C.R.S. § 39-26-802.7 — Electronic sales and use tax simplification system - sourcing method - implementation - legislative intent - definitions

(1) As used in this section, unless the context otherwise requires: (a) Department means the department of revenue. (b) Local taxing jurisdiction means a city, town, municipality, county, special district, or authority authorized to levy a sales or use tax pursuant to title 24, 25, 29, 30, 31, 32, 37, 42, or 43, and any county, city and county, or municipality governed by a home rule charter. (c) Office of information technology or office means the office of information technology created in section 24-37.5-103. (d) Sales and use tax simplification task force or task force means the sales and use tax simplification task force created in section 39-26-802. (2) (a) The office of information technology, on behalf of the department, within existing resources, shall conduct a sourcing method in accordance with the applicable provisions of the Procurement Code, articles 101 to 112 of title 24, and any applicable rules, for the development of an electronic sales and use tax simplification system. The office and the department shall involve stakeholders to develop the scope of work. (b) On and after the date the electronic sales and use tax simplification system is online, and notwithstanding any law to the contrary, the department shall accept any returns and payments processed through the system for state sales and use tax and for any sales and use taxes that are collected by the department on behalf of any local taxing jurisdiction. (c) (I) On and after the date the electronic sales and use tax simplification system is online, it is the general assembly's intent that at least three local governments governed by a home rule charter voluntarily use the system for accepting returns and processing payments of any local sales and use tax. (II) It is the general assembly's intent that the voluntary use of the system increase every year so that no later than three years after April 12, 2019, all local governments governed by a home rule charter are voluntarily using the system. (d) As soon as possible, but no later than January 1, 2025, the department shall modify the electronic sales and use tax simplification system: (I) To populate a local account number on all returns and summary reports, if the retailer filing the return has a number and provides the number in the sales and use tax simplification system; (II) By developing a simplified user interface for filing returns as an alternative to the current spreadsheet method, and, in doing so, the department shall take into consideration the features of other sales and use tax filing interfaces that have favorable user recommendations; (III) To provide retailers with a bulk testing option for address files; and (IV) To include: (A) A column to allow a description for a deduction that is described as other; (B) Filtering options for local taxing jurisdictions to sort retailers and create reports that are exportable as spreadsheets; (C) Local account numbers on a detail tab for retailers; and (D) A tab for a retailer's filing history and payments. (e) With the exception of a charge for a payment by credit card, the department shall not impose a convenience fee or any other type of charge for a payment through the electronic sales and use tax simplification system. The department shall not deduct an amount from the amounts distributed to the local taxing jurisdictions in lieu of the convenience fee or other charges that are prohibited by this subsection (2)(e). (3) For the 2020-21 state fiscal year, the general assembly shall appropriate eight million seven hundred fifty thousand dollars to the office of the governor for use by the office of information technology for the initial funding and ongoing maintenance of the electronic sales and use tax simplification system. Any contract entered into for the system must provide that initial funding payments to the vendor are made on a quarterly basis. (4) In the interim between the 2019 and 2020 legislative sessions, the office and the department shall regularly provide the sales and use tax simplification task force with any such detailed information regarding the sourcing method progress as is allowed under the procurement code. (5) (a) The department shall create a campaign to promote the electronic sales and use tax simplification system for the purpose of increasing awareness, participation, and compliance by retailers and local taxing jurisdictions. The campaign must include information for taxpayers about the zero return process and additional requirements that may apply when filing a return for a home rule local taxing jurisdiction, and it must also include demonstrations for cities of the registration and filing processes from a retailer's perspective. (b) The department shall solicit and consider feedback from interested stakeholders of the electronic sales and use tax simplification system, such as local taxing jurisdictions, organizations representing local taxing jurisdictions, representatives of the business community, and retailers, about additional potential enhancements to the system that will lead to greater local taxing jurisdiction participation and greater compliance by retailers. Source: L. 2019: Entire section added, (SB 19-006), ch. 105, p. 376, § 2, effective April 12. L. 2023: (2)(d), (2)(e), and (5) added, (HB 23-1017), ch. 365, p. 2195, § 1, effective August 7. Cross references: For the legislative declaration in SB 19-006, see section 1 of chapter 105, Session Laws of Colorado 2019.