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I_TaxTask_2017A 11/01/2017 10:01:16 AM Committee Summary

Final

STAFF SUMMARY OF MEETING



SALES AND USE TAX SIMPLIFICATION TASK FORCE

Date: 11/01/2017
ATTENDANCE
Time: 10:01 AM to 01:12 PM
Jahn
X
Sias
*
Place: RM 271
Brendon Reese
X
Bruce Nelson
X
This Meeting was called to order by
Bryan Archer
X
Representative Kraft-Tharp
Heather Pezzella
X
Judith Birch Vorndran
X
This Report was prepared by
Kevin Bommer
X
Luisa Altmann
Kristin Baumgartner
X
Neil Pomerantz
X
Paul Archer
X
Steve Ellington
X
Tracy Hines
X
Neville T.
X
Kraft-Tharp
X
X = Present, E = Excused, A = Absent, * = Present after roll call, R = Remote Participation
Bills Addressed: Action Taken:
Presentation from the Statewide Internet Portal Authority

Presentation from Other Software Providers

Public Comment

Task Force Discussion of Annual Report Draft

Break

Discussion of and Voting on Bill Draft
Witness Testimony and/or Committee Discussion Only

Witness Testimony and/or Committee Discussion Only

Witness Testimony and/or Committee Discussion Only

Witness Testimony and/or Committee Discussion Only

-

Moved to refer Bill 1 to Legislative Council



10:02 AM



Representative Kraft-Tharp made introductory remarks.



Mr. Brendon Reese, Department of Revenue, discussed meetings the department has held with Colorado Counties, Inc. (CCI) and the Colorado Municipal League (CML) to discuss inaccuracies in the mapping programs. Mr. Reese discussed the work the department is currently doing to develop a process through which local jurisdictions would be able to provide information to certified vendors related to the mapping functions to improve accuracy.





10:05 AM -- Presentation from the Statewide Internet Portal Authority



Jack Arrowsmith, Executive Director of the Statewide Internet Portal Authority (SIPA), discussed the role of SIPA.



A copy of the presentation is provided in Attachment A.



Attachment A.pdfAttachment A.pdf



SIPA was created by legislation in 2004 and the authority's responsibility is to connect citizens to government through technology. SIPA provides payment processing for approximately 250 entities throughout Colorado, including the state and local governments. SIPA also provides websites to state and local governments in Colorado at no charge.



Mr. Arrowsmith discussed SIPA's experience working with Grand Junction in developing a sales tax collection system. Once the system was developed, SIPA obtained the system's intellectual property rights and is currently working to market the system to other small to midsize municipalities in Colorado.



Krista Erickson, CEO of Antero CRM, continued the presentation. Antero CRM is the partner used by SIPA to implement the sales tax collection system. Ms. Erickson discussed the use of the Salesforce.com platform in developing the system and the benefits of the system, including the customizability of the system and the self-service portal that can be used by businesses and local government administrators.



Ms. Erickson provided a demonstration of the online sales tax portal, which presented how government administrators and businesses are able to interact with the system.



Ms. Erickson and Mr. Arrowsmith responded to task force questions related to the training required to administer the system; what municipalities are using, or are interested in using, the system; how the system has been funded; and other capabilities of the system.





10:44 AM -- Presentation from Other Software Providers



10:44 AM



Erin Neer, CEO and founder of MUNIRevs, provided a presentation about the sales tax and business licensing system developed by MUNIRevs.



A copy of her presentation is provided in Attachment B.



Attachment B.pdfAttachment B.pdf



Ms. Neer discussed her background as a finance director for a Colorado home rule municipality and her desire to make it easier for municipalities to collect and administer their sales tax and licensing functions, and also make it easier for business owners to remit sales taxes. MUNIRevs currently serves 20 percent of the home rule municipalities and over 20,000 businesses. Ms. Neer discussed the pilot program that MUNIRevs will be starting January 1, 2018, through which a business could file sales taxes for multiple participating jurisdictions through a single portal.



Ms. Neer discussed the benefits of having a central registration system through a single vendor that is separate from the sales tax remittance process. This central registration system could allow home rule municipalities and businesses to have a single point of registration information and integrate with the Department of Revenue's licensing process.





Ms. Neer discussed how multiple vendors can be involved in the sales tax remittance process. She also discussed creating a single remittance point, which would allow businesses to choose the best software solution for their business.



Ms. Neer then provided an overview of the MUNIRevs system that will be part of the pilot program, including the online single registration and renewal system, the single sales and use tax remittance system, and the pricing structures.



10:55 AM



Eric Deffenbaugh, Fast Enterprises, discussed the products and services his company provides to governments of various sizes in the areas of tax administration, Division of Motor Vehicles, and Unemployment Insurance.



A copy of his presentation is provided in Attachment C.



Attachment C.pdfAttachment C.pdf



Mr. Deffenbaugh spoke about Fast Enterprises' past and current involvement with various projects within the state of Colorado. He discussed various national efforts to simplify sales tax processing and the various models being used across the country for sales tax administration. He also discussed the benefits of a central administration system and the requirements of any technology solutions.



Mr. Deffenbaugh discussed the Fast Enterprises software that was built to support government, primarily as a tax administration package, and provided an overview of the capabilities of the system.



11:13 AM



Mr. Deffenbaugh and Ms. Neer responded to questions from the task force.





11:20 AM -- Public Comment



11:20 AM --
Vickie Hurst, LafargeHolcim and Aggregate Industries, provided testimony related to the need to also focus on the complexity of of the state's use tax system, especially as it relates to the building materials industry. Ms. Hurst also discussed the complexity related to overlapping boundaries, the need for historical records for jurisdictional boundaries, and the need for standard definitions to be applicable and consistent with industry practices. Ms. Hurst explained that her company's greatest challenge is the differing rules between the state and home rule cities and between the cities themselves. Ms. Hurst responded to questions from the task force.



11:41 AM --
Jeff Hansen, City of Golden, discussed concerns within the proposed legislation related to creating a taxability matrix. Mr. Hansen responded to questions from the task force.



11:51 AM --
Lee Nelson, American Furniture Warehouse, provided testimony in support of having a central place to remit sales taxes and for sales tax licensing. Mr. Nelson also spoke about their experience working with the MUNIRevs system.



11:53 AM --
Laura Williams, Martin Marietta, provided testimony related to the need for an industry-specific taxability matrix to identify exemptions. Ms. Williams responded to questions from the task force.





11:55 AM -- Task Force Discussion of Annual Report Draft



The task force and staff discussed the contents of the draft annual report.



A final version of the annual report can be found here: https://leg.colorado.gov/node/1183216.





12:21 PM -- Break



The task force took a brief break.



12:40 PM -- Discussion of and Voting on Bill Draft



Task force members discussed the proposed Bill 1, Department of Revenue Issue Sales Tax Request for Information, and several proposed amendments. According to Joint Rule 24A (d)(2.7)(B), only legislative members of the task force may vote to approve proposed legislation.

BILL: Discussion of and Voting on Bill Draft
TIME: 01:07:24 PM
MOVED: Sias
MOTION: Move that Bill 1, as amended, be forwarded by the task force to Legislative Council. The motion passed on a vote of 4-0.
SECONDED: Neville T.
VOTE
Jahn
Yes
Sias
Yes
Brendon Reese
Bruce Nelson
Bryan Archer
Heather Pezzella
Judith Birch Vorndran
Kevin Bommer
Kristin Baumgartner
Neil Pomerantz
Paul Archer
Steve Ellington
Tracy Hines
Neville T.
Yes
Kraft-Tharp
Yes
Final YES: 4 NO: 0 EXC: 0 ABS: 0 REMOTE PARTICIPATION: 0 FINAL ACTION: PASS


BILL: Discussion of and Voting on Bill Draft
TIME: 12:48:15 PM
MOVED: Sias
MOTION: Adopt amendment L.001 (Attachment D). This motion was withdrawn.
SECONDED: Neville T.
VOTE
Jahn
Sias
Brendon Reese
Bruce Nelson
Bryan Archer
Heather Pezzella
Judith Birch Vorndran
Kevin Bommer
Kristin Baumgartner
Neil Pomerantz
Paul Archer
Steve Ellington
Tracy Hines
Neville T.
Kraft-Tharp
YES: 0 NO: 0 EXC: 0 ABS: 0 REMOTE PARTICIPATION: 0 FINAL ACTION: Withdrawn



Attachment D.pdfAttachment D.pdf


BILL: Discussion of and Voting on Bill Draft
TIME: 01:00:35 PM
MOVED: Sias
MOTION: Adopt amendment L.004 (E). The motion passed without objection.
SECONDED: Neville T.
VOTE
Jahn
Sias
Brendon Reese
Bruce Nelson
Bryan Archer
Heather Pezzella
Judith Birch Vorndran
Kevin Bommer
Kristin Baumgartner
Neil Pomerantz
Paul Archer
Steve Ellington
Tracy Hines
Neville T.
Kraft-Tharp
YES: 0 NO: 0 EXC: 0 ABS: 0 REMOTE PARTICIPATION: 0 FINAL ACTION: Pass Without Objection



Attachment E.pdfAttachment E.pdf


BILL: Discussion of and Voting on Bill Draft
TIME: 01:00:59 PM
MOVED: Sias
MOTION: Adopt amendment L.002 (Attachment F). The motion passed without objection.
SECONDED: Jahn
VOTE
Jahn
Sias
Brendon Reese
Bruce Nelson
Bryan Archer
Heather Pezzella
Judith Birch Vorndran
Kevin Bommer
Kristin Baumgartner
Neil Pomerantz
Paul Archer
Steve Ellington
Tracy Hines
Neville T.
Kraft-Tharp
YES: 0 NO: 0 EXC: 0 ABS: 0 REMOTE PARTICIPATION: 0 FINAL ACTION: Pass Without Objection



Attachment F.pdfAttachment F.pdf


BILL: Discussion of and Voting on Bill Draft
TIME: 01:03:57 PM
MOVED: Sias
MOTION: Adopt amendment L.003 (Attachment G). The motion passed without objection.
SECONDED: Neville T.
VOTE
Jahn
Sias
Brendon Reese
Bruce Nelson
Bryan Archer
Heather Pezzella
Judith Birch Vorndran
Kevin Bommer
Kristin Baumgartner
Neil Pomerantz
Paul Archer
Steve Ellington
Tracy Hines
Neville T.
Kraft-Tharp
YES: 0 NO: 0 EXC: 0 ABS: 0 REMOTE PARTICIPATION: 0 FINAL ACTION: Pass Without Objection



Attachment G.pdfAttachment G.pdf



01:07 PM



The task force discussed bill sponsorship and in which chamber the bill would start in if approved by Legislative Council.





01:10 PM




Representative Kraft-Tharp made closing remarks related to the work of the task force.





01:12 PM



The committee adjourned.