Vendor fee rate increase - use of increased funds for affordable housing grants and loans. Beginning January 1, 2020, the act increases the vendor fee, which is an amount that a retailer is permitted to retain for its expenses incurred in collecting and remitting the state sales tax, from 3% to 4%, subject to a $1,000 monthly cap. This limit applies regardless of the number of the retailer's locations, and a vendor with multiple locations is required to register all locations under one account with the department of revenue.
The state treasurer is annually required to credit an amount equal to the increase in sales taxes attributable to the vendor fee changes, minus a specified amount, to the housing development grant fund, which the division of housing in the department of local affairs (division) uses to make grants and loans to improve, preserve, or expand the supply of affordable housing in the state. The division is required to annually award at least 1/3 of this money for affordable housing projects for households whose annual income is less than or equal to 30% of the area median income. The increase in sales taxes attributable to the vendor fee changes that result from the act are excluded from the definition of "state sales tax increment revenue" for purposes of the "Colorado Regional Tourism Act" so that the increase is payable to the state and not an applicable financing entity.
(Note: This summary applies to this bill as enacted.)