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While some state laws still prevail over a local dispute, there is typically more ability for the city or county to govern itself than non-Home Rule states. Various state constitutions allow for this self-governance, which can have benefits, but also complicate matters around filing sales tax. For information on their sales/use tax rules and regulations, please reach out to each city directly.
In some cases, the self-collected municipal sales tax laws differ markedly from the state-administered sales tax law . An interesting development in Colorado is that some municipalities have banded together to form SUTS, the Colorado Sales & Use Tax System. The institution allows sellers to remit sales tax for some home rule municipalities in one online portal. Perhaps recognizing the value of conformity, most participants in SUTS have also chosen to adopt the state’s economic nexus requirements. That is, if a seller hits economic nexus in the state of Colorado, the nexus also applies in the home rule jurisdiction even though the jurisdiction has its own tax code.
Multistate Tax alert | January 19, 2021
Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein. The Plaindealer will further explore differences between home rule and statutory municipalities next week and will compare the budgets of Ouray, Ridgway, Paonia and Mancos. In Paonia and Mancos, the town mayors are at the head of the government bodies and are elected to that position. Also elected are six citizens who make up the Board of Trustees, constituting the legislative body of the town. The Board of Trustees hires the town administrator, who serves as the administrative officer of the town under the direction of the board.
The City of Central is the only Colorado municipality that does not have its full place name at the end of its municipal title. The towns of Garden City, Lake City, Orchard City, and Sugar City are statutory towns despite the word "city" at the end of their names. The municipality of Creede uses the official title "City of Creede" despite its status as a Colorado statutory town.
Home Rule Governance in Colorado (20-
In general, cities are more populous than towns, although long-term population changes may skew this considerably, as illustrated by the City of Black Hawk and the Town of Castle Rock. While the advancement of technology has made taxation increasingly complicated as retail sales move to digital and non-tangible formats, it has also provided tools to manage that complexity. Companies with complex sales tax management requirements can automate much of this process — and in fact, at a certain point really must automate it or risk introducing far too many errors as accountants inevitably get overwhelmed by changing details. This is particularly important for SaaS companies because newer products like software tend to be the controversial ones that differ in taxability to that of the state.
Because Colorado is a Home Rule state, the individual Home Rule Cities administer their own sales taxes as well as define their own tax bases. To date there are 70+ Home Rule cities within the state that can basically define their own tax rules. Even more, these rules often differ from other jurisdictions administered by the state. Under Colorado law, municipalities may impose sales and use tax separately from the state's tax.
Colorado localities create nexus provisions
We currently have 262 businesses participating in the final phase of testing, with 1 filing a return so far this month. Retail Sales Tax Returns are due on or before the 20th of each month for monthly filers. The Provisional Government of the Territory of Jefferson granted a charter to the consolidated City of Denver, Auraria, and Highland on December 3, 1859. The Territory of Colorado reincorporated the city as the City of Denver City on November 7, 1861. The Town of Georgetown is the only municipality that still operates under a charter granted by the Territory of Colorado. The town operates under Article 14, Section 13 of the Charter & Constitution of the Colorado Territory enacted on January 28, 1868.
Business registration continues to grow, with 4,539 businesses signed up to use the Sales & Use Tax System . Business registration continues to grow, with 5,367 businesses signed up to use the Sales & Use Tax System . Business registration continues to grow, with 5,739 businesses signed up to use the Sales & Use Tax System .
Home rule municipalities can also impose admissions, entertainment, tourism and lodging taxes catered to their communities' needs, in addition to local sales taxes. This could be why they are so popular in Colorado, which has approximately 100 home rule municipalities. The City of Central City has joined SUTS as a participating home rule, self-collecting jurisdiction. This brings the total number of participating, home rule, self-collecting jurisdictions to 44.
The City of Colorado Springs with 195 square miles of land area is the most extensive municipality, while the Town of Sawpit with 19 acres (0.078 km2) of land area is the least extensive. 2 Colorado Municipal League maintains an updated list of self-collected home rule municipalities that have adopted the Model Ordinance here. Taxpayers must complete a separate registration for SUTS by sending a request via email to Registering for SUTS requires a valid state sales tax license. Well, things aren’t that simple due to the existence of home rule municipalities. And the answer you’ll get on a cursory glance is “no.” Colorado as a state does not tax sales of SaaS.
The City of Centennialhas joined SUTS as a participating home rule, self-collecting jurisdiction. This brings the total number of participating, home rule, self-collecting jurisdictions to 48. The Town of Friscohas joined SUTS as a participating home rule, self-collecting jurisdiction. This brings the total number of participating, home rule, self-collecting jurisdictions to 49.
Several Colorado municipalities are beginning to enforce economic nexus standards through these provisions without formal notice to the public. As a result of the ever-evolving landscape with sales and use taxes in Colorado, taxpayers should continue to monitor DOR and CML websites for additional home rule jurisdictions adopting the Model Ordinance. As more home rule jurisdictions adopt the CM L's Model Ordinance and opt into the SUTS, taxpayers should evaluate their sales periodically to ensure they comply with newly adopted registration and collection requirements.
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