Colorado State Sales Tax Refund

May, 31 2024 by Carolyn Richardson, EA, MBA

I received a letter stating I do not qualify for the state tax because my return was submitted after the deadline....I have the timestamp but don't know how to send it.

Juanita, CO


Hello Juanita,

Thank you for contacting TaxAudit regarding your letter from Colorado stating you do not qualify for a refund because your return was filed after the deadline. While you referred to just the “state tax” in your question, we assume you are referring to the 2023 state sales tax refund, as there was a special provision enacted by the Colorado legislature for 2023 returns only, allowing a flat amount to be refunded to residents of Colorado.

In a special session of the 74th General Assembly in Colorado, the legislature enacted a temporary change for the 2023 refund under the Taxpayer’s Bill of Rights (TABOR), which was originally approved by voters in 1992. Under the Colorado TABOR, the state constitution limits the amount of revenue that the government can retain and spend. Any excess must be returned to the taxpayers in the form of a refund when taxpayers file their state tax returns. Generally, the amount of your TABOR refund is calculated by adding together the taxpayer’s federal adjusted gross income (AGI) and adding back any nontaxable social security benefits and nontaxable interest income from state and local bonds excluded from their federal AGI.

For 2023, SB23-B adjusted the TABOR refund mechanism for the 2023 tax year only. For 2023, eligible taxpayers may claim a refund of $800 for all qualifying individuals ($1,600 for two qualifying individuals who file a joint return). To qualify for this refund, you must otherwise meet the requirements under the general TABOR law, as there were no other changes to the provisions for 2023. Qualifying individuals must be eligible for a state sales tax refund. Certain taxpayers must file their 2023 Form DR 0104, Colorado Individual Income Tax Return, by April 15, 2024. These taxpayers:

• Were at least 18 years old when the tax year (2023) began,
• Do not have a Colorado income tax liability,
• Are not claiming a refund of wage withholding, AND
• Are not otherwise required to file a Colorado return because they have no federal filing requirement.

In other words, if you were at least 18 years old as of January 1, 2023, and did not have a Colorado filing requirement or were not filing your return for the sole purpose of claiming a refund for Colorado state taxes withheld, you needed to file your return by April 15, 2024, in order to claim the 2023 Sales Tax Refund.

Most Colorado taxpayers have until October 15, 2024, to file their 2023 Form DR 0104. These taxpayers:

• Have a Colorado income tax liability,
• Are claiming a refund of wage withholding, OR
• Are required to file a Colorado return because they are required to file a federal return.

If you are under the age of 18 as of January 1, 2023, and have a Colorado tax liability or are claiming a refund of withholding on a W-2, you must file your individual income tax return by October 15, 2024.

You stated that you have a time stamp, and we assume you mean that to be the time that the return was filed. Keep in mind that the IRS and the state tax agencies consider midnight, i.e., 12:00 AM, to be the first minute of the next day. For example, if you filed your return on April 15 with a time stamp of 11:59.59 PM, it would be a timely return, but a return filed at 12:00:00 AM would be considered filed on April 16. This is a good example of why it’s important to not wait until the last minute to file your return, as even a split second can make you late. This is also critically important if you ever need to file a petition with the federal Tax Court, as their online system will consider any filing that occurs on midnight Eastern time of the last day to be late.

If your time stamp does indicate that you filed on April 15 before midnight, we recommend you contact the Colorado Department of Revenue’s Taxation division to ask how to challenge the disallowance of your state sales tax refund. Remember, if you meet the qualifications listed above, you have until October 15, 2024, to file your return and receive the 2023 Sales Tax Refund. Their taxpayer helpline can be reached at 303-238-7378, and their hours are Monday through Friday, from 8:00 a.m. to 4:30 p.m. MT.

We hope this answers your question.

Sincerely,
Carolyn Richardson, EA, MBA