the application, the taxpayer must provide proof of the state sales and use taxes paid by the broadband provider in the immediately preceding calendar year and proof that the tangible personal property was deployed in a target area for the provision of broadband service. A taxpayer must also provide any additional information with the application that the department of revenue requires by rule, which may include, without limitation, a detailed list of all expenditures that support a claim for a refund, the name and addresses of an individual who maintains records of such expenditures, and a statement that the taxpayer agrees to furnish records of all such expenditures to the department of revenue upon request. The department shall not refund any moneys to a taxpayer unless the taxpayer has complied with this subsection (4).

# (5)

The total amount of the refunds made under this section may not exceed one million dollars for a calendar year. The department of revenue shall not pay a refund for a calendar year until after the application deadline set forth in subsection (4) of this section has passed. If the total amount of approved refunds exceeds one million dollars, the department shall prorate the refunds made to all taxpayers.

# (6)

This section is repealed, effective December 31, 2030. Source: L. 2014: Entire section added, (HB 14-1327), ch. 149, p. 510, § 7, effective August 6. L. 2024: (1) and (3) amended and (6) added, (HB 24-1036), ch. 373, p. 2531, § 21, effective August 7. L. 2025: (1) amended, (HB 25-1080), ch. 317, p. 1659, § 4, effective August 6. Cross references: (1) For the short title (Broadband Deployment Act) in HB 14-1327, see section 1 of chapter 149, Session Laws of Colorado 2014. (2) For the legislative declaration in HB 24-1036, see section 1 of chapter 373, Session Laws of Colorado 2024. PART 2 USE TAX Cross references: For the use of a method in lieu of any required oath or affirmation by a person making any return or any application for refund or protest pursuant to this part 2, see § 24-12-108. Law reviews: For article, Colorado and the 'Amazon Tax'--Recent History, see 41 Colo. Law. 43 (June 2012).