This blog was last updated on May 5, 2023
Colorado created the Sales and Use Tax System (SUTS) in 2017, providing a statewide local filing portal, sales tax lookup tool and a robust tax matrix. The system is currently available for businesses with retail sales over $100,000 per year and has around 50 participating locals. Given the number of “home rule” cities in Colorado, each with their own sales tax return and filing requirements, this is truly a helpful simplification. However, significant complexities remain. For example, local participation is not mandatory, nor does it address the challenge of local registration or the disparity between state and local tax rules.
With these intricacies in mind, Colorado introduced legislation in the 2023 session to improve the SUTS system. HB 1017 asks the Colorado Department of Revenue to modify SUTS no later than January 1, 2025, to include a simplified process for filing a zero return, provide bulk testing option for address files, develop a simplified spreadsheet filing system, and include additional information about deduction, use taxes or filtering options. The proposal also requires the Department of Revenue to create a campaign to promote SUTS for increased participation from retailers, as well as localities, and solicit feedback for further enhancements. While advancements like these are a step towards further simplification, sales tax in Colorado remains a quagmire for retailers walking through compliance in the state.
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