DENVER – This afternoon, Senate Democrats killed Senator Rob Woodward’s (R-Loveland) Senate Bill 19-131, which would have simplified and reduced sales tax remittances for small business owners. The bill exempts Colorado businesses that sell less than $100,000 worth of goods in any sales tax jurisdiction (outside of their own) from having to collect those taxes, an issue that arises when a small business has to collect dozens of different rates in different areas for small amounts.
For example, if the owner of a book shop in Estes Park was to receive an order from a customer in Berthoud – let’s say a $10 book – the book shop must search the internet to determine what tax rate applies at that customer’s home address, collect those taxes, then at the end of the month complete the sales tax forms to Berthoud in order to remit the $0.77 in sales taxes.
Senate Bill 19-131 would exempt that book shop from having to go through the rigorous task of collecting those taxes and submitting those forms until they hit a certain threshold of business.
Paul Barron – a small business owner in Colorado – spoke in favor of the legislation due to the complexities of having to collect different sales tax rates in many different areas of the state. “I sold to 26 distinct districts in Colorado last year,” he stated. “Every district, I am required to register to sell there. Most districts, I would have to file and mail a form with a check.”
Robert Golden – President of the Colorado South Metro District Chamber – stated that current regulations are “scaring businesses away.” “This bill would help simplify the problem,” he stated.
Paul Whittler – another Colorado business owner – stated that while he sells across the state, sometimes the registration fees in specific districts are larger than the income he makes. “It costs me $50 to register in that district when I only received $47 in sales,” Whittler said in reference to Pueblo.
Despite a plethora of business owners and advocacy groups coming forward to support Senate Bill 19-131, Senate Democrats sided with the status quo, killing the bill on a party-line vote in the Senate Finance Committee.
“The Senate Finance Committee had a chance to provide some relief to Colorado small businesses, and despite testimony from many of them from across the state, Democrats killed this bill,” said Senator Woodward in response to the outcome. “Unless there is last-minute intervention, each small business in Colorado must bear the burden of determining the sales tax at every single customer among 750 taxing districts then collecting, licensing, and filing the returns. That’s unacceptable.”