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HB19-1240

Sales And Use Tax Administration

Concerning sales and use tax administration, and, in connection therewith, establishing economic nexus for retailers without physical presence in the state, codifying the destination sourcing rule with a specified exception, requiring marketplace facilitators to collect and remit sales tax for sales made by marketplace sellers on the marketplace facilitator's marketplace, and repealing obsolete statutory references to remote sellers.
Session:
2019 Regular Session
Subject:
Fiscal Policy & Taxes
Bill Summary

Sales and use tax - changes in law applicable to the state and state collected local governments - establishing economic nexus - codifying destination sourcing - establishing an exception to destination sourcing - requiring marketplace facilitators to collect and remit sales tax on behalf of marketplace sellers. The act:

  • Establishes economic nexus for purposes of retail sales made by retailers without physical presence and specifies that the economic nexus does not apply for sales made by such retailers prior to June 1, 2019;
  • Codifies the department of revenue's destination sourcing rule for state sales tax collection, for sales taxes imposed by any statutory incorporated town, city, or county, and for special districts, but specifies that a small retailer may source its sales to the business' location regardless of where the purchaser receives the tangible personal property or service until a geographic information system provided by the state is online and available for the retailer to determine the taxing jurisdiction in which an address resides;
  • Commencing October 1, 2019, requires marketplace facilitators to collect and remit sales tax on behalf of marketplace sellers that enter into a contract with a marketplace facilitator that facilitates the sale of the marketplace seller's tangible personal property, commodities, or services through the marketplace facilitator's marketplace and also:
  • Allows marketplace facilitators to retain the vendor fee for the collection and remittance of the sales tax on sales made by marketplace sellers on its marketplace;
  • Provides the marketplace facilitator with audit relief if the marketplace facilitator can demonstrate to the satisfaction of the executive director of the department of revenue that it made a reasonable effort to obtain accurate information regarding the obligation to collect tax from the marketplace seller; and
  • Specifies that the marketplace seller does not have the liabilities, obligations, and rights of a retailer if the marketplace facilitator is required to collect and remit sales tax on its behalf, including licensing, collection, and remittance requirements; and
  • Repeals outdated references to remote sales and remote sellers that were added pursuant to House Bill 13-1295, concerning the implementation of the minimum simplification requirements of the proposed federal "Marketplace Fairness Act of 2013" in order for the state to be authorized by the federal government to require remote sellers to collect sales tax on taxable sales made within the state, but are not applicable because Congress never enacted an act that authorizes states to require certain retailers to pay, collect, or remit state or local sales taxes.
    (Note: This summary applies to this bill as enacted.)

Status

Introduced
Passed
Became Law

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Bill Text

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