The Sales and Use Tax Taskforce met this week and passed two bills. Below is a brief overview of both bills, along with a letter that the Committee sent to the Department of Revenue.
Letter: The Chamber requested that the Committee send a letter to the Department of Revenue outlining a workgroup that will meet to make further recommendations to update the Sales and Use Tax System to make it more user friendly for taxpayers. The letter identifies outcomes as well as stakeholders for the process. There were two changes made to the letter that are not reflected in the linked draft. The first is putting a heavier focus and getting taxpayers motivated to use SUTS as well as the removal of counties as a stakeholder as they are state collected.
Bill 2: The bill establishes confidentiality standards for the protection of taxpayer information used or obtained for a sales and use tax investigation performed by a third-party auditor on behalf of a local taxing jurisdiction. A violation of these standards is a misdemeanor punishable by a fine of no more than $1,000 per violation. The bill prohibits auditors from divulging any taxpayer information related to a sales and use tax audit except for in certain circumstances. Finally, the bill clarifies the Department of Revenue’s (DOR) authority to share taxpayer information with local taxing jurisdictions. This legislation was requested by Simplify Colorado. We expect there may be additional amendments to the legislation once it is introduced in the 2025 legislative session.
Bill 4: The bill directs the Department of Revenue to allow a sales and use tax license, and a sales and use tax exemption certificate to be searchable by the name and identification number of the sales and use tax licensee or the sales and use tax exemption certificate holder. This was requested by the business community to give taxpayers an easier searchable option when complying with state sales tax laws.
If you have any questions please contact Meghan Dollar, SVP of Governmental Affairs and Political Operations ([email protected]).