(Jan. 23) – Colorado took an important step today toward removing red tape for business when the House gave voice-vote approval to Rep. Tracy Kraft-Tharp’s bipartisan bill to take the headache out of the calculation of sales taxes in Colorado.
In Colorado, the same product is subject to approximately 700 different local sales tax rates, depending on the home address of the purchaser. Witnesses before the 2017 interim committee that approved this bill testified that computation of local sales taxes is so time- and labor-intensive that smaller companies may shun statewide sales efforts, stunting their growth potential.
“Colorado has one of the most convoluted, complicated tax systems in the country,” Rep. Kraft-Tharp told the House today.
HB18-1022, also sponsored by Rep. Lang Sias, R-Arvada, launches an information-gathering process for a software system to provide:
- Accurate address location information so every buyer and seller knows what sales tax jurisdictions apply to each transaction
- A single application process for sales tax licenses, ending the current situation in which every merchant who collects sales taxes is required to apply for separate licenses from every jurisdiction to which the merchant remits sales taxes
- A single sales tax remittance form, ending the headache of merchants having to wrestle with multiple forms
- A single point of remittance for sales and use taxes, making it no longer necessary for a merchant to cut different checks for every taxing jurisdiction
- A taxability matrix of each item subject to sales and use taxes, so seller and buyer have an accurate idea of what the sales tax will be for any particular transaction