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DENVER, CO – The House today passed bipartisan legislation that would save small business retailers money by extending the deadline for sales tax collection practices that came as a result of the Supreme Court’s decision in South Dakota v. Wayfair in 2018. The vote was 64-0.
HB22-1027 extends the destination sourcing deadline from February 1, 2022 to October 1, 2022 giving Colorado small businesses more time before needing to remit sales taxes based on the buyer’s address. This bill is also the first piece of legislation to advance the House this year.
“This session, we’re looking at every way we can to save Coloradans and businesses money, and that’s what this bill will do,” said Rep. Cathy Kipp D-Ft. Collins. “With the legislation we passed today, small retailers will have a nine-month extension for destination sourcing, providing them more flexibility before making the final transition later in 2022.”
Last year, the Colorado Legislature passed SB21-282 to provide relief to Colorado’s small business network amidst the pandemic. This bill builds upon last year’s legislative efforts to save retailers money by extending the compliance deadline to October 2022.
In accordance with Colorado tax codes, destination sourcing is sales tax calculated based on the buyer’s address when the taxable product or service is delivered to a consumer. HB22-1027 allows small business retailers with less than $100,000 of sales, to continue to source their sales to the business’ location regardless of where the purchaser receives the good. It also provides more time for retailers to onboard with the electronic sales and use tax system.