SB 22-006

Senate Bill 22-006, which has been signed into law, allows small businesses in Colorado with annual taxable sales of $100,000 or less to keep a larger portion (5.3%) of the sales tax they collect as compensation for their administrative costs, up from the previous rate of 4%. This change aims to help these smaller retailers by reducing their expenses related to handling and submitting sales taxes. The law also specifies that any adjustments to how funds are allocated to support housing development will only consider changes made in prior legislation, not this new bill's modifications. Additionally, it permits the Department of Revenue to cover processing costs when businesses pay their taxes electronically instead of charging a convenience fee. This bill benefits small retailers by easing some of their financial burdens associated with tax collection and payment processes.

Official Summary

The act permits a retailer with total taxable sales in the amount of $100,000 or less for any filing period to retain 5.3% of the sales tax reported as compensation for the retailer's expenses incurred in collecting and remitting the tax (vendor fee) for sales made in 2023, rather than retaining a 4% vendor fee, which is what current law allows. The act also clarifies that the calculation of the amount that is credited to the housing development grant fund is only based on the changes to the vendor fee from House Bill 19-1245, and not on any subsequent modifications, including the changes made in the act. The act allows the executive director of the department of revenue to deduct processing costs from the electronic payment of taxes and fees in lieu of imposing a convenience fee. (Note: This summary applies to this bill as enacted.)

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