C.R.S. § 39-21-112 — Duties and powers of executive director - reporting of information related to local lodging tax and sales or use tax on building or construction materials - definitions - repeal

(1) It is the duty of the executive director to administer the provisions of this article 21, and the executive director has the power to adopt, amend, or rescind such rules not inconsistent with the provisions of this article 21, the statutory provisions listed in section 39-21-102, and, subject to other provisions of law relating to the promulgation of rules, to appoint, pursuant to section 13 of article XII of the state constitution, such persons, to make such expenditures, to require such reports, to make such investigations, and to take such other action as the executive director deems necessary or suitable to that end. The executive director shall determine the organization and methods of procedure in accordance with the provisions of this article 21. For the purpose of ascertaining the correctness of any return or for the purpose of making an estimate of the tax due from any taxpayer, the executive director has the power to examine or cause to be examined by any employee, agent, or representative designated by the executive director for that purpose any books, papers, records, or memoranda bearing upon the matters required to be included in the return. In the exercise of rule-making authority as to article 29 of this title 39, as granted by the general assembly pursuant to this subsection (1), the executive director may not readopt any rule, or portion thereof, disapproved on or after July 1, 1982, by the general assembly pursuant to section 24-4-103 (8)(d) without the approval of the general assembly. (2) If any taxpayer refuses voluntarily to furnish any of the foregoing information when requested by the executive director of the department of revenue or his employee, agent, or representative, the executive director, by subpoena issued under his hand, may require the attendance of the taxpayer and the production by him of any of the foregoing information in his possession and may administer an oath to him and take his testimony. If the taxpayer fails or refuses to respond to said subpoena and give testimony, the executive director may apply to any judge of the district court of the state of Colorado for an attachment against such taxpayer as for contempt, and said judge may cause arrest of such person, and upon hearing, said judge has, for the purpose of enforcing obedience to the requirements of said subpoena, power to make such order as, in his discretion, he deems consistent with the law for punishment of contempts. (3) If the executive director of the department of revenue is unable to secure from the taxpayer information relating to the correctness of the taxpayer's return or the amount of the income of the taxpayer, the executive director may apply to any judge of the district court of the state of Colorado for the issuance of subpoenas to such other persons as the executive director believes may have knowledge in the premises, and, upon making a showing satisfactory to the court that the taxpayer cannot be found, or evades service of subpoena, or fails or refuses to produce his records or give testimony, or is unable to furnish such records or testimony, the judge has power, after service of summons upon the persons named in the petition of the executive director, after written notice mailed to the taxpayer to his last-known address as set forth in the records of the department of revenue, and after hearing, to cause the issuance of subpoenas under the seal of the court to the persons sought to be so summoned requiring any of them to appear before said executive director and give testimony relating to said taxpayer's return or income. In case any of said persons so served with subpoena fail to respond thereto, the judge may proceed against such persons as in cases of contempt. (3.5) (a) If any retailer that does not collect Colorado sales tax refuses voluntarily to furnish any of the information specified in subsection (1) of this section when requested by the executive director of the department of revenue or his or her employee, agent, or representative, the executive director, by subpoena issued under the executive director's hand, may require the attendance of the retailer and the production by him or her of any of the foregoing information in the retailer's possession and may administer an oath to him or her and take his or her testimony. If the retailer fails or refuses to respond to said subpoena and give testimony, the executive director may apply to any judge of the district court of the state of Colorado to enforce such subpoena by any appropriate order, including, if appropriate, an attachment against the retailer as for contempt, and upon hearing, said judge has, for the purpose of enforcing obedience to the requirements of said subpoena, power to make such order as, in his or her discretion, he or she deems consistent with the law for punishment of contempts. (b) For purposes of this subsection (3.5), retailer shall have the same meaning as set forth in section 39-26-102 (8). (c) (I) Each retailer that does not collect Colorado sales tax shall notify Colorado purchasers that sales or use tax is due on certain purchases made from the retailer and that the state of Colorado requires the purchaser to file a sales or use tax return. (II) Failure to provide the notice required in subparagraph (I) of this paragraph (c) shall subject the retailer to a penalty of five dollars for each such failure, unless the retailer shows reasonable cause for such failure. (d) (I) (A) Each retailer that does not collect Colorado sales tax shall send notification to all Colorado purchasers by January 31 of each year showing such information as the Colorado department of revenue shall require by rule and the total amount paid by the purchaser for Colorado purchases made from the retailer in the previous calendar year. Such notification shall include, if available, the dates of purchases, the amounts of each purchase, and the category of the purchase, including, if known by the retailer, whether the purchase is exempt or not exempt from taxation. The notification shall state that the state of Colorado requires a sales or use tax return to be filed and sales or use tax paid on certain Colorado purchases made by the purchaser from the retailer. (B) The notification specified in sub-subparagraph (A) of this subparagraph (I) shall be sent separately to all Colorado purchasers by first-class mail and shall not be included with any other shipments. The notification shall include the words Important Tax Document Enclosed on the exterior of the mailing. The notification shall include the name of the retailer. (II) (A) Each retailer that does not collect Colorado sales tax shall file an annual statement for each purchaser to the department of revenue on such forms as are provided or approved by the department showing the total amount paid for Colorado purchases of such purchasers during the preceding calendar year or any portion thereof, and such annual statement shall be filed on or before March 1 of each year. (B) The executive director of the department of revenue may require any retailer that does not collect Colorado sales tax that makes total Colorado sales of more than one hundred thousand dollars in a year to file the annual statement described in sub-subparagraph (A) of this subparagraph (II) by magnetic media or another machine-readable form for that year. (III) (A) Failure to send the notification required in subparagraph (I) of this paragraph (d) shall subject the retailer to a penalty of ten dollars for each such failure, unless the retailer shows reasonable cause for such failure. (B) Failure to file the annual statement required in sub-subparagraph (A) of subparagraph (II) of this paragraph (d) shall subject the retailer to a penalty of ten dollars for each purchaser that should have been included in such annual statement, unless the retailer shows reasonable cause for such failure. (4) Regulations adopted, amended, or rescinded by the executive director of the department of revenue shall be effective in the manner and at the time prescribed by the executive director, subject to the provisions of article 4 of title 24, C.R.S. (5) Subject to the provisions of this article and the state personnel system regulations, the executive director of the department of revenue is authorized to appoint and prescribe the duties and powers of such officers, accountants, experts, and other persons as may be necessary in the performance of his duty. He may delegate to any such person so appointed such power as he deems reasonable and proper for the effective administration of this article and shall bond, in a sufficient amount, any person handling money under this article. (6) Members of the department of revenue shall each give bond to the state of Colorado in the sum of five thousand dollars conditioned upon the faithful performance of their duties under the provisions of this article. (7) (a) Any officer or employee of the department shall be dismissed from office or discharged from employment if, while performing functions related to any revenue law of the state of Colorado, he: (I) Extorts or willfully oppresses any person through use of his actual or apparent authority; (II) Knowingly demands other or greater sums than are authorized by law or receives any fee, compensation, or reward, except as prescribed by law, for the performance of any duty; (III) With intent to defeat the application of any provision of this title, makes opportunity for any person to defraud the state of Colorado by intentionally failing to perform any of the duties of his office or employment; (IV) Conspires or colludes with any other person to defraud the state of Colorado; (V) Knowingly makes opportunity for any person to defraud the state of Colorado; (VI) Commits or omits to do any act with the intent to enable any other person to defraud the state of Colorado; (VII) Makes or signs any fraudulent entry in any book or makes or signs any fraudulent certificate, return, or statement; (VIII) Fails to report in writing to the executive director of the department of revenue or his designee any knowledge or information he has concerning a violation of any revenue law by any person or a fraud committed by any person against the state of Colorado under any revenue law; or (IX) Demands, accepts, or attempts to collect, directly or indirectly, as payment, gift, or otherwise any sum of money or other thing of value for the compromise, adjustment, or settlement of any charge or complaint for any violation or alleged violation of law, except as otherwise expressly authorized by law. (b) Any officer or employee who violates any of the provisions of paragraph (a) of this subsection (7) is guilty of a class 6 felony and shall be punished as provided in section 18-1.3-401, C.R.S. The court may in its discretion award out of any fine imposed an amount, not in excess of one-half thereof, for the use of the informer, if any, in any such case who shall be ascertained by the judgment of the court. The court also shall render judgment against the said officer or employee for the amount of damages sustained in favor of the party injured. (8) The executive director is authorized to waive, for good cause shown, any penalty or interest assessed on any tax administered under the provisions of this article, and interest imposed in excess of the rate imposed under section 39-21-110.5 shall be deemed a penalty. (9) The executive director shall have such other powers, duties, and functions as are prescribed for heads of principal departments in the Administrative Organization Act of 1968, article 1 of title 24, C.R.S. (10) (a) Notwithstanding any other provision of law, and pursuant to 26 U.S.C. sec. 6402 and 31 U.S.C. sec. 3716 (b) and (h)(1), or any successor sections, the executive director may enter into a reciprocal agreement with the United States government to offset: (I) The claim of any person against the state, including any state tax overpayment to which the person may be entitled, to any debt of the person owed to the United States government that the United States government has certified as final, due, and owing, with all appeals and legal actions having been waived or exhausted; and (II) Any claim of any person against the United States government to any liquidated debt of the person owed to the state. Any fees associated with any offset of federal money will be deducted by the United States government from the amount of money offset, which may then be added to the balance of the debt owed, but any fees associated with any offset of state money will not be charged to the United States government. (b) Notwithstanding any other provision of law, the executive director may enter into a reciprocal agreement with any state to offset: (I) The claim of any person against the state to any debt of the person owed to any state that has certified the debt as final, due, and owing, with all appeals and legal actions having been waived or exhausted; and (II) Any claim of any person against any state to any liquidated debt of the person owed to the state. (11) (a) As used in this section, unless the context otherwise requires: (I) Applicable sales or use tax means a sales or use tax on building or construction materials imposed by a local taxing jurisdiction. (II) Building permit-related applicable sales or use tax information means the following information: (A) The tax rate of all applicable sales or use taxes, including applicable sales or use taxes imposed on the items identified in subsection (11)(a)(II)(E) of this section; (B) The timing of when the applicable sales or use tax must be paid to the local taxing jurisdiction and if the local taxing jurisdiction requires pre-payment of the applicable sales or use tax, the percentage basis for the pre-paid amount required; (C) Any exemptions on purchases subject to the applicable sales or use tax; (D) Whether the local taxing jurisdiction includes the applicable sales or use tax due on a building permit and whether any other information is included on building permits; and (E) Whether the local taxing jurisdiction imposes a sales or use tax on construction equipment brought into the local taxing jurisdiction, on storage of equipment within the local taxing jurisdiction, or on services. (III) Construction equipment means any equipment, including mobile machinery and mobile equipment, which is used to erect, install, alter, demolish, repair, remodel, or otherwise make improvements to any real property, building, structure, or infrastructure. (IV) Local lodging tax has the same meaning as set forth in section 39-26-802 (1)(a.5)(II). (V) Local lodging tax information means the following information for all local lodging tax imposed by the local taxing jurisdiction: (A) The tax rate; (B) The types of lodging that the local lodging tax applies to, including any conditions governing the application of the local lodging tax by lodging type, such as minimum number of rooms in a property or use of accommodations; (C) The number of days after which a stay is exempt, which may be referred to as a length of stay exemption; and (D) The amount of the local lodging tax that is permitted to be retained by the party responsible for collection of the local lodging tax in exchange for timely filing, which may be referred to as a vendor fee, service fee, or timely filing discount. (VI) Local taxing jurisdiction means a county, home rule county, statutory town or city, home rule town or city, city and county, or territorial charter town or city that imposes a local lodging tax or imposes an applicable sales or use tax. (b) By not later than July 1, 2025, and by not later than January 1 and July 1 of each year thereafter, the executive director shall, in a form and in a manner prescribed by the department, publish local lodging tax information and building permit-related applicable sales or use tax information. (c) (I) For the purpose of administration by the executive director of the provisions in this subsection (11), each local taxing jurisdiction shall file with the executive director a copy of each ordinance or resolution, or any amendment thereto, that imposes an applicable sales or use tax or local lodging tax no later than forty-five days before the effective date of the ordinance or resolution, or any amendment thereto. If a local taxing jurisdiction's ordinance or resolution does not contain building permit-related applicable sales or use tax information or local lodging tax information, the local taxing jurisdiction shall file with the executive director documentation containing such information as set forth in subsections (11)(a)(II) and (11)(a)(V) of this section. (II) (A) Notwithstanding the provisions of subsection (11)(c)(I) of this section, local taxing jurisdictions shall file with the executive director a copy of each ordinance or resolution, or any amendment thereto, that imposes an applicable sales or use tax or local lodging tax on or before June 15, 2025. If a local taxing jurisdiction's ordinance or resolution does not contain building permit-related applicable sales or use tax information or local lodging tax information, the local taxing jurisdiction shall file with the executive director documentation containing such information as set forth in subsections (11)(a)(II) and (11)(a)(V) of this section. (B) This subsection (11)(c)(II) is repealed, effective January 1, 2027. Source: L. 65: p. 1140, § 2. C.R.S. 1963: § 138-9-11. L. 77: (1) amended and (7) added, pp. 842, 1772, §§ 6, 1, effective July 1. L. 81: (3) amended, p. 1869, § 1, effective May 13. L. 82: Entire section amended, p. 558, § 2, effective April 6. L. 89: (8) added, p. 1497, § 1, effective June 7; (7)(b) amended, p. 852, § 143, effective July 1. L. 94: (9) added, p. 566, § 17, effective April 6. L. 2001: (1) amended, p. 780, § 12, effective June 1. L. 2002: (7)(b) amended, p. 1556, § 347, effective October 1. L. 2009: (1) amended, (HB 09-1053), ch. 159, p. 692, § 15, effective August 5. L. 2010: (3.5) added, (HB 10-1193), ch. 9, p. 55, § 2, effective February 24. L. 2021: (10) added, (SB 21-055), ch. 12, p. 80, § 16, effective March 21. L. 2023: (1) amended, (HB 23-1121), ch. 35, p. 124, § 6, effective August 7. L. 2024: (11) added, (HB 24-1050), ch. 374, p. 2539, § 1, effective June 4; (1) amended, (HB 24-1349), ch. 423, p. 2905, § 15, effective December 17 (see editor's note). Editor's note: Section 19(1) of chapter 423 (HB 24-1349), Session Laws of Colorado 2024, provides that the act changing this section takes effect on the date of the official declaration of the vote thereon by the governor only if, at the November 2024 statewide election, a majority of voters approve the ballot issue referred in accordance with § 39-37-201. The ballot issue, referred to the voters as Proposition KK, was approved on November 5, 2024, and was proclaimed by the Governor on December 17, 2024, see L. 2025, p. 3636. The vote count for the measure was as follows: FOR: 1,675,123 AGAINST: 1,406,112 Cross references: For the legislative declaration contained in the 2002 act amending subsection (7)(b), see section 1 of chapter 318, Session Laws of Colorado 2002.