SB 24-025

Senate Bill 24-025 updates how Colorado's Department of Revenue handles local sales and use taxes for cities, counties, special districts, and certain home rule jurisdictions. It requires these entities to notify the department when they make changes to their tax laws or boundaries, designates liaisons to work with the state on tax collection, and sets up a process to resolve disputes if taxes are paid incorrectly. The bill also protects businesses that use the state’s geographic information system for determining where taxes should be paid, ensuring they won’t face penalties due to errors in the database. This bill was signed into law by the governor and will take effect on July 1, 2025.

Official Summary

Under current law, the department of revenue (department) administers, collects, and enforces the local sales or use tax that a statutory local government or a special district imposes and, if requested, administers, collects, and enforces any such tax that a home rule jurisdiction imposes. The statutes that govern the administration, collection, and enforcement of these local sales or use taxes are located in multiple titles of the Colorado Revised Statutes. The act revises, modernizes, and harmonizes the separate statutes that govern the state administration of local sales or use tax by creating new parts 2 and 3 in article 2 of title 29. In general, the act makes clear that the department collects, administers, and enforces a local government sales or use tax in the same manner as it collects, administers, and enforces the state sales tax. The act: Requires a statutory local government, special district, or requesting home rule jurisdiction that imposes a new sales or use tax, makes a change to its existing sales or use tax, or changes its geographical boundaries by ordinance, resolution, or election to provide the department written notice within specified deadlines and establishes the applicability dates for such events; Requires each statutory local government, special district, and requesting home rule jurisdiction to designate one or more liaisons to coordinate with the department regarding the collection of its sales or use tax; Establishes a dispute resolution process when the local sales or use tax that is administered, collected, and enforced by the department is paid erroneously to the state or to the wrong statutory local government, special district, or home rule jurisdiction; Makes clear that a vendor who uses the department's geographic information system (GIS) database to determine the jurisdictions to which statutory local government, special district, or requesting home rule jurisdiction tax is owed is held harmless for any tax, charge, or fee liability that would otherwise be due solely as a result of an error or omission in the GIS database data; Clarifies that a statutory local government, special district, or requesting home rule jurisdiction may allow a retailer that collects and remits its sales or use tax to retain a percentage of the amount remitted to cover the vendors' expenses in collecting and remitting the statutory local government, special district, or requesting home rule jurisdiction's sales or use tax, but specifies that the statutory local government, special district, or requesting home rule jurisdiction may not impose a limit on the amount retained; Modifies the relief available under the provisions for local dispute resolution for sales or use taxes asserted by the local government to reflect the availability of the department's GIS database for accurately sourcing sales; and Makes conforming amendments for the collection, administration, enforcement, and distribution of statutory local government, special district, and requesting home rule jurisdiction sales or use taxes. APPROVED by Governor May 1, 2024 EFFECTIVE July 1, 2025(Note: This summary applies to this bill as enacted.)

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