Polis signs bill lengthening sales tax extension for small businesses

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Published Wednesday, February 2, 2022
by Robert Davis | The Center Square contributor

(The Center Square) - Colorado Governor Jared Polis signed a bill that extends an exception the state's small businesses have received from sales tax sourcing rules through October 1, 2022. 

House Bill 22-1207 gives small businesses more time to remit sales taxes to state regulators. It is also the first piece of legislation signed during the 2022 legislative session. 

It was sponsored by a bipartisan coalition of Sens. Rob Woodward, R-Loveland, and Jeff Bridges, D-Greenwood Village, and Reps. Kevin Van Winkle, R-Highlands Ranch, and Cathy Kipp, D-Fort Collins. 

"Our administration is focused on providing real relief, reducing regulations and cutting red tape for small businesses which are an economic engine for so many communities across our state," Polis said in a statement. "I am proud to support our small businesses that create good jobs, strengthen our communities and economy."

Colorado's sales tax sourcing rules were promulgated two years ago under HB 19-1240. The bill requires large retailers to collect sales taxes where their service or product is delivered rather than where the business is located.  

Small retailers - defined by the bill as earning less than $100,000 in revenue - are still allowed to source their sales taxes from their business location. 

During the pandemic, lawmakers signed bills that exempted some businesses from local sales taxes to reduce both regulatory and financial burdens. The exemption for retailers was extended last year under SB 21-282. Sen.

Bridges said that the newest extension gives lawmakers time to "permanently" fix some of the sales tax sourcing problems. 

"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," Bridges said. 

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