Simplifying Taxes for Small Businesses

(Feb. 25) – A bill by Rep. Tracy Kraft-Tharp, D-Arvada, to continue to allow the Colorado Department of Revenue to provide clarity and guidance on questions from taxpayers and small businesses in the form of written letters and rulings instead of audits and penalties passed the House Business Affairs & Labor Committee unanimously this afternoon.
“We all know how hard it can be to interpret tax law,” said Rep. Kraft-Tharp. “This bill provides the guidance necessary so that taxpayers understand how much to collect and pay in taxes. This is especially helpful for small businesses.”
These written letters and rulings are an essential role of the DOR to provide certainty for taxpayers. Without this service, taxpayers or businesses may find out only during an audit that the state interprets the law differently. By removing the uncertainty of tax consequences, these letters and rulings facilitate business transactions in the state. These letters and rulings help small businesses in Colorado by removing uncertainty and ensuring taxpayers have a chance to correct returns instead of facing audits or fines.

The 13-0 vote on HB16-1232 sends the bill to the House floor.

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