The Colorado Department of Revenue (DOR) issued a statement on December 6, 2018, extending the grace period for compliance with new Wayfair rules to May 31, 2019. The public statement reads:
To All Interested Parties,
The Colorado Department of Revenue Executive Director Mike Hartman issued the following statement today regarding proposed sales tax rules to implement the U.S. Supreme Court’s South Dakota v Wayfair decision and destination sourcing
As part of our rulemaking process to implement sales tax rules for in-state and out-of-state retailers, we have heard from legislators and the business community, and the Department of Revenue agrees it is important for the state to take the time to get this right.
As such, the Department is extending the automatic reprieve for Colorado businesses and out-of-state retailers to comply with the emergency rules from the current March 31, 2019 deadline to May 31, 2019. We will evaluate the need for another extension as May 31 nears. This additional time will give the state legislature an opportunity to find innovative solutions to streamline and simplify our sales tax collection laws in accordance with the wishes of the residents of Colorado.
Despite the automatic reprieve, the Department requests that businesses with the sophistication and capability to collect and remit sales tax on internet sales based on where the good or service is being delivered do so as quickly as possible in advance of the May 31, 2019 enforcement deadline. The Department has upgraded its systems and processes to make compliance as simple as possible. We will continue to engage the business community to address their remaining concerns.
This is an opportunity to simplify sales tax for all parties: for businesses that collect and remit sales tax, for customers who pay it, and for those of us in state government whose obligation it is to carry out the tax laws passed by the state legislature. No one desires a streamlined and simplified sales tax collection and compliance system more than the Department of Revenue.
Colorado Department of Revenue
Businesses have been scrambling to meet new destination sourcing Wayfair requirements in Colorado. Meanwhile, lawmakers, business owners, and tax experts have been working to simplify the exceedingly complicated sales tax regime in the state.
I am pleased that the DOR recognizes these two opposing movements–one creating a larger burden on businesses charged with sales tax collections and the other attempting to simplify the system and lessen that burden to the benefit of businesses, consumers and taxing authorities.
The DOR listened to feedback. By extending the grace period, and stating that it will evaluate the need for another extension as May 31 nears, the DOR is recognizing the important work taking place within the legislative Sales Tax Task Force, of which I am a member. This additional time should, as the statement says, “give the state legislature an opportunity to find innovative solutions to streamline and simplify our sales tax collection laws in accordance with the wishes of the residents of Colorado.”
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