COLORADO DEPARTMENT OF REVENUE
STATEMENT OF BASIS AND PURPOSE
Re: Regulation 39-29-106 Rate of Tax on Coal
(1 CCR 201-10 Severance Tax) – Amended.

Basis:

The statutory basis for this regulation is §39-21-112 (1) and §39-29-106, C.R.S.  

Purpose:

The purpose of this amendment is to update the existing regulation to reflect the base rate set forth in §39-29-106, C.R.S. and to implement rate adjustments as required by statute.  For quarters beginning on or after December 1, 1992, the department discontinued making rate adjustments because the department erroneously assumed that article X, section 20 of the Colorado constitution (Taxpayer Bill of Rights “TABOR”) prohibited rate adjustments after the effective date of TABOR.  However, the Office of the Attorney General recently advised the department that the coal tax adjustment mechanism does not violate TABOR.  The adjustment mechanism was enacted before the effective date of TABOR and the adjustments post-TABOR would merely be the ministerial operation of this pre-TABOR law.