JCBL NEWS UPDATE: CO Dept of Revenue to issue emergency sales tax rules Dec 1 with major impact on many JeffCo businesses

The Jefferson County Business Lobby wants to make sure that JeffCo businesses and chambers of commerce are aware of an important change the State of Colorado is implementing regarding the calculation of sales tax on shipped or delivered goods.

These rules could have a major impact on your business or those of your members. Below is background on the coming changes, as well as links to additional information. The JCBL would encourage you to contact the Department of Revenue and your state legislators with any concerns with these rules. Information about how to do that is below.
BACKGROUND

In September, all Colorado businesses that sell tangible goods within the state received notice of an emergency rule making by the Colorado Department of Revenue Taxation Division regarding a substantial change in the collection of sales tax. Previously, most businesses collected sales tax based on the location of the point of sale. Going forward, businesses will be required to collect state, county AND local sales tax based on the location of delivery.

Colorado has one of the most complicated sales and use tax systems in the entire country. With 383 overlapping cities, counties, and special districts, there are almost 700 different sales tax combinations. Most of the these can be remitted to the state, but 99 “home rule” municipalities collect their own taxes, so separate returns will need to be filed with them.

Beginning December 1, if you sell and deliver goods outside of the tax jurisdiction of your physical brick and mortar location, you will be required to register each of the nonphysical locations you sell into on the state’s database. You will also be required to apply for a sales tax license in each of these jurisdictions. The Department is granting an enforcement grace period until March 31, 2019.

These new sales tax rules were precipitated by a US Supreme Court ruling in June. South Dakota v. Wayfair permits states to require out-of-state retailers collect and remit state and local sales taxes. The Wayfair decision rested partly on the fact that South Dakota treated in state and out of state retailers equally in its rules. Colorado Department of Revenue is following suit and subjecting Colorado businesses to the same onerous rules that will apply to remote sellers.
ADDITIONAL RESOURCES

Here is a link to the Department of Revenue memo sent in September, as well as a Denver Post story explaining the issue.

• Department of Revenue Memo
• Denver Post: “Small businesses brace for Colorado’s new online sales tax rules some say could put them out of business”

PUBLIC COMMENT

The Department is holding a public rulemaking hearing on November 30th. If you are concerned about the impact of the new rules on your business, we encourage you to attend that meeting, and to call your state and local elected officials to register your concerns.

The JCBL encourages anyone to attend the hearing to raise concerns, as well. The details for that hearing are below.

Department of Revenue Rulemaking Hearing:

Date/Time:        November 30, 2018 at 2:00 p.m.
Location:           Department of Revenue, 1313 Sherman Street, Room 220, Denver, CO 80203

If you have contacted your legislator or the Department of Revenue, or have questions about the process, please let us know.