Colorado – Sales Tax Slice: Home Rule Headaches

Bloomberg BNA
By Ariam Tsighe
June 15, 2017

“As state legislative sessions wind down across the country, Colorado is ramping up efforts to institute order among its 69 home rule cities. Last week, its general assembly passed HB 17-1216, creating a simplification task force to streamline the administration of local sales and use taxes imposed under home rule jurisdictions.”

“Home rule cities in Colorado exercise uniquely powerful taxing authority. In addition to setting their own rates, they also administer their own collection, conduct their own audits, and can even determine their own tax base. While that autonomy enables cities to balance their budgets, it can result in sales tax policies that directly conflict with that of the state. Exemptions issued at the state level are not guaranteed to apply in these cities, and vice versa. This requires consumers and retailers alike to keep track of the dizzying differences across products and services throughout the state. For example, the city of Westminster specifically taxes several transactions that are exempted by the state, including energy used for industrial and manufacturing purposes, and sales of food for off-premises consumption.”

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