Colorado Practice and Procedure

Colorado follows the Internal Revenue Code on a rolling basis and then departs from it deliberately: statutory modifications, a combined reporting regime rebuilt in recent years, and market-based sourcing that assigns service receipts to where the customer is. The conformity is the starting point, and the departures decide the answer. This hub collects the questions that recur for businesses and investment structures touching the state.

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Income and franchise procedure

How does Colorado tax a REIT and its taxable REIT subsidiary?Colorado's rolling conformity to the Internal Revenue Code lets the federal REIT dividends paid deduction flow through to a genuine real estate investment trust, but a standalone captive REIT statute strips that benefit from a closely held REIT owned by a single non-exempt corporation. The taxable REIT subsidiary gets no such conduit treatment and is apportioned on its own under Colorado's market-based sourcing rules. This article works through conformity, the captive REIT rule, combined reporting, apportionment, dividends received treatment, and the nexus questions that come with holding Colorado real estate through a partnership.