Tax Council
Location: CACI Conference Room
Address: 1600 Broadway, Suite 1000
Please be advised that CACI has been engaged in recent discussions with the Office of the Governor and the Colorado Department of Revenue regarding potential 2018 tax legislation. The proposed legislation would shift Colorado’s “single sales factor” apportionment methodology to a “market based sourcing” methodology. We understand the legislation will be based on the Multistate Tax Commission (MTC) model legislation being considered and adopted by many other states.
We have invited staff from those offices to present the proposal to the CACI Tax Council to allow for discussion and feedback by CACI members.
Background of Both Tax Systems:
Single Sales Factor – Under this system, companies pay state income tax based on the sales of products “delivered” to customers in that state. This is straightforward when the products are physically delivered “widgets.” For intangible products and services, income tax is generally paid based on where the costs of performing the services are incurred.
Market Based Sourcing – This system creates a shift in methodology for intangibles and service providers. It would source sales to the State in which the benefit of the service is received and will be subsequently used by the customer. With this system, companies that incur substantial costs related to services and intangible products in Colorado will likely pay less tax in Colorado for sales to customers outside Colorado. For this reason, 26 states have adopted some version of the Multistate Tax Commission model legislation (MTC). This methodology also narrows the sales used to calculate the single sales factor for all Colorado taxpayers.
We encourage CACI members to attend this meeting on
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