History of TABOR
The Taxpayer's Bill of Rights (TABOR) Amendment was approved by voters in 1992. This amendment to the Constitution of the State of Colorado generally limits the amount of revenue governments in the state can retain and spend. Absent voter approval, it requires excess revenue to be refunded to taxpayers. TABOR also requires voter approval for certain tax increases. The state TABOR revenue limit is generally equal to the prior fiscal year's limit plus the rate of inflation and population growth in Colorado, subject to a voter-approved floor. For more information about TABOR, visit the Legislative Council TABOR web page.
TABOR Refund
Ways the TABOR Surplus Can Be Refunded
When state revenue is above the TABOR limit, the surplus is currently refunded to taxpayers in the following ways prescribed by state statute. For more information, see the Legislative Council Staff memorandum on the History of TABOR Refund Mechanisms.
Senate Bill 17-267 mandates that the State of Colorado reimburse local governments for any property tax exemptions claimed by local seniors and disabled veterans. When there is surplus revenue above the TABOR limit, the Colorado Department of the Treasury must first use the surplus funds for this reimbursement. For more information, visit the TABOR Information for Local Governments web page.
Prior to tax year 2022, the Colorado income tax rate could be temporarily reduced to 4.50% if there was enough TABOR surplus. However, starting with tax year 2022, voters permanently reduced the income tax rate to 4.40%, as specified in Sections 39-22-104(1.7)(c) and 39-22-301(1)(d)(I)(K) of the Colorado Revised Statutes.
This refund mechanism can be triggered in two circumstances:
- When there is excess revenue after reimbursing local governments for property tax exemptions, but not enough to fund a temporary income tax rate reduction; or
- When there is excess revenue after funding both the local government property tax exemption reimbursements and the temporary income tax rate reduction.
Despite being called a sales tax refund, the refund is generally claimed on the Colorado Individual Income Tax Return (DR 0104) as a way to return sales tax revenue paid by full-year resident individuals.
- If the amount to be refunded is more than $15 per taxpayer, the refund has six different levels based on a taxpayer's adjusted gross income.
- If the amount to be refunded is $15 or less per taxpayer, an equal refund is allowed to each taxpayer regardless of income.
- Taxpayers who file a joint return receive twice the refund amount as a taxpayer who files a single return.
Individuals who died during the tax year but meet the filing requirements, including on an estate or joint return, are allowed a sales tax refund.
Individuals who were either incarcerated or committed to the Department of Human Services for 180 days or more during the state fiscal year (July-June) that ended during the tax year are not allowed a sales tax refund.
Senate Bill 22-233 authorized a one-time refund of $750 to each qualified individual ($1,500 for individuals who filed jointly) between August 2022 and January 2023. More details about this program are available on the Colorado Cash Back webpage.
2022 TABOR Refund from DOR
The Department of Revenue (DOR) is administering the following 2022 TABOR refund mechanisms, primarily through the Colorado Individual Income Tax Return (DR 0104):
Tax Rate Reduction — As noted above, the temporary TABOR income tax rate reduction has been superseded by a permanent income tax rate reduction.
Sales Tax Refund — Eligible 2022 full-year residents may claim this refund by filing in the manner described below by the appropriate deadline. See the 2022 DR 0104 for the six refund levels.
- File a 2022 DR 0104 by October 16, 2023, if you:
- have a Colorado income tax liability, or
- claim a refund of wage withholding.
- File a 2022 DR 0104 by April 18, 2023, if you:
- were at least 18 years old when the tax year began,
- do not have a Colorado income tax liability, and
- are not claiming a refund of wage withholding.
- Certain residents may file a 2022 Property Tax/Rent/Heat (PTC) Rebate Application by April 18, 2023, in lieu of filing an income tax return.
Colorado Cash Back (Senate Bill 22-233) — Eligible 2021 full-year residents who filed a 2021 DR 0104 by October 17, 2022, will receive a refund by January 31, 2023.
2021 TABOR Refunds from DOR
The Department of Revenue (DOR) administered the following 2021 TABOR refund mechanisms:
Tax Rate Reduction — All taxpayers who filed a 2021 income tax return automatically received the temporary income tax rate reduction from 4.55% to 4.50%.
Sales Tax Refund — Eligible 2021 full-year residents could have claimed a sales tax refund if they filed a 2021 DR 0104 by April 18 or October 17, 2022, or a PTC Rebate Application by April 18, 2022.
All Recent TABOR Refunds
The table below shows how TABOR surpluses were refunded in recent tax years.
|
TABOR Surplus Year
(State Fiscal Year Ending June 30)
|
Property Tax Reimbursement | Colorado Cash Back (Senate Bill 22-233) |
Income Tax Rate Reduction | Sales Tax Refund |
|---|---|---|---|---|
| 2022 | Yes | Yes | n/a | Yes |
| 2021 | Yes | n/a | Yes | Yes |
| 2019 | Yes | n/a | Yes | No |
| 2018 | Yes | n/a | No | No |
Frequently Asked Questions
Property tax exemptions are administered by your local government. Contact your local County Assessor’s Office for more information about senior and disabled veteran property tax exemptions. The Colorado Department of Local Affairs maintains a list with contact information for each County Assessor's Office in Colorado.
A TABOR income tax rate reduction results in either a larger refund, if the taxpayer over-withheld, or a smaller bill, if the taxpayer did not withhold enough or make enough estimated tax payments that year. The refund amount is different for each taxpayer, based on their unique income tax situation.
Visit the TABOR Information for Local Governments web page for more information.
The Colorado Cash Back rebates are an early refund of the fiscal year 2021-22 TABOR surplus. On May 23, 2022, Gov. Jared Polis signed a new law (Senate Bill 22-233) to give Coloradans a tax rebate of $750 for individual filers and $1,500 for joint filers. Under this new law, the Department began sending refunds to Coloradans in August 2022 instead of the spring of 2023. For more information, visit the Colorado Cash Back web page.