Colorado sporting-goods tax proposal: how funds are split

A proposed Colorado initiative would create a new state fund for protecting water, land and forests.

Here's which sporting-goods sales-tax revenue would be directed, how it would be divided and whether the annual amount could change.

How would the proposal redirect sporting-goods sales-tax revenue?

The initiative’s declaration says it would direct revenue from the existing state sales tax on sporting goods and equipment to conservation-related programs. The declaration says this would not raise taxes or change the cost of those goods.

Beginning July 1, 2027, the proposal would treat all state sales-tax revenue collected from certain sporting goods and equipment as a voter-approved revenue change exempt from the state fiscal-year spending limit. It would not affect the collection or spending of other revenue.

For the 2027-28 state fiscal year, the State Treasurer would transfer an amount equal to the revenue determined under the proposal from the General Fund to the Conserve and Protect Colorado’s Water, Land, and Forests Fund on July 1, 2027. Transfers would be scheduled for July 1 of each state fiscal year thereafter.

How would the proposal divide the revenue among its funds?

Money in the new fund would supplement, not replace, existing funding for the funds receiving it. The proposal would direct 47.5% to the Great Outdoors Colorado Trust Fund and 47.5% to the Colorado Wildfire Prevention and Water Fund.

The Outdoor Equity Fund would receive 2.5%. Another 2.5% would go to the Outdoor Recreation Economic Development Cash Fund for grants for purposes specified in statute.

Would the proposal guarantee the same amount every year?

No. The proposal would not guarantee the same amount each year.

For 2027-28, Legislative Council staff would determine the revenue amount no later than March 15, 2027. Staff would estimate taxable sporting-goods and equipment sales in Colorado using Census retail-trade sales data. Where Colorado product data were undisclosed, staff would use national product shares. Staff would multiply the estimated taxable sales by the state sales-tax rate.

For fiscal years beginning on or after July 1, 2028, Legislative Council staff’s quarterly December revenue forecast would determine an adjustment to the upcoming year’s amount. At a minimum, it would consider whether the underlying data had been updated, actual receipts for listed or successor product codes were available, or staff had prepared another reliable estimate of statewide sales-tax revenue from those products.

For those fiscal years, the amount would be subject to reduction if exempting it in full would reduce the credit amount available for either the Family Affordability Tax Credit or the Earned Income Tax Credit. The tax-credit test would be made in the December revenue forecast immediately before the applicable fiscal year, prepared by Legislative Council staff or the Office of State Planning and Budgeting. The choice would depend on which preceding March forecast the Joint Budget Committee used to prepare the state budget. The responsible office would calculate the maximum amount that could be exempted without reducing either credit.

Which offices would decide how the wildfire-and-water share is divided?

For 2027-28, after the revenue was transferred to the Colorado Wildfire Prevention and Water Fund, the State Treasurer would send $10 million to the Prescribed Fire Claims Cash Fund. The remaining money would be divided equally between two groups: the Forest Restoration and Wildfire Risk Mitigation Grant Program Cash Fund and the Healthy Forests and Vibrant Communities Fund; and the Wildfire Mitigation Capacity Development Fund and the Colorado Water Conservation Board Construction Fund.

The State Forester would determine the amounts for the first pair of funds. The executive director of the Department of Natural Resources would determine the amounts for the second pair.

For 2028-29 and each state fiscal year thereafter, the State Treasurer would credit half of the Colorado Wildfire Prevention and Water Fund’s money to the first pair of funds and half to the second pair. The State Forester would determine the amounts credited to each fund in the first pair, and the executive director of the Department of Natural Resources would determine the amounts for the second pair.