CO Code § 39-26-118 (2021)
2021 Colorado Code|Title 39 - Taxation|Article 26 - Sales and Use Tax|Part 1 - Sales Tax|§ 39-26-118. Recovery of Taxes, Penalty, and Interest - Repeal

     All sums of money paid by the purchaser to the retailer as taxes imposed by this article 26 shall be and remain public money, the property of the state of Colorado, in the hands of such retailer, and the retailer shall hold the same in trust for the sole use and benefit of the state of Colorado until paid to the executive director of the department of revenue, and, for failure to so pay to the executive director, the retailer shall be punished as provided by law.      This subsection (1) does not apply to a qualifying retailer retaining state sales tax as allowed in section 39-26-105 (1.3). (b) (I) This subsection (1) does not apply to a qualifying retailer retaining state sales tax as allowed in section 39-26-105 (1.3).    This subsection (1)(b) is repealed, effective December 31, 2026.              If a person neglects or refuses to make a timely return in payment of the tax or to pay or correctly account for any tax as required by this article 26, the executive director of the department of revenue shall make an estimate, based upon the information that may be available, of the amount of taxes due or not accounted for or incorrectly accounted for on a return for the period for which the taxpayer is delinquent. The executive director shall add to the estimated amount of taxes due or not accounted for interest if applicable under section 39-21-110.5, and a penalty equal to the greater of: (a) (I)If a person neglects or refuses to make a timely return in payment of the tax or to pay or correctly account for any tax as required by this article 26, the executive director of the department of revenue shall make an estimate, based upon the information that may be available, of the amount of taxes due or not accounted for or incorrectly accounted for on a return for the period for which the taxpayer is delinquent. The executive director shall add to the estimated amount of taxes due or not accounted for interest if applicable under section 39-21-110.5, and a penalty equal to the greater of:   The sum of fifteen dollars; or    Ten percent of such unpaid, unaccounted, or incorrectly accounted amount, plus one-half percent per month from the date when due, not exceeding eighteen percent in the aggregate.       The executive director shall provide the delinquent taxpayer written notice of the estimated taxes, penalty, and interest by first-class mail as set forth in section 39-21-105.5.       Such estimate shall thereupon become a notice of deficiency as provided in section 39-21-103. A hearing may be held and the executive director shall make a final determination pursuant to that section. The taxpayer may appeal the said final determination in the manner provided in section 39-21-105.         If any taxes, penalty, or interest imposed by this article and shown due by returns filed by the taxpayer or as shown by assessments duly made as provided in this section are not paid within five days after the same are due, the executive director shall issue a notice, setting forth the name of the taxpayer, the amount of the tax, penalties, and interest, the date of the accrual thereof, and that the state of Colorado claims a first and prior lien therefor on the real and tangible personal property of the taxpayer except as to preexisting claims or liens of a bona fide mortgagee, pledgee, judgment creditor, or purchaser whose rights have attached prior to the filing of the notice as provided in this section on property of the taxpayer, other than the goods, stock in trade, and business fixtures of such taxpayer.    Said notice shall be on forms prepared by the executive director, and shall be verified by him or his duly qualified deputy, or any duly qualified agent of the executive director, whose duties are the collection of such tax, and may be filed in the office of the county clerk and recorder of any county in the state in which the taxpayer owns real or tangible personal property, and the filing of such notice shall create such lien on such property in that county and constitute notice thereof. After said notice has been filed, or concurrently therewith, or at any time when taxes due are unpaid, whether such notice is filed or not, the executive director may issue a warrant directed to any duly authorized revenue collector, or to the sheriff of any county of the state, commanding him to levy upon, seize, and sell sufficient of the real and personal property of the tax debtor found within his county for the payment of the amount due, together with interest, penalties, and costs, as may be provided by law, subject to valid preexisting claims or liens.       Such revenue collector or the sheriff shall forthwith levy upon sufficient of the property of the taxpayer, or any property used by such taxpayer in conducting his retail business, except property made exempt from lien pursuant to the provisions of section 39-26-117 (1)(b), and said property so levied upon shall be sold in all respects with like effect and in the same manner as is prescribed by law in respect to executions against property upon judgment of a court of record, and the remedies of garnishments shall apply. The sheriff shall be entitled to such fees in executing such warrant as are allowed by law for similar services.    Any lien for taxes as shown on the records of the county clerk and recorders as provided in this section, upon payment of all taxes, penalties, and interest covered thereby, shall be released by the executive director in the same manner as mortgages and judgments are released.    It is the duty of any county clerk and recorder to whom such notices are sent to file and record the same without cost or charge.      The executive director may also treat any such taxes, penalties, or interest due and unpaid as a debt due the state from the vendor. In case of failure to pay the tax or any portion thereof, or any penalty or interest thereon when due, the executive director may receive at law the amount of such taxes, penalties, and interest in such county or district court of the county wherein the taxpayer resides or has his principal place of business having jurisdiction of the amounts sought to be collected. The return of the taxpayer or the assessment made by the executive director, as provided in this article, shall be prima facie proof of the amount due.    Such actions may be actions in attachment, and writs of attachment may be issued to the sheriff, and in any such proceeding no bond shall be required of the executive director, nor shall any sheriff require of the executive director an indemnifying bond for executing the writ of attachment or writ of execution upon any judgment entered in such proceedings; and the executive director may prosecute appeals in such cases without the necessity of providing bond therefor. It is the duty of the attorney general or any district attorney, when requested by the executive director, to commence action for the recovery of taxes due under this article, and this remedy shall be in addition to all other existing remedies or remedies provided in this article and article 21 of this title.       In any action affecting the title to real estate or the ownership or rights to possession of personal property, the state of Colorado may be made a party defendant for the purpose of obtaining an adjudication or determination of its lien upon the property involved therein. In any such action, service of summons upon the executive director or any person in charge of the office of the executive director shall be sufficient service and binding upon the state of Colorado.    The executive director is authorized to waive, for good cause shown, any penalty or interest assessed as provided in this article and article 21 of this title, and interest imposed in excess of the rate imposed under section 39-21-110.5 shall be deemed a penalty.     History. Source: L. 35: P. 1015, § 11. CSA: C. 144, § 25. L. 37: P. 1094, § 1. L. 39: P. 505, § 3. CRS 53: § 138-6-24. C.R.S. 1963: § 138-5-24. L. 64: Pp. 184, 326, §§ 3, 314. L. 65: P. 1150, § 3. L. 69: P. 1138, § 3. L. 77: (2)(a) amended, p. 743, § 3, effective July 1. L. 81: (2)(a) and (9) amended, p. 1867, § 12, effective June 8. L. 85: (2)(a) amended, p. 1257, § 11, effective January 1, 1986. L. 86: (2)(a) amended, p. 1222, § 36, effective May 30. L. 89: (9) amended, p. 1497, § 2, effective June 7. L. 96: (2)(a) amended, p. 167, § 9, effective July 1. L. 2009: (2)(a) amended,(HB 09-1101), ch. 68, p. 236, § 1, effective March 25. L. 2020: (2)(a) amended,(HB 20-1174), ch. 104, p. 400, § 1, effective September 14. L. 2020, 1st Ex. Sess.: (1) amended, (HB 20B-1004), ch. 3, p. 24, § 4, effective December 7. History. Source: L. 35: P. 1015, § 11. CSA: C. 144, § 25. L. 37: P. 1094, § 1. L. 39: P. 505, § 3. CRS 53: § 138-6-24. C.R.S. 1963: § 138-5-24. L. 64: Pp. 184, 326, §§ 3, 314. L. 65: P. 1150, § 3. L. 69: P. 1138, § 3. L. 77: (2)(a) amended, p. 743, § 3, effective July 1. L. 81: (2)(a) and (9) amended, p. 1867, § 12, effective June 8. L. 85: (2)(a) amended, p. 1257, § 11, effective January 1, 1986. L. 86: (2)(a) amended, p. 1222, § 36, effective May 30. L. 89: (9) amended, p. 1497, § 2, effective June 7. L. 96: (2)(a) amended, p. 167, § 9, effective July 1. L. 2009: (2)(a) amended,(HB 09-1101), ch. 68, p. 236, § 1, effective March 25. L. 2020: (2)(a) amended,(HB 20-1174), ch. 104, p. 400, § 1, effective September 14. L. 2020, 1st Ex. Sess.: (1) amended, (HB 20B-1004), ch. 3, p. 24, § 4, effective December 7.    Cross references:   For the legislative declaration in HB 20B-1004, see section 1 of chapter 3, Session Laws of Colorado 2020, First Extraordinary Session.   ANNOTATION   Law reviews. For article, “An Introduction to Tax Liens”, see 13 Colo. Law. 399 (1984). For article, “Survey of Colorado Tax Liens”, see 14 Colo. Law. 1765 (1985).   Section constitutional. The provisions of this section, giving to the director of revenue the power of distraint, levy, and sale, do not unconstitutionally confer judicial powers upon the executive branch of government. Sweeney Elec. Co. v. Poston, 110 Colo. 139 , 132 P.2d 443 (1942).   Retailer collecting tax deemed trustee. A retailer who collects the tax by virtue of this section is a trustee and answerable to the state for such moneys until they are paid over to the state treasurer. Sweeney Elec. Co. v. Poston, 110 Colo. 139 , 132 P.2d 443 (1942).   Revocation of authority to remit sales tax on cash receipt basis is not notice of deficiency. A determination that sales tax on credit sales should be remitted on a sales or accrual basis and the revocation of authority to remit on cash receipt basis was not a notice of deficiency and assessment of tax under subsection (2). Montgomery Ward & Co. v. State Dept. of Rev., 675 P.2d 318 (Colo. App. 1983).   Section 39-26-125 governs the department's attempt to collect sales tax in general, including those held in trust by virtue of this section, which merely describes the nature of the taxes held by the retailer and does not purport to usurp the mandates of the statute of limitations. F.W. Woolworth Co. v. State Dept. of Rev., 699 P.2d 1 (Colo. App. 1984).   In order to enforce liens for sales taxes, the department of revenue may activate its liens by recording the notice of delinquency pursuant to this section or by the more immediate means of distraint in accordance with § 39-21-114 . ITT Diversified Credit Corp. v. Couch, 669 P.2d 1355 (Colo. 1983).   Applied in Dye Constr. Co. v. Dolan, 41 Colo. App. 293, 589 P.2d 497 (1978).