The Sales and Use Tax System (SUTS) continued to welcome new cities to the rolls through the early days of March 2021. This brings the total number of home rule cities that have signed onto SUTS to 48 municipalities. Two additional home rules have started the process to come on board. Twenty home rules have yet to sign on due to COVID, discussion agreements, budget reasons, staff shortages, or the approval process.
Reference the SUTS Portal for participating Jurisdiction’s https://colorado.munirevs.com/show-page/?page=26
Below is a snapshot of the overall progress.
- 69% (48) of home rule cities have signed the agreement and are on or are onboarding onto the SUTS system.
- 3% (2) of home rule cities have started the process of securing signatures for the agreement.
- 29% (20) of home rule cities have not yet signed the agreement.
Business Registrations
Business registrations continue to be voluntary and grow with the success of SUTS. There are currently 5,739 businesses that have registered for SUTS.
As the number grows, the state likely to universally enforce, allowing a single Wayfair mandate to allow home rules of Colorado to impose an economic threshold standard.
The Takeaway
Even though SUTS makes it easy to register, taxpayers should be wary of prior nexus in a home rule before registering. You cannot just ignore three to 10 years of prior nexus by registering tomorrow. It is important to understand prior nexus to properly approach future compliance. This might involve remediation in the various home rule cities if prior tax exposure is high. There is no statute of limitations if you have never filed with a tax jurisdiction. So even if a taxpayer did file for a future date, the cities could come back and audit prior years as well as impose penalties and interest for late filings.
States are likely to follow Colorado’s lead here to simplify sales tax administration for vendors and tax authorities alike. Read more at, Will states follow Colorado Sales tax move?
Reach out to me at jvorndran@taxops.com or a member of the SALTovation team at TaxOps if you have questions about state and local tax issues.
Track developments in SUTS:
- CDOR dedicated website for SUTS updates (includes a demonstration of the SUTS system)
- SUTs list of home rule self-collecting taxation jurisdictions
- SUTS participating municipalities, counties and special districts
Judy Vorndran, J.D., CPA, and lead state and local tax partner at TaxOps has been at the table — and in the weeds — guiding dynamic businesses through the morass that is state and local tax for roughly 25 years. Visit SALTovation.com for state and local tax support and subscribe to Tax News for regular updates.
INFORMATION IS FOR EDUCATIONAL PURPOSES ONLY. SEEK PROFESSIONAL TAX ADVICE BEFORE ACTING.
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Judy Vorndran can be reached at jvorndran@taxops.com or 720.227.0420.
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