September 2024 Update
A general informational webinar on recent property tax law changes in the 2024 Special Session bill HB24-1001 and 2024 Regular Session bills SB24-233 and HB24-1302 is available as a recorded webinar online with slides. For specific guidance on how to comply with the recently adopted property tax information bill from the 2024 Regular Session, please visit the HB24-1302 Mill Levy Public Information page.
Understanding how the 5.5% Property Tax Revenue Limit Impacts Colorado Taxpayers
The statutory "5.5%" Property Tax Revenue Limit, also known as the "Annual Levy Law" (Section 29-1-301, et seq., Colorado Revised Statute) restricts the amount of total property tax revenue that a local government may collect each year. The limit applies to the amount of property tax revenue that is collected on a local government’s entire tax base. The 5.5% Limit does not apply to the tax bills of individual property taxpayers because the limit applies to the total property tax revenue collected on all property taxpayers in a local government. County Assessors can provide information on property valuation and local governments can provide information on property tax rates (i.e. “mill levies”).
Understanding the 5.5% Property Tax Revenue Limit
- The 5.5% Limit is not a TABOR limit found in Article X, Section 20 of the Colorado Constitution. (The Division of Local Government does not calculate or enforce TABOR limits.)
- The 5.5% Limit generally restricts the amount of total property tax revenue that a local government may collect each year to the previous year’s total property tax revenue plus 5.5% and plus allowances for growth. More information on the limit calculation is provided in the Calculation of the Revenue Limit section below.
- The 5.5% Limit applies to most statutory local governments that levy for property taxes.
- It does not apply to home-rule municipalities.
- The limit also does not apply to local governments that have successfully held a vote to waive the limit. (View a list of waived local governments.)
De-Bruced Local Governments Important Notice
“De-Brucing” is a broad term that describes a large variety of ballot languages that voters can approve to remove some TABOR spending and revenue limits from a local government. Each local government’s TABOR history and status can be unique and requires case-by-case legal review (usually by a local government or bond attorney).
In many cases, the same voter-approved ballot language might also waive the 5.5% Limit for the local government, but this depends on the ballot language. The Division cannot determine the local government’s TABOR status.
5.5% Limit Important Dates for Budgeting
- August 25 - County Assessors send preliminary certifications of valuation to local governments and the Division. The Division calculates a preliminary 5.5% Limit for subject local governments.
- October 15 - Budget officer submits proposed budget to the governing body of the local government.
- November 1 - Deadline for submitting application to the Division for an increased levy pursuant to 29-1-302, C.R.S. and applications for exclusion of assessed valuation attributable to new primary oil or gas production from the "5.5%" limit pursuant to (C.R.S. 29-1-301 (1)(b)).
- December 10 - Final certifications of valuation. Assessors’ changes in assessed valuation will be made only once by a single notification (re-certification) to the county commissioners or other body authorized by law to levy property tax, and to the Division. (C.R.S. 39-1-111(5)). The Division calculates a final "5.5%" limit for subject local governments.
- December 15 - Certification of mill levy to county commissioners [Form DLG 70]. NOTE: Budget must be adopted and appropriated prior to certification of levies.
- December 15 - December 22 - At the request of the Assessor, the Division will direct county commissioners to extend the levy of the prior year for local governments that did not certify the mill levy to the county.
- December 31 - Deadline to adopt budget for local governments not levying taxes.
- January 31 - Budgets due to the Division.
- April/May - The Division sends Notice to local governments that appear to have levied in excess of the 5.5% Limit.
- May/June - The Division sends Orders to reduce property tax revenue to local governments that have not resolved the Notice.
Calculation of the Revenue Limit
A spreadsheet is available to assist in calculating the statutory property tax revenue limitation, however, the Division also calculates the government's 5.5% Limit. This is done in August/September and again in November/December following the county assessors’ re-certification of valuation.
These reports will update each day with any changes processed by Division staff.
- DLG53 - Property Tax Revenue Limit Calculations
- DLG 53a Worksheet - Property Tax Limit Calculation Worksheet
- DLG 53a Instruction Sheet - What You Need to Calculate Property Tax Revenue Limits
Local governments should compare the "5.5%" limit with TABOR limits to determine which is the most restrictive property tax limitation.
Contact program staff listed below for assistance calculating the "5.5%" limit.
The preliminary calculations will be essential to the budget building process; however, the final calculations may require some adjustments prior to budget adoption and certification of mill levies.
Compliance
The Division has a statutory role in determining compliance with the "5.5%" limit (Colorado Revised Statute 29-1-301(6)). The Division sends annual notice in April or May to the taxing entities that appear to exceed the "5.5%" revenue limit. Where a taxing entity exceeds the limitation, the Division shall order a reduction in the authorized revenue of the taxing entity for the subsequent year in an amount which offsets the revenue in excess of the "5.5%" limit (Colorado Revised Statute 29-1-301(6)).
If a taxing entity’s electors have voted to “waive” the "5.5%" limit (Colorado Revised Statute 29-1-302(2)(b)), Division staff will review the ballot language and certified election results. After being deemed a sufficient waiver, the taxing entity will be notified that the Division will no longer calculate the "5.5%" revenue limit. This determination is not above legal challenge and does not find a taxing entity to be exempt from TABOR limitations or other limitations to the operating mill levy. A taxing entity must request that the Division review election results. Contact staff listed below for assistance.
Assessor Certification of Valuation
The Certification of Valuation (Form DLG 57) is used by the county assessor to certify a local taxing entity's values for property taxation purposes.
Contact Information
Victor Chen, Local Government Finance and Research Analyst
303-864-7757
victor.chen@state.co.us