C.R.S. § 39-26-802 — Sales and use tax simplification task force - creation - definitions - repeal

(1) (a) (I) Notwithstanding section 2-3-303.3, there is created the sales and use tax simplification task force. The task force shall meet as necessary during any legislative session or any interim between legislative sessions to study the necessary components of a simplified sales and use tax system and a simplified local lodging tax system for both the state and local governments, including home rule municipalities and counties. (II) Repealed. (a.5) As used in this section, unless the context otherwise requires: (I) Electronic sales and use tax simplification system means the electronic system described in section 39-26-802.7 for the collection and remittance of sales and use taxes. (II) Local lodging tax means: (A) A tax imposed by a local marketing district pursuant to section 29-25-112 (1)(a) or by a county pursuant to section 30-11-107.5; and (B) Any other tax or fee that is imposed upon the transaction of furnishing rooms or accommodations in exchange for consideration and that is not a tax specified in subsection (1)(a.5)(II)(A) of this section whether imposed upon the lessor or the lessee. (b) (I) The task force shall study both sales and use tax simplification between the state and local governments, including home rule municipalities, and local lodging tax simplification to identify opportunities and challenges within existing fiscal frameworks to adopt feasible solutions, which are solutions that are practical, are revenue neutral, and do not require constitutional amendments or voter approval. (II) The task force shall consider whether there are feasible solutions for: (A) Making audits of retailers more uniform for all state and local taxing jurisdictions in the state; (B) The utilization of a single sales and use tax return for state and local taxing jurisdictions as a part of the sales and use tax simplification system described in Senate Bill 19-006, enacted in 2019; (C) Streamlining the requirements for state and local sales tax licenses, use tax licenses, and business licenses used for purposes of collecting sales and use taxes; (D) Making uniform and possibly increasing the filing threshold amount for monthly sales tax filings between the state and local governments, including home rule municipalities; (E) Simplifying use taxes levied by the state and local governments, including home rule municipalities; (F) Streamlining and possibly making uniform the state and local sales tax exemptions for medical devices, including reviewing best practices among states in this area; (G) Simplifying the process by which state and local sales and use taxes are collected for the purchase of a motor vehicle; (H) Simplifying the issuance of local building permits and the levying of use tax on building materials and on mobile and small mobile construction equipment; (I) Simplifying the process to claim and administer the various state sales and use tax exemptions; (J) Simplifying the sales tax collection and remittance requirements for nonprofit organizations; (K) Simplifying local lodging taxes levied by local governments, including home rule municipalities; and (L) Adding the acceptance of returns and processing payment of any local lodging tax to the electronic sales and use tax simplification system or, alternatively, creating an electronic local lodging tax system that is a one-stop portal designed to facilitate the collection and remittance of local lodging taxes in the same manner in which the electronic sales and use tax simplification system facilitates the collection and remittance of local sales and use taxes. (III) The task force shall: (A) Seek regular updates from the office of information technology and the department of revenue regarding the development of the electronic sales and use tax simplification system described in Senate Bill 19-006, enacted in 2019; (B) Once the electronic sales and use tax simplification system described in Senate Bill 19-006, enacted in 2019, is online, monitor and encourage participation by businesses and home rule municipalities; (C) Seek regular updates from the office of information technology and the department of revenue regarding the purchase and development of a geographic information system (GIS) database to maintain jurisdictional boundaries of sales tax districts and to calculate appropriate sales and use tax rates for individual addresses for which the department of revenue received an appropriation in Senate Bill 19-006, enacted in 2019; (D) Review the way in which special districts and specially assessed sales taxes add to the complexity of the state's sales and use tax structure, including, at minimum, the regional transportation district, the scientific and cultural facilities district, any local improvement districts, any regional transportation authority, any multi-jurisdictional housing authority, and any health services district, and any mass transportation system tax, public safety improvement tax, metropolitan district tax, and local lodging tax; (E) Review and compare the state's sales and use tax definitions with the standard sales tax definitions developed and adopted by local taxing jurisdictions pursuant to Senate Joint Resolution 14-038, enacted in 2014, to determine if any simplification might be achieved between the two sets of definitions; (F) Examine the effects of the changes to the vendor fee implemented pursuant to House Bill 19-1245, enacted in 2019; (G) Review any evaluations of sales and use tax expenditures prepared by the office of the state auditor that are completed pursuant to section 39-21-305, unless a tax commission, legislative interim study committee, or other type of legislative committee, task force, or study group is formed to review such evaluations. If a tax commission, legislative interim study committee, or other type of legislative committee, task force, or study group is formed to review such evaluations, the task force shall seek regular updates from such commission or committee regarding any decisions that such commission or committee might make related to any sales or use tax expenditure evaluated by the office of the state auditor. (H) Explore options for eliminating a department of revenue requirement for taxpayers to use branch ID reporting; (I) Determine whether the state should adopt a sales tax exemption for an isolated or occasional sale of a business in an asset sale; (J) Regularly review the business impact of the destination sourcing rules set forth in section 39-26-104 (3), including the thresholds that trigger the requirement for destination sourcing; and (K) Analyze or review any other relevant topic related to the simplification of sales and use tax administration in the state. (c) (I) In the 2024 interim, the task force: (A) Shall receive testimony at each meeting from industry stakeholders regarding the status of conversations and the feasibility for the electronic collection and remittance of local lodging taxes described in subsection (1)(b)(II)(L) of this section; and (B) May recommend legislation to be considered during the first regular session of the seventy-fifth general assembly to implement or create an electronic system for collection and remittance of local lodging taxes described in subsection (1)(b)(II)(L) of this section. (II) This subsection (1)(c) is repealed, effective July 1, 2026. (2) The task force consists of: (a) Two members from the house of representatives, one appointed by the speaker of the house of representatives and one appointed by the minority leader of the house of representatives; (b) Two members from the senate, one appointed by the president of the senate and one appointed by the minority leader of the senate; (c) A representative of the department of revenue who is well versed in sales and use tax collection and distribution issues and who is knowledgeable of the policy statements and resolutions regarding sales and use tax collection and uniformity of the multistate tax commission, of which Colorado is a member; (d) A representative of the Colorado municipal league; (e) A representative of Colorado counties, incorporated; (f) A member of a statewide association of small businesses that is addressing the simplification of sales and use tax collection, appointed by the governor; (g) A member of the statewide chamber of commerce, appointed by the governor; (h) A state and local sales and use tax law practitioner who is not employed by a home rule or statutory city or city and county, appointed by the governor; (i) A member with state and local sales and use tax accounting experience who is not employed by a home rule or statutory city or city and county, appointed by the governor; and (j) One manager, mayor, council-person, finance officer, or tax administrator of a home rule or statutory city or city and county, appointed by the Colorado municipal league from each of its four population membership categories, according to its bylaws. (2.5) (a) All appointments described in subsection (2) of this section must be made no later than June 1, 2021, and each June 1 thereafter. Members of the task force serve at the pleasure of the applicable appointing authority or until the member no longer serves in the position for which he or she was appointed to the task force, at which time a vacancy is deemed to exist on the task force. If a vacancy arises on the task force, the appropriate appointing authority shall appoint a replacement member that meets the requirements set forth in subsection (2) of this section for the vacant position. (b) Starting in 2021, the task force shall elect a chair and a vice-chair at the first meeting held on or before July 16, 2021. The chair and vice-chair appointments must alternate between a member from the house of representatives and a member from the senate with the first chair being from the senate and the first vice-chair being from the house of representatives. The person serving as chair, or a member of the same house if such person is no longer a member thereof, shall serve as vice-chair during the next legislative session, and the person serving as vice-chair, or a member of the same house if such person is no longer a member thereof, shall serve as chair during the next legislative session. (3) (a) Starting in 2021, the task force shall meet at least eight times, with the first meeting occurring no later than July 16, 2021. Task force meetings shall be open to the public, and the task force shall solicit the testimony of the members of the public. (b) (I) Notwithstanding subsection (3)(a) of this section, the task force shall not meet during the 2025 interim. (II) This subsection (3)(b) is repealed, effective July 1, 2026. (4) (a) The members of the task force appointed pursuant to subsections (2)(a) and (2)(b) of this section are entitled to receive compensation and reimbursement of expenses as provided in section 2-2-326. (b) The legislative council staff and the office of legislative legal services shall be available to assist the task force in carrying out its duties. (5) (a) No later than November 1, 2021, and no later than each November 1 thereafter, the task force shall make a report to the legislative council created in section 2-3-301 that may or may not include recommendations for legislation. (b) (I) Notwithstanding subsection (5)(a) of this section, the task force shall not make a report for the 2025 interim. (II) This subsection (5)(b) is repealed, effective July 1, 2026. Source: L. 2017: Entire part added, (HB 17-1216), ch. 336, p. 1794, § 1, effective June 5. L. 2020: (1)(a), (3), and (5) amended, (1)(b) R&RE, and (2.5) added, (HB 20-1022), ch. 156, p. 668, § 1, effective June 29. L. 2024: (1)(a)(I), (1)(b)(I), (1)(b)(II)(I), (1)(b)(II)(J), and (1)(b)(III)(D) amended and (1)(a.5), (1)(b)(II)(K), (1)(b)(II)(L), and (1)(c) added, (HB 24-1050), ch. 374, p. 2541, § 3, effective June 4. L. 2025: (3) and (5) amended, (SB 25-199), ch. 149, p. 568, § 10, effective April 30; (1)(a)(I) amended, (SB 25-275), ch. 377, p. 2105, § 319, effective August 6. Editor's note: Subsection (1)(a)(II)(B) provided for the repeal of subsection (1)(a)(II), effective July 1, 2021. (See L. 2020, p. 668.)