Colorado Department of Revenue extends grace period for new sales tax rules to May 31, 2019
December 11, 2018
A U.S. Supreme Court ruling will change how online retailers pay sales tax, but in Colorado, new rules will be delayed until the State Legislature has had an opportunity to consider them.
"As part of our rulemaking process to implement sales tax rules for in-state and out-of-state retailers, we have heard from legislators and the business community. The (Colorado) Department of Revenue agrees it is important for the state to take the time to get this right," CDR Executive Director Mike Hartman said in a news release.
The U.S. Supreme Court ruled in June on the case of South Dakota v Wayfair, Inc., finding that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state. The decision overturned Quill Corp. v. North Dakota (1992), which barred states from compelling retailers to collect sales or use taxes in connection with mail order or Internet sales made to their residents, unless those retailers have a physical presence in the taxing state.
The court's ruling triggered emergency rulemaking in Colorado that originally set March 31 as the date at when retailers would need to comply with new sales tax collection rules.
"… The department is extending the automatic reprieve for Colorado businesses and out-of-state retailers to comply with the emergency rules from the current March 31 deadline to May 31," Hartman said.
The May date may also be extended if circumstances warrant it, Hartman said, adding, "This additional time will give the state legislature an opportunity to find innovative solutions to streamline and simplify our sales tax collection laws in accordance with the wishes of the residents of the state of Colorado."
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However, CDR requests that businesses able to begin collecting and remitting sales taxes on Internet sales begin to do so as quickly as possible and before the May 31.
"The department has upgraded its systems and processes to make compliance as simple as possible. We will continue to engage the business community to address their remaining concerns," Hartman said. "This is an opportunity to simplify sales tax for all parties: for businesses that collect and remit sales tax, for customers who pay it, and for those of us in state government whose obligation it is to carry out the tax laws passed by the state legislature. No one desires a streamlined and simplified sales tax collection and compliance system more than the Department of Revenue."