A proposition to reduce Colorado’s property tax assessment rates will be on the November 2nd ballot. Colorado Rising State Action, the conservative group behind the measure, believes if it passes, it will result in a $1 billion property tax cut.
Proposition 120 asks voters to reduce the residential property tax assessment rate to 6.5% and commercial property tax assessment rate to 26.4%. It also allows the state to keep and spend $25 million in revenue per year for five years for local government reimbursements.
Prop 120 comes on the heels of a measure approved last year to repeal the 1982 Gallagher Amendment, which strictly dictated how property tax rates are assessed. Under Amendment B, the state’s residential rate was set at 7.15%. It kept the longstanding 29% assessment rate for commercial properties, which some opponents said was unfair.
The Colorado Legislature passed a bill just hours before the end of the last session that could undercut Prop 120.
Senate Bill 21-293 provides $200 million in property tax cuts for two years and changes the tax code classifications from two categories - commercial and personal property - to six classifications.
Property classified as agricultural property or renewable energy production property goes from 29% to 26.4%
For multi-family residential, the rate goes from 7.15% to 6.8%
All other residential real property goes from 7.15% to 6.95%
With these changes in property classifications, if Prop 120 passes, it will be based on outdated tax categories, which may lead to a lawsuit.