Colorado Property Tax Update Archive
Updated June 2013
Denver Property Owners Still Have Time to Protest Their Tax Valuations
Colorado real property tax notices of valuation are issued by the county assessors by May 1 of each year. The owner has until June 1 of that year to file a protest of that valuation, except for property within the City and County of Denver, Colorado. Beginning this year, Denver has elected to use a new Pilot Alternate Valuation Protest Procedure established by statute at Denver's request in § 39-5-122.8, C.R.S. that extends the protest filing deadline to November 15, 2013 for both real and business personal property.
Denver's stated objective in extending the protest period is to reduce or eliminate the undocumented, unsupported 'placeholder' protest filings by allowing the taxpayer to prepare and file more fully developed protests. Once the owner has developed the protest and is ready to meet with the Denver assessment staff, an appointment can be scheduled to discuss the merits of the protest and attempt resolution.
If a resolution cannot be reached in meetings, a hearing can be scheduled by the Board of County Commissioners with a 30-day written notice and opportunity to reschedule the hearing. The owner or its authorized representative may be required to be present at hearing. "Present" now includes optional telephone, audio and video conferencing. The penalty for not being present, absent good cause, is dismissal of the protest with no right of appeal.
Denver's new protest procedure does not change abatement options, deadlines or appeal rights. The taxpayer is still limited to a protest or petition for abatement but not both for the same tax year. Denver is just starting with this new pilot program and has not yet finalized rules under which it will be implemented. Please call us if you have questions on your property tax rights.
Larry R. Martinez, Esq.
Berenbaum Weinshienk PC
American Property Tax Counsel (APTC)
Updated March 2013
Property Tax Valuation
The 2013 Property Tax Season is upon us. Bi-annually, Colorado Assessors perform a revaluation for purposes of assessing the tax value of your property using a base year method. 2013 is such a revaluation year in which your County Assessor will re-assess the value of your real property. Given current economic conditions, many assessors may seek to raise values to generate more tax revenues.
Under Colorado law, this year's property tax values will be based on sales, income and cost data from a base period commencing January 1, 2011 and ending June 30, 2012. As a result of the change in the base year from 2009-2010 to 2011-2012, your new tax valuation for 2013 and 2014 property taxes may be higher, as property values for your area may have slightly increased during that period.
Beginning May 1, 2013, County Assessors will mail Notices of Valuation for the 2011 valuation. You will have a very short period of time to evaluate these notices and protest your taxes. Protests must be filed by May 31, 2013. Our attorneys know the critical legal and business factors that affect real property values and classifications. We are meeting with property owners to plan their strategies for the 2013 property tax protests.
Contact us now to set up a free initial analysis and evaluation to determine whether the 2013 revaluation will impact your property value and to discuss remedies that may be available to you. If you do not contact us now, be sure to contact us immediately upon receipt of your Notice of Valuation to discuss an effective and timely protest.
Please contact Ken Kramer at 303-592-8353 or Jim Kurtz-Phelan at 303-592-8323 or Larry Martinez at 303-592-8329.
Updated December 2012
Expect Tax Increases in 2013
The voters of many Denver metro area communities approved tax increases in the November 2012 election. Tax increases came in the form of school bond issues, mill levy overrides and de-brucing. Denver voted to reduce temporary property tax credits by four (4) mils. The Denver Public Schools passed a mill levy override of approximately 5 mils and a bond issue of approximately 3 mils. This will result in a 12 mil increase in the Denver mill levy.
The Cherry Creek School District passed a mill levy override equaling 5 mils, and a bond issue of one mil, for a total of a 4 mil increase in the mill levy.
The Jefferson County School District passed a mill levy override in the amount of approximately 6 mils. Taxpayers in these districts will see this increase in the tax bills which will be mailed after January 1, 3013.
Updated March 2012
Mandatory Disclosures for Taxpayers and County Assessors
Effective August 2011, Colorado property tax laws required mandatory disclosures for taxpayers and county assessors pursuant to C.R.S. § 39-8-107(5)(a)(I). The disclosures require the taxpayer to provide actual annual rental income, tenant reimbursement information, itemized expenses and rent roll data for the two years affected by the appeal. In exchange, the county is required to provide all of the underlying data used by the county in calculating the value of the subject property, and the names of any commercially available and copyrighted publications used in calculating the value of the subject property. The county's exchange is not automatic, but must be requested.
This rule has been effect for approximately six (6) months. During this period of time, the information shared by a county assessor has been very sparse. Assessors have provided nothing more than the information that it offered at hearings before their county's Board of Equalization in particular cases, together with a general listing of all sources of data which it uses in its office for rent, income and cap rates.
Updated June 2011
New Legislation Effective for Tax Year 2011
The Colorado legislature has passed new legislation requested by the state county assessors' offices, effective for tax year 2011. This new legislation requires disclosures within 90 days of the filing of a protest before the Board of Assessment Appeals for cases involving rent-producing commercial property. In the past, parties were not required exchange information regarding the facts of their appeals until ten (10) days prior to a hearing. The new legislation requires the taxpayer to disclose rent and expense reimbursement receipts, expenses and other relevant income and expense information, including rent rolls, for the two prior tax years.
The assessor, in exchange, must disclose both the data and the methods used to determine the actual value of such property. These provisions do not apply to residential apartment properties, which are defined by Colorado law as residential property. This new legislation is intended to have the affect of limiting the filing of appeals to the Board of Assessment Appeals to only those cases which taxpayers are willing to disclose all of the pertinent financial information of the property. In the past, taxpayers have had the luxury of filing a protest without disclosing information, attempting instead to negotiate a plea agreement with the taxing authority prior to spending any time or effort in producing documentation.
Under this new legislation, the taxpayer must determine if it wants to spend the resources in prosecuting its case much earlier in the process. This process will have a chilling effect on the fining of cases by Property Owners.
Updated September 2010
Will Tiger’s Tale Lower Property Taxes
Recently a friend of mine mentioned that he never liked Tiger Woods. Since Tiger’s popularity, my friend found it more difficult to schedule tee times at his golf club. We have all heard how Tiger Wood’s success in golf has spurred on a new generation of golfers.
Private golf courses are taxed, among other ways, based upon income generated. As golf’s popularity increased, so did golf course revenue and golf course value (to the extent that the value was separated from the value of the homes surrounding the golf course). Now that Tiger Wood’s reputation has suffered, many are speculating that many of his endorsements will be withdrawn. Some are also speculating that the popularity of golf will wane was well. Consequently, revenue to golf courses may decline which should translate to a decrease in value of golf courses. Lower value should equal lower taxes.
Updated September 2009
Property Tax Abatement
Do you regret not protesting your property taxes? Although you may have elected not to file a protest of your taxes this past May, all is not lost. Colorado allows the proverbial "second bite at the apple" – an abatement process.
On May 1st, the County Assessor mailed out Notices of Valuation for the 2009 property taxes payable in 2010 and 2011. Protests were to be filed by May 29, 2009. If a protest was not filed by that time, the protest was forever precluded. Because the Colorado statutory system provides two ways to dispute taxes levied if you believe the tax assessment on your property is incorrect, you may still file an abatement under C.R.S. § 39-5-10-114. Under this abatement scheme, you must pay the taxes in advance and then request a refund. An abatement is available if the property taxes have been levied erroneously or illegally, through error in assessment, irregularity in levying, clerical error, or overvaluation. The abatement and refund procedure is not available, however, for tax payers that have already protested their taxes. While a protest must be filed in a very short period of time, the time limit for filing an abatement is within two years after January 1st of the year following the year in which the taxes were levied. If you wish to file an abatement for the most recent tax assessment, you must wait until January 1, 2010 to do so. This two-year limitation period also allows you to file an abatement for your 2007 taxes payable in 2008 and your 2008 taxes payable in 2009, if you feel you were over assessed and did not protest your taxes in 2007 or 2008.
Like the protest process, the property tax values for the 2009/2010 abatement will be based on the sales, income and cost data from a base period commencing January 1, 2007 and ending January 30, 2008. If you wish to seek an abatement for taxes from 2007 and 2008, the base period was January 1, 2005 through June 30, 2006.
Contact us now to set up a free initial analysis and evaluation to determine whether the filing of a tax abatement is warranted.
Updated June 2009
Colorado Assessors Report Less Cases Filed than Originally Anticipated
Colorado just completed the filing process for tax protests of the 2009-2010 reassessment for real property tax valuations. Although most taxpayers were initially concerned that their real property valuations rose during what most people consider bleak economic times, upon further education, most taxpayers realized that under the Colorado Real Property Tax System, taxes were generally assessed correctly. Under Colorado law, real property taxes are assessed in arrears. The base period used for 2009 and 2010 taxes was January of 2007 through June 30, 2008. The Assessor's Offices are taking the position that the current economic downturn did not commence until the third quarter of 2008 and, therefore, was not considered. Most Assessor's Offices have concluded that the volume of cases filed is less in 2009 than they anticipated because the Assessor's Offices spent a great deal of time educating taxpayers on the assessment base period. If you missed the tax protest deadline of June 1, 2009, you may still be eligible to file a tax abatement on January 1, 2010.
Updated December 2008
Is A Private Prison Residential Property?
Should a private prison be taxed as residential property under Colorado property taxation law? Colorado provides an alternate tax rate for residential property. The commercial assessment rate is 29% of market value, whereas residential property is currently taxed at 7.96% of market value. Several private prison companies have established private prisons and one has contracted with the State of Colorado to operate prisons on behalf of the State. Currently these prisons are taxed at the commercial rate.
Colorado law defines residential improvements as "a building, or that portion of a building, designed for use predominantly as a place of residency by a person, a family, or families. C.R.S. 39-1-102(14.3) Houses, along with apartment buildings and nursing homes fall within this definition. It is reasonable to conclude that a prison should also fall within this definition and receive the benefit of the residential tax rate. The savings would be enormous to the taxpayer.
Updated September 2008
Have Taxes Really Increased Over The Last Decade?
Have taxes in the Denver metropolitan area increased or decreased over the last decade. While several people complain that prices for goods and taxes have been increasing, taxes in the City and County of Denver have actually declined since 2000. Taxes for real estate in Colorado are based not only upon the market value of the property but the mil levy of a particular taxing jurisdiction. In the City and County of Denver, the mil levy has decreased since the year 2000. In 2000, the levy was 67.321 mils. In the year 2008, the current mil levy for the City and County of Denver is 66.897. While close, the current mil levy is one-half of one percent lower than it was eight years ago. These are the rates of the past eight years: 67.321 (2000), 58.745 (2001), 59.855 (2002), 64.162 (2003), 64.402 (2004), 66.202 (2005), 66.948 (2006).
Updated March 2008
Attention-grabbing Case Study
Red Junction, LLC vs. Mesa County Board of County Commissioners, the Colorado Court of Appeals affirmed a final Order of the Board of Assessment Appeals, affirming the denial of the Board of County Commissioners of a second abatement-refund petition by a property owner in one tax year. The Court held that subsequent abatement petitions for a given property for the same tax year are barred by claim preclusion. Nothing in the Property Tax Statutes either authorizes or prohibits multiple petitions in any given year. However, the Court holds that the policy behind the doctrine of claim preclusion justified its application to this type of administrative proceeding. The Court agreed with the BAA that the tax payer could have adjudicated all of its claims in the initial Petition.
Updated September 2007
"In the Wild West in Colorado, Even Bees are Grazing Animals"
Under Colorado law it is advantageous to have real property classified as an agricultural use because the real property taxes are significantly less than vacant land or commercial property. Land can be classified as agricultural if it is used as either a farming or ranching operation. If the apiary is used simply to manufacture honey, then the use may not qualify as agricultural. On the other hand, if it can be shown that bees "graze" on the land (as opposed to just making honey), then the land will be classified as agricultural and be eligible for the reduced taxes.
For an animal to be a "grazing animal," it must: need veterinary services; be provided food and shelter; be bought and sold; be susceptible to branding; not be the property of the state; intended to serve humans.
