View Full Version : New sales tax collection law for Colorado..
I work in construction and I do projects all over the state. because I sell goods in the process of doing business I charge my clients sales tax on these goods.
The basis of sales tax collection is dependent on where the goods are delivered. For instance, my business is located in Boulder, I am required to collect Boulder sales tax under my Boulder Sales Tax license if the goods I sell are delivered within Boulder, State tax for everyone, county tax if the project is within Boulder County and RTD tax if the project is within the RTD district. if I sold a project to a client in Parker I would only charge State sales tax and RTD tax, I was not beholden to collect any county or city tax for Parker.
The new sales tax law that was implemented December 1st now requires me to collect any and all sales taxes for any municipality that is administered/collected by the state that I deliver goods to. For instance Castle Pines sales tax is collected by the state, if I have a project in Castle Pines I will now have to collect Castle Pines sales tax as well as Douglas County sales tax.
Also.. If I did business in a city such as Littleton that collects it's own tax in the past if it was a one off project they would usually not require me to collect the tax for them. Now it is likely that those self collecting jurisdictions are also going to want anyone delivering goods to their jurisdictions to maintain a sales tax license for their jurisdiction as well even if you make a one time sale.
This is going to be a huge drag on resources for small businesses that deliver goods to various jurisdictions throughout the state.
How this will affect most people is that lets say I order an AK parts kit from Arms Of America in Colorado Springs, they used to charge Colorado State sales tax, now they will also have to charge me Boulder County sales tax and Boulder City sales tax.
GeorgeandSugar
12-08-2018, 13:51
My question is how will the business owner know what to collect, since there different taxing entities across the state? Has the state and the various taxing entities devised a quick means (software program) to calculate these taxes?
Trying to figure this out would be a nightmare for small businesses.
Never ceases to amaze me how government at all levels continues to add complexity to every day living.
How will these taxing entities knows if your not collecting? How many people will have to be hired at all these taxing entities to monitor compliance?
More overhead. Means less for employees and business owner.
Consider all the upgrades to web sites to calculate and figure these taxes.
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Most of the software programs are not set up to do this. A sixty day delay was just announced to allow small business more time to adapt. The sales tax auditors just got a bunch of work.
I'm simply not going to sell anything to anyone in Colorado that is not picked up at my physical retail location. Yeah, I'm gonna lose a few customers on the western slope and down south that I have been shipping to for years, but the additional time and brain damage every month makes it prohibitive to calculate and collect the appropriate tax. According to one news item I saw, there is over 650 separate sales tax collecting entities in the state of Colorado. I am not aware of any resource that can tell a retailer the correct tax entities for any give street address. Add in the complication of the billing address not being the same as the delivery address (gifts, or having stuff delivered to your work). This is going to be even more of a nightmare for online retailers such as Amazon.
kidicarus13
12-08-2018, 15:41
There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.
Ayn Rand
buffalobo
12-08-2018, 18:01
Obviously, I would never advocate or condone lawbreaking on this site.
*clears throat*
Anyway, something to remember is that the way sales tax is remitted in most jurisdictions in Colorado is:
County+State ---> Remitted to State of Colo.
City --> Remitted to individual city.
Special Taxing jurisdiction -> Remitted to that.
What's also important to note, is the way auditing is also conducted in Colorado.
State has it's own tax auditors. They don't give a rip about city sales tax.
Each City has it's own tax auditors. They don't give a rip about state sales tax.
Unless you're running volume competitive to that of Walmart or Kroger, you'd have to REALLY piss someone off to warrant the ire of a differing city tax auditor.
Moreover, I'm not sure it's exactly clear to what extent/power an out-of-jurisdiction auditor has to investigate your records. E.g. if you tell them to fuck off, I don't think they have the power to assign taxes upon you absent definitive public proof you are transacting in their county. (Else the potential for interstate political abuse would be insane, and practically be the powder keg in this country...).
This new law, perhaps more than any other demonstrates the overreach in govt; and is something that previous generations would not have tolerated. Welcome to 2018.
Coming up next: California city's target gun dealers across the country with "audits" seeking their records. Gun dealers tell California to fuck itself. California gives itself a blow-job on live television.
Taxes have driven revolutions before...
There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.
Ayn Rand
Innocent men who stand.
Was this a voter passed "law" or something the "representatives" did?
As a retailer who has had to compete against "mail order companies," having them required to collect taxes too, would make me feel better and level the playing field for local businesses.
Taxes. 'nuff said.
John
Bailey Guns
12-08-2018, 22:36
One of the greatest lies ever... Own your own business - the American dream. After almost 10 years of doing just that I gotta say I'm glad to be working for "the man" again. Do my job, go home. No more taking it with me, no more worrying about stuff like this and all the other laws and regulations a small business owner has to comply with.
kidicarus13
12-08-2018, 22:42
https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf South Dakota vs. Wayfair, Inc.
Yep
GeorgeandSugar
12-09-2018, 05:58
There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.
Ayn Rand
I am an Ayn Rand fan![emoji106][emoji106]
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3beansalad
12-09-2018, 08:14
And now I cant even get a deal on auto parts online. https://uploads.tapatalk-cdn.com/20181209/023669d298ad1065e1a5208ff932e052.jpg
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3beans, I’m technically county and not COS. Shoot me a PM for address and see if they’ll accept it and you can have it delivered here
thedave1164
12-09-2018, 11:21
Another reason to leave this state
Another reason to leave this state
Why the US Congress needs to ban taxation of interstate commerce. Internet and mail order. And that silly tax Colorado has on stuff purchased out of state.
We do with less, it's time government do with less.
spqrzilla
12-09-2018, 23:28
Why the US Congress needs to ban taxation of interstate commerce. Internet and mail order. And that silly tax Colorado has on stuff purchased out of state.
We do with less, it's time government do with less.
Do not hold your breath.
Great-Kazoo
12-09-2018, 23:44
Another reason to leave this state
Done.
However what one state fucks you with in taxes, the others do with fees. There is no safe harbor from the storm a brewing, how one weathers the storm. That's entirely different. Fortunately we had no kids of school age, so relocating was not that hard. I feel for those with kids in school, or with a large family tie, still residing there.
wctriumph
12-10-2018, 09:54
Next will be taxing a private party firearms transfer through a FFL. Since they have to take it into their inventory to record the sale, surely that is a reason to tax the new owners when it is transferred from inventory to the new owner?
The government will do all they can to eliminate the illicit (cash, barter) economy so that all transactions can be controlled.
Just wait until the commies take control of the federal branches again.
3beansalad
12-10-2018, 11:24
And now I cant even get a deal on auto parts online. https://uploads.tapatalk-cdn.com/20181209/023669d298ad1065e1a5208ff932e052.jpg
Sent from my SM-G955U using Tapatalk
For anyone curious, shipping to a location not subject to city sales tax seems to be acceptable. I didn't complete the order at this point, the $75 shipping charge feels exorbitant and I'll check out some other outlets before buying.
Next will be taxing a private party firearms transfer through a FFL. Since they have to take it into their inventory to record the sale, surely that is a reason to tax the new owners when it is transferred from inventory to the new owner?
The government will do all they can to eliminate the illicit (cash, barter) economy so that all transactions can be controlled.
Just wait until the commies take control of the federal branches again.
The Commies are still there, some even, still in power. The Commies in our country wear Red and Blue.
For there is one God, and one mediator between God and men, the man Christ Jesus.
1 Timothy 2:5
The Commies are still there, some even, still in power. The Commies in our country wear Red and Blue.
Yup, the communists sit on both sides of the aisle.
Does it really "level the field"?
Mail order business have a cost that you don't .... mailing. Though you might think tax levels the field for small business, companies like Amazon and Walmart don't really have any overhead from this, and it's not going to affect their sales. People ordering online aren't magically going to walk into a retail store because there's a $3.00 fee added that they're... also going to get walking into the retail store.
Any small or medium business, on the other hand, that wants to ship *ANYTHING* - ever- now has their expenses increase by 25-50% or more in doing so. Your good customer moved to Denver and still wants your product? Someone in the neighboring town wants you to ship something to their grandma for her birthday? etc.
Note the requirements don't pass as 200 transactions to each taxing region, it just establishes a minimum size for a business. A business running 100,000 in volume probably isn't generating a profit of even $10,000, and the single-employee owner would be making less than minimum wage in most industries, if not taking a loss. So, it applies to ALL SMALL BUSINESSES. With the only except of "hobby businesses" e.g. people who have a business in name only, but not occupation.
The effect of this is the opposite of leveling the field, it's to drive out small business from competing with "mail order", as you're not going to be getting couch potatoes out to shop if they're going to potato.
The store (and at the end of the day, the consumer) does have to pay freight in too, as witnessed by the product sitting (locally) on the shelf. While there are differences in cost models between the two operations, local business and "mail order," the kinds of costs required to get the product to the consumer are similar, and reflect the costs of the product, marketing expenses, employee payroll, profit margin, freight, etc.
However, the one substantial cost that the consumer historically does not have to pay with "mail order" is sales tax. Or, used to be. Since no one voluntarily pays Use Tax, etc.
We used to have (and I'm sure they still exist) shipping tables from UPS that would allow us to (load them into our Point of Sale application and) calculate shipping charges for every address (zip code) in America. That seems like an undauntable task, but was reduced to a one page form of zip codes and rates that could be updated on a monthly/required basis. I'm sure that similar products will become (if not already) available for calculating (and remitting) sales taxes in modern Point of Sale applications/the age of the internet.
-John
Figuring out how much tax to charge based on zip code seems about as easy as it gets.
That part aside, the law seems unfavorable.
Figuring out how much tax to charge based on zip code seems about as easy as it gets.
That part aside, the law seems unfavorable.
First part, NO: Not all tax districts are defined exclusively by ZIP code.
Second part, Agreed.
Figuring out how much tax to charge based on zip code seems about as easy as it gets.
That part aside, the law seems unfavorable.
Right up to the point you realize that most(if not all)t taxing authorities require businesses to register as tax collection agents, and charge for that privilege. Imagine that instead of 2 tax licences, you as a small businessman have to manage 20, each of which entails it's own fee annually, and requires that you file a multipage return at least quarterly, if not monthly, regardless of whether you collected any tax for that jurisdiction.
I'll walk back my statement to, figuring out what tax to charge is certainly achievable without having to hire a full time accountant solely for that purpose.
I'm not sure why I'm trying to downgrade any complaints though, as it certainly sounds like a bunch of all around BS.
Right up to the point you realize that most(if not all)t taxing authorities require businesses to register as tax collection agents, and charge for that privilege. Imagine that instead of 2 tax licences, you as a small businessman have to manage 20, each of which entails it's own fee annually, and requires that you file a multipage return at least quarterly, if not monthly, regardless of whether you collected any tax for that jurisdiction.
If that's the case, home rule tax collection needs to end. All applicable taxes need to be collected by the state, then distributed up to each tax district by the state. This makes more sense and eliminates local tax collector positions. Oops, there is the flaw, killing guberment jobs.
Otherwise this new policy will kill small businesses that don't sell through market places like Amazon. Was this law sponsored by amazon? Hmm...
If that's the case, home rule tax collection needs to end. All applicable taxes need to be collected by the state, then distributed up to each tax district by the state. This makes more sense and eliminates local tax collector positions. Oops, there is the flaw, killing guberment jobs.
Otherwise this new policy will kill small businesses that don't sell through market places like Amazon. Was this law sponsored by amazon? Hmm...
Currently, it takes me about an hour to fill out monthly sales tax returns for my business. As an indentured servant of the state and the city of Golden, my princely compensation for that hour is a whopping 3.33% of the tax I am forced to collect on their behalf. If I am forced to register with, for instance, Grand Junction and Mesa County to sell a set of tires and ship them to one of my long time customers, I would receive about $8 to file a year's worth of returns, not taking into account the cost of the tax licenses. Allowing the state to collect all municipal taxes only works if they can configure the state return to account for all 650+ tax rates in various parts of the state, which would probably take the time to fill out the return from about an hour to several hours. I can't see the home rule cities giving up their fee revenue for business licenses, nor paying the state for collecting their taxes.
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