On September 8, 2026 the Colorado District Court ruled that the county’s tax assessments of leasehold improvements at a state‑owned airport were invalid. The decision interprets Colorado Revised Statutes §§ 39‑22‑101 et seq. to require explicit legislative authority for such valuations. The lessee of the airport improvements is relieved of the disputed tax liability, while the county loses the asserted taxing power. The ruling also limits future county assessments of leasehold interests lacking a statutory grant.

Full News Breakdown

The dispute originated when the county issued tax bills for capital improvements made by a private lessee under a long‑term airport lease. The lessee contended that the assessments exceeded the county’s statutory authority, prompting a petition for declaratory relief. The court ultimately held the assessments unlawful.

• Court: Colorado District Court

• Date: September 8, 2026

• Statutes Cited: Colorado Revised Statutes §§ 39‑22‑101 et seq.

• Primary Legal Issue: Whether a county may assess taxes on leasehold improvements at a state‑owned airport absent explicit statutory authority

• Petitioner Arguments: The county’s assessments lack statutory authority and conflict with established Colorado tax‑law precedent

• Respondent Arguments: The county asserts a general power to tax leasehold improvements within its jurisdiction

• Holding: The court declared the county’s tax valuations invalid

• Operative Order: Vacated the assessed tax amounts and barred further collection on the improvements

• Practical Outcome: The lessee is relieved of the disputed tax liability

How Does This Affect You?

Before the decision, practitioners were unsure whether counties could impose taxes on leasehold improvements without a clear statutory grant. The court now requires that any such assessment be grounded in explicit legislative authority under the state tax code. As a result, lessees can more readily challenge similar county tax bills and counties must verify statutory support before issuing assessments. This shift informs the advice we provide to clients, the drafting of lease agreements, and corporate tax‑compliance programs.

For Lawyers & Advocates

• Review all active lease agreements for a tax‑allocation clause and, where absent, draft an amendment obligating the lessor to obtain a written determination of tax liability before passing any assessment to the lessee.

• Conduct a statutory‑authority analysis under CRS §§ 39‑22‑101 et seq. for any county tax bill relating to leasehold improvements, and prepare a protest or declaratory‑relief petition within the statutory filing deadline.

• Cite this decision as persuasive authority in motions to vacate or stay municipal tax assessments in other Colorado jurisdictions, emphasizing the court’s interpretation of the limitation doctrine.

• Advise clients that the ruling reduces the risk of retroactive tax assessments but does not eliminate exposure where the county can point to a specific statutory provision; continue monitoring for legislative amendments that could create new authority.

• Update internal tax‑compliance checklists to include a step verifying that each municipal assessment of leasehold improvements references a statutory provision, and flag any that do not for immediate review.

For Law Students

This case illustrates how Colorado courts apply strict statutory construction to limit municipal taxation powers. The controlling doctrine is the requirement of explicit legislative authority for tax assessments of leasehold interests.
The decision is particularly relevant for the study of:

• State and local taxation law

• Municipal authority and statutory interpretation

• Leasehold improvement taxation

• Colorado statutory construction principles

• Administrative law and tax assessment procedures
  Comparing Colorado Taxpayers Association v. City of Denver (2020) and Miller v. City of Aurora (2018) shows how courts distinguish between general taxing power and specific statutory grants, clarifying the boundary of municipal authority.

For Businesses

• Airport operators with leasehold improvements should audit all tax bills and ensure lease contracts contain a tax‑allocation provision, otherwise they risk unexpected liabilities.

• Real‑estate investment firms leasing property in Colorado municipalities must add a statutory‑authority review to their due‑diligence checklist before closing, to avoid post‑closing tax disputes.

• CFOs should direct finance teams to monitor county tax assessor notices for leasehold improvements and, if lacking statutory citation, prepare objections before the assessment becomes final.

• Boards should require periodic compliance reviews of all lease‑related tax assessments to confirm statutory grounding, preventing surprise obligations that could affect financial statements.

Key Takeaways

• Colorado law now requires explicit legislative authority for counties to tax leasehold improvements, eliminating the prior ambiguity.

• Tax counsel must add a statutory‑authority check to every lease‑related tax assessment and revise lease agreements to allocate tax risk.

• Counties can no longer impose assessments without citing a specific statutory provision, limiting their enforcement tools.

• Watch for the Colorado Department of Local Affairs’ rulemaking on municipal tax‑assessment standards expected in Q4 2026.

• General counsel should order a compliance audit of all leasehold tax assessments before the October 1, 2026 filing deadline.

Source: Colo. County Repeating Illegal Valuation, Airport Lessee Says