Tax Exemption Changes for Colorado Nonprofit Childcare Centers

House Bill 22-1006 expands property tax exemption for property integral to a qualifying charitable, nonprofit child care center by removing the property ownership requirement. When the law goes into effect, property that is rented, leased, or otherwise not owned by the child care center operator can become tax exempt if the child care center otherwise qualifies.

What is the Timeline

The change affects taxes due in 2024. Applicants can begin applying in January 2023.

Who Will Qualify

Property integral to a qualifying child care center, but which is not owned by the child care center, can qualify for tax exemption if the child care center otherwise qualifies, § 39-3-110, C.R.S.

Qualification Requirements

• In order to qualify, the applicant must meet all of the following requirements:
• The applicant must be a “Child care center” as defined at 26-4-102, C.R.S.
• The child care center must be licensed by the Department of Early Childhood.
• The property must be used solely and exclusively for strictly charitable purposes. 
• The center must provide services free or at reduced rates to an indefinite number of people.
• It must charge based on ability to pay or make tuition assistance available to the financially needy.
• The amount of free/reduced tuition must meet certain annual minimum requirements.
• The center’s operation must not benefit individuals except as reasonable compensation.
• The property owner must sign the application and provide any requested information.

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