HB 22-1109

HB 22-1109, which has been signed into law, provides a sales tax exemption for aircraft used by on-demand air carriers in Colorado. This means that companies authorized by the federal aviation administration to operate aircraft for transporting people or property will not have to pay state sales and use taxes on these aircraft for seven years starting from January 1, 2023. The law also requires the aeronautics division to report to the state auditor about how effective this exemption is. This bill primarily benefits companies that provide air transportation services on demand, reducing their operational costs by exempting them from certain taxes.

Official Summary

For 7 years beginning on January 1, 2023, the bill creates a sales and use tax exemption for the sale, storage, use, or consumption of an aircraft used or purchased for use in interstate or intrastate commerce by an on-demand air carrier. An on-demand air carrier is an entity authorized by the federal aviation administration to operate an aircraft to transport people or property in compliance with the administration's certification and operations requirements. The aeronautics division in the department of transportation is required to provide the state auditor with any available information that would assist the state auditor's measurement of the effectiveness of the exemption. The bill specifies that a statutory town, city, or county may exempt the same items only by express inclusion of the exemption in its initial sales tax ordinance or resolution or by amendment thereto and also that the exemptions do not apply to the tax imposed by a special district or other limited purpose governmental entity. (Note: This summary applies to this bill as introduced.)

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