Legislation to give small businesses a break is first bill signed into law during 2022 legislative session
On Monday, Governor Jared Polis signed into law a tax extension that will continue to save small business retailers money through October 2022. HB22-1027, sponsored by Senator Jeff Bridges (D-Greenwood Village), extends the destination sourcing deadline from February 1, 2022 to October 1, 2022, allowing Colorado small businesses more time before needing to remit sales taxes based on the buyer’s address.
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Colorado State Capitol, Image courtesy of Good Free Photos.
The bill is the first to be signed into law during the 2022 legislative session.
“This bill came directly from a conversation I had with a constituent. She was asked to pay $25 in licensing fees in order to pay less than 25 cents in sales tax. That’s crazy,” said Senator Bridges. “This bill gives small businesses the break they need while we fix that problem permanently. Small businesses are the backbone of our economy, and this is just one of many ways we’re working to save small business owners money.”
HB19-1240 codified the Department of Revenue’s destination-sourcing rules for state and local sales tax collection, requiring retailers to collect sales tax where their service or product is delivered, rather than where the business is located. The bill allowed small retailers – those with less than $100,000 in annual sales – to source sales to their Colorado business location until an online sales tax rate lookup tool developed by the state became available.
The deadline for small retailers to begin destination sourcing was extended through SB21-282 and now again, by HB22-1027 so that the department can ensure a smooth and painless transition for small business retailers.
HB22-1027 cleared the Senate with unanimous support before being sent to the Governor’s desk for signature.
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