Colorado Governor Jared Polis signed the Colorado Cashback Plan into law on May 23, a bill that will issue most Coloradans tax refunds by Sep. 30, instead of spring 2023.
Senate Bill 22-233, the TABOR Refund Mechanism for FY (Fiscal Year) 2021-22 Only, sponsored by Sen. Nick Hinrichsen, Sen. Robert Rodriguez, Rep. Tony Exum and Rep. Lyndsey Daugherty, concerns an additional mechanism to refund excess state revenues for the state fiscal year 2021-22 only.
If the state exceeds its constitutional spending limit, then it is required by the Taxpayer’s Bill of Rights (TABOR) to refund the excess state revenues. There are currently three TABOR refund mechanisms: reimbursement to counties for the senior homestead exemption, a temporary income tax rate reduction and a sales tax refund.
Touting the strength and growth of Colorado’s economy, Polis reported that the state has recovered more jobs than those lost during the pandemic, and subsequently revenue will exceed spending limits under TABOR by approximately $1.4 billion.
Thus, the legislature has to decide upon asking voters to keep those additional funds or issue a refund.
For those who file their 2021 income tax returns by June 30, 2022, individual filers will receive $500 checks and joint filers will receive $1,000 checks. It is estimated that 3.1 million residents will receive this payment.
“People are paying more for everyday items like gas, groceries, and rent through no fault of their own. Instead of the government sitting on money that Coloradans earned, we want to give everyone cashback as quickly and easily as possible to provide immediate relief and empower people to do what they want to with their money,” said the governor in an emailed release.
The governor further emphasized the necessity of providing cashback to Coloradans.
“We are providing immediate relief for hardworking Coloradans by sending rebate checks back quickly because there’s no reason the government should hold onto your hard-earned money any longer than it has to,” Polis added.
To receive the Colorado Cash Back, an individual must be at least 18 years of age prior to December 31, 2021, be a Colorado resident for the entire 2021 income tax year, and file a state income tax return for the 2021 income tax year or receive a property tax, rent or heat credit rebate.
“This is really important because costs have gone up. And we want to make sure Coloradans can hold on to more of their hard-earned money. Whether it’s gas, whether it’s groceries, this is a really important lifeline for Coloradans that will make a big difference for every Colorado family,” said Polis.
The tax rebates could grow if May’s revenue figures indicate continued growth.
