On December 7, 2020, the Colorado Department of Revenue (CDOR) issued a general information letter [Colo. Dep’t of Revenue, Gen. Info. Letter GIL-20-003, 12/07/20] regarding the eligibility of a mutual ditch company to claim a Colorado conservation easement tax credit, except when a state governmental entity is a shareholder. CDOR determined that a mutual ditch company formed under Article 42 of Title 7, C.R.S., or under Articles 121 to 137 of Title 7, C.R.S., is a nonprofit corporation within the definition of 1 CCR 201-2, Rule 39-22-522(1)(e) and is qualified to claim the conservation easement tax credit. The letter clarified, however, that if a shareholder of the mutual ditch company is a state governmental entity, including municipalities and counties as political subdivisions of the state, the mutual ditch company and all of its members will be ineligible to claim the credit. This same reasoning applies to any nonprofit corporation with a state governmental entity as a shareholder.