Taxpayer's Bill of Rights (TABOR) Information
1

TABOR

#FFFFFF

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.

#FFFFFF

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.

Senate Bill 22-233 directs the Department of Revenue to issue and mail advance refund payments of $750 to each qualified individual ($1,500 for individuals who filed jointly) beginning in August of 2022. More details about this program are available on the Colorado Cash Back web page.

If the TABOR surplus exceeds the cost of reimbursing local government property tax exemptions, and there is enough surplus to fund a temporary income tax rate reduction, then the State of Colorado temporarily reduces its income tax rate to 4.50%. The temporary income tax rate reduction applies to every individual, estate, trust, and corporation, as specified in Sections 39-22-104(1.7) and 39-22-301(1)(d)(I)(I) of the Colorado Revised Statutes.

The third refund mechanism can be triggered in two circumstances: 

  1. 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
  2. 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 claimed on the Colorado Individual Income Tax Return (DR 0104) as a means of returning sales tax revenue paid by 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 joint returns receive twice the refund amount as taxpayers who file single returns.
#FFFFFF

How the 2021 TABOR Surplus Will Be Refunded

The 2021 TABOR surplus was large enough to fund all three refund mechanisms, including the following two which are administered by the Department of Revenue: 

  • All taxpayers who file a 2021 income tax return will automatically receive the income tax rate reduction, from 4.55% to 4.50%. 
  • Eligible individual taxpayers may also receive a sales tax refund if they file a 2021 income tax return by October 17, 2022. For the six refund levels based on a taxpayer’s adjusted gross income, see the 2021 Individual Income Tax Return (DR 0104). Eligible full-year residents who do not have a Colorado income tax liability, and are not claiming a refund of wage withholding, must file a return by April 18, 2022.
  • Certain full-year residents may claim the state sales tax refund through the Property Tax/Rent/Heat Rebate Application in lieu of filing an income tax return.

How the 2022 TABOR Surplus Will Be Refunded

Eligible individuals who were full-year residents for 2021 and filed a 2021 Colorado Individual Income Tax Return (DR 0104) by October 17, 2022, will receive a direct prepayment refund through Colorado Cash Back (also known as the Temporary TABOR Refund Mechanism For FY 2021-22 Only).

How Prior TABOR Surpluses Were Refunded

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 TBD TBD
2021 Yes n/a Yes Yes
2020 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 will begin sending checks to Coloradans in August 2022 instead of the spring of 2023. For more information, visit the Colorado Cash Back web page