I_TaxTask_2022A 07/27/2022 10:01:33 AM Committee Summary

Ezequiel Vasquez, City of Arvada, Jeff Edwards, City of Aurora, and Don Korte, City and County of Denver, provided an overview of building permits and construction use tax from a municipal perspective.  A copy of their presentation can be found here: https://leg.colorado.gov/sites/default/files/images/building_permits_con...

Laura Williams, representing Martin Marietta, provided an overview of use tax on building permits from a building supplier perspective. A copy of the presentation can be found here: https://leg.colorado.gov/sites/default/files/images/building_permit_over...

Jonathan Gesick, representing ProCode, Inc., provided an overview of Cascade software to track building permits.  A copy of the presentation can be found here: https://leg.colorado.gov/sites/default/files/images/sale_tax_and_cascade....

Members of the panel responded to questions from members of the task force related to how other states impose use tax on building materials, what could be improved with the current system, past efforts by the Colorado Municipal League to work with municipalities to simplify and standardize building permit forms across jurisdictions, and other issues related to the use tax on building materials process.

Josh Pens, Colorado Department of Revenue, provided a follow up on the department's proposal to simplify the state's sales tax return.  The state's current return form can be found here: https://tax.colorado.gov/sites/tax/files/documents/DR0100_2022.pdf.  Mr. Pens also provided examples of the current spreadsheet return and an example of the simplest form that may be possible.  Mr. Pens also discussed potential impacts of any change on the local distribution of cigarette and retail marijuana taxes, regional tourism tax increment district taxes, the loss of tax expenditure information, and other considerations related to the proposal.

The task force discussed the form simplification proposal.

Jessica Herrera, Office of Legislative Legal Services, provided an overview of the Wayfair v. City of Lakewood court filing.  The memo discussed by Ms. Herrera can be found here: https://leg.colorado.gov/sites/default/files/images/wayfair_llc_v._city_... A copy of the complaint can be found here: https://leg.colorado.gov/sites/default/files/images/complaint_06-22-2022....

Ms. Herrera responded to questions from members of the task force.

The task force broke for lunch.

The task force reconvened.

Don Korte and Kinsa Veasley, City and County of Denver, provided feedback on the Sales and Use Tax Simplification (SUTS) system. Issues discussed with the system include:

- still mostly a manual system for the cities, for example getting returns from SUTS without account numbers and research required by staff;

- missing license tool;

- lag time between when taxpayers file and when the tax is remitted to the municipalities; and

- lack of communication between SUTS and GenTax.

Ashley Keller, City of Golden, discussed feedback on the SUTS system, including the lack of account numbers on return, confusion over local business licensing requirements, issues related to $0 returns, no listing of deductions on the returns, and lack of notifications to municipalities of business changes.

Judy Vorndran, representing TaxOps, discussed issues related to the SUTS system from a business perspective, including the fees associated with using the SUTS system.

Flori Dickson, representing Automated Business Products, discussed feedback on the SUTS system, including the fees associated with using the system, the fact that not all home rule municipalities are required to be on the SUTS system, and issues related to $0 filings.

Members of the panel responded to questions from members of the task force.  Josh Pens, Department of Revenue, discussed updates related to fees to use the system.  Members of the panel continued to respond to questions.

James Taurman, Kim Tinnell, and Trey Standley, representing the Office of the State Auditor, provided an overview of the office's evaluation of sales and use tax expenditures.  The memo reviewed can be found here: https://leg.colorado.gov/sites/default/files/images/osa_reports_summary_....

Ms. Tinnell continued the presentation with a discussion of the office's evaluation on the sales to charitable organizations exemption.  A copy of the report can be found here: https://leg.colorado.gov/sites/default/files/images/osa_evaluation_sales....

Staff from the auditor's office responded to questions from the task force.

The task force received a letter from Expedia Group, which can be found here: https://leg.colorado.gov/sites/default/files/images/eg_co_suts_task_forc...

Trevor Vaughn, representing the City of Aurora, provided public comment related to Aurora's process to join the SUTS system.

Representative Kipp provided an overview of agenda items for the August 10 task force meeting.