S Corps & Partnerships that meet Rule 39-22-301(1) must file Colorado DR 0106. If your S Corp or Partnership was organized or commercially domiciled in Colorado, among others, then it must file DR 0106. CRS 38-22-201(1).
The DR0106 effectively captures Colorado state income tax on nonresident shareholders and partners. In additional, in enables taxpayers who wish to use the SALT Parity Act.
Colorado House Bill 23-1277, “CONCERNING THE FILING OF INCOME TAX RETURNS BY BUSINESS ENTITIES” made changes to CRS 39-22-601.
The good news is that pursuant to CRS 39-22-302, “An S corporation shall not be subject to taxation under this article.” However, nonresident shareholders are subject to Colorado income tax. In the instance where an S Corp or Partnership has Colorado nonresidnet shareholders it generally must pay income tax on their behalf. They could also file an agreement.
Pursuanr to CRS 39-5-102, county assessors must beam a list of nonresident property owners to the Colorado Department of Revenue (CDR). If the nonresident is running a short term rental, you could be sure they will get notice from the CDR. If the nonresident is a shareholder of an S Corp, the CDR can then file a DR 0106 and assess tax. There is also a hefty penalty for nonpayment of Colorado tax that surely will be applied.
There is a new focus to tax nonresidents of Colorado income. This focus is emobodied in the changes to 39-22-601.
Monthly Archives: December 2025
Missing IRS Refund
If you did not receive IRS refunds, check the refund status here: https://www.irs.gov/wheres-my-refund.
If you are sure about the missing refund, you need to start a refund trace by calling and speaking to an IRS agent 800-829-1040. You could also fill out IRS form 3911. You could fax the form to the appropriate number here: https://www.irs.gov/forms-pubs/about-form-3911.
You should place an identity protection pin on your file with an agent.
The real problem with Colorado graduated tax proposal
The real problem with the Colorado graduated tax proposal is that it converts a Colorado Constitution limitation to a statutory enablement.
The proposal would permit the Colorado legislature to increase taxes on income at any time. This would be very dangerous for the State of Colorado. The proposal deletes a key provision of the Colorado Constitution that limits the Colorado legislature from changing the approximate 4.5% tax rate. The Colorado Constitution provision that would be deleted is as follows: “Any income tax law change after July 1, 1992 shall also require all taxable net income to be taxed at one rate, excluding refund tax credits or voter-approved tax credits, with no added tax or surcharge.”
Once deleted, the Colorado legislature could raise the tax rate as they see fit. The proposal entices voter approval of the key Constitution provision by proposing a tax cut on approxamately 98% of Coloradans. Yes this is enticing. However, going forward the legislature could raise taxes on those 98% at any time since the key Colorado Constitutuion would be gone forever.
As such, the proposal enables the Colorado legislature to tax at will, while deleting the Colorado Constitution limitation to tax.
Whether you are for or against this is up to you. You decide.