CO Code § 39-26-105 (2021)
2021 Colorado Code|Title 39 - Taxation|Article 26 - Sales and Use Tax|Part 1 - Sales Tax|§ 39-26-105. Vendor Liable for Tax - Definitions - Repeal

        Except as provided in subsections (1)(a)(I)(B), (1.3), and (1.5) of this section, every retailer shall, irrespective of the provisions of section 39-26-106, be liable and responsible for the payment of an amount equivalent to two and ninety one-hundredths percent of all sales made on or after January 1, 2001, by the retailer of commodities or services as specified in section 39-26-104. (a) (I) (A) Except as provided in subsections (1)(a)(I)(B), (1.3), and (1.5) of this section, every retailer shall, irrespective of the provisions of section 39-26-106, be liable and responsible for the payment of an amount equivalent to two and ninety one-hundredths percent of all sales made on or after January 1, 2001, by the retailer of commodities or services as specified in section 39-26-104.    A retailer who has received in good faith from a qualified purchaser a direct payment permit number issued pursuant to section 39-26-103.5 shall not be liable or responsible for the collection and remittance of the tax imposed by this article on any sale made to the qualified purchaser that is paid for directly from such qualified purchaser's funds and not the personal funds of any individual.       Repealed.       Every retailer shall, before the twentieth day of each month, make a return to the executive director of the department of revenue for the preceding calendar month. The executive director shall determine what information the returns must contain, how the returns must be made, and the type of forms that must be used.      Every retailer shall remit, along with the return required in subsection (1)(b) of this section, an amount equivalent to the percentage on sales as specified in subsection (1)(a)(I) of this section to the executive director of the department of revenue, less an amount as set forth in subsection (1)(c)(II) or (1)(d) of this section to cover the retailer's expense in the collection and remittance of said tax. (c) (I) Every retailer shall remit, along with the return required in subsection (1)(b) of this section, an amount equivalent to the percentage on sales as specified in subsection (1)(a)(I) of this section to the executive director of the department of revenue, less an amount as set forth in subsection (1)(c)(II) or (1)(d) of this section to cover the retailer's expense in the collection and remittance of said tax.    For sales made prior to January 1, 2020, the amount retained by a retailer to cover the retailer's expense in collecting and remitting tax pursuant to this section is three and one-third percent of all sales tax reported.    If any retailer is delinquent in remitting said tax, other than in unusual circumstances shown to the satisfaction of the executive director of the department of revenue, the retailer shall not be allowed to retain any amounts under this subsection (1)(c) or subsection (1)(d) of this section to cover such retailer's expense in collecting and remitting said tax, and an amount equivalent to the said percentage, plus the amount of any local vendor expense that may be allowed by the local government to the vendor, shall be remitted to the executive director by any such delinquent vendor. Any local vendor expense remitted to the executive director shall be deposited to the state general fund.         For sales made on or after January 1, 2020, the amount retained by a retailer to cover the retailer's expense in collecting and remitting tax in accordance with this section is four percent of the tax reported; except that a retailer shall not retain more than one thousand dollars in any filing period. (d) (I) For sales made on or after January 1, 2020, the amount retained by a retailer to cover the retailer's expense in collecting and remitting tax in accordance with this section is four percent of the tax reported; except that a retailer shall not retain more than one thousand dollars in any filing period.    A retailer with multiple locations is treated as a single retailer for purposes of this subsection (1)(d) and is required to register all locations under one account with the department of revenue.    If a retailer is permitted to retain an amount to cover the retailer's expense in collecting and remitting local sales tax that is the same amount as permitted by the state under this section, then such amount is the amount that was permitted as of December 31, 2019.    Beginning January 1, 2022, a retailer is not permitted to retain any money to cover the retailer's expenses in collecting and remitting tax in accordance with this section for any filing period that the retailer's total taxable sales were greater than one million dollars. (1.3)   As used in this subsection (1.3), unless the context otherwise requires:   “Alcoholic beverages drinking places industry” means establishments that may make sandwiches or light snacks available for consumption, that are open to the public, and are known as bars, taverns, sales rooms, vintner's restaurants, brew pubs, distillery pubs, nightclubs, or drinking places primarily engaged in preparing and serving alcoholic beverages for immediate, on-premise consumption. “Alcoholic beverages drinking places industry” does not mean breweries, distilleries, wineries, and retail liquor, or drug stores that offer tastings.  (I.3) “Catering industry” means establishments, not including the mobile food services industry or the food services contractor industry, that are primarily engaged in providing single event-based food services for events such as graduation parties, wedding receptions, business or retirement luncheons, or trade shows and that have equipment and vehicles to transport meals and snacks to events or to prepare food at an off-premise site. “Catering industry” includes banquet halls with catering staff.   (I.5) “Food services contractor industry” means establishments, not including the catering industry, that are primarily engaged in providing food services, for the convenience of the contracting organization or the contracting organization's customers, at institutional, governmental, commercial, or industrial locations of others, based on contractual arrangements with these types of organizations for a specified period of time, such as airline food service contractors; food concession contractors at sporting, entertainment, or convention facilities; or cafeteria food services contractors at schools, hospitals, or government offices.   (I.7) “Hotel-operated restaurant, bar, or catering service” means a restaurant or other eating places industry establishment or an alcoholic beverages drinking places industry establishment located on the premises of an establishment primarily engaged in providing short-term lodging facilities and known as a hotel, motor hotel, resort hotel, motel, bed-and-breakfast inn, tourist home, guest house, youth hostel, or housekeeping cabin, including a hotel facility with a casino on the premises. “Hotel-operated restaurant, bar, or catering service” includes the sale of single event-based food services described in subsection (1.3)(a)(I.3) of this section on the premises of the establishment. “Hotel-operated restaurant, bar, or catering service” does not include sales of rooms or accommodations, gifts and sundries, recreational services, conference rooms, convention services, laundry services, parking, and other services.     “Mobile food services industry” means retailers primarily engaged in preparing and serving meals, snacks, or nonalcoholic beverages for immediate consumption from motorized vehicles or nonmotorized carts. “Mobile food services industry” does not mean retailers delivering food prepared only by third parties and does not mean retailers shipping meal kits, heat-at-home meals, or other unprepared food to consumers for home consumption.    (A) “Qualifying retailer” means, for the specified sales tax period in subsection (1.3)(a)(V)(A) of this section, a retailer doing business in the state that timely files sales tax returns as required under subsection (1)(b) of this section and section 39-26-109, and that operates in the alcoholic beverages drinking places industry, the restaurant and other eating places industry, or the mobile food services industry.    “Restaurant and other eating places industry” means establishments, not including establishments selling food from mobile vehicles, establishments presenting live theatrical productions and other entertainment facilities, hotels or bed and breakfast establishments, specialty food stores, vending machines, caterers or other food service contractors, or private cafeterias at workplaces, universities, or hospitals, that are open to the public, are known as restaurants, cafes, lunch counters, and carryout shops, and are primarily engaged in one of the following:   Providing prepared food services at a fixed, physical premises to patrons who order and are served while seated, and who pay after eating;    Providing prepared food services at a fixed, physical premises to patrons who generally order or select items and who pay before eating; or    Preparing or serving specialty snacks or nonalcoholic beverages at a fixed, physical premises to patrons who pay before eating for consumption on or near the premises.       (A) “Specified sales tax period” means sales made in November 2020, December 2020, January 2021, and February 2021, for which monthly returns must be filed pursuant to subsection (1)(b) of this section, on December 21, 2020, January 20, 2021, February 22, 2021, and March 22, 2021, respectively.    “State net taxable sales” means all sales made by the qualifying retailer during the specified sales tax period of tangible personal property, commodities, and services as specified in section 39-26-104, less any deductions and exemptions authorized in this article 26, without regard to the deduction authorized in this subsection (1.3).         A qualifying retailer in the alcoholic beverages drinking places industry, in the restaurant and other eating places industry, in the food services contractor industry, or operating a hotel-operated restaurant, bar, or catering service may deduct from state net taxable sales the lesser of state net taxable sales or seventy thousand dollars and retain the resulting sales tax collected for each month in the specified sales tax period. (b) (I) A qualifying retailer in the alcoholic beverages drinking places industry, in the restaurant and other eating places industry, in the food services contractor industry, or operating a hotel-operated restaurant, bar, or catering service may deduct from state net taxable sales the lesser of state net taxable sales or seventy thousand dollars and retain the resulting sales tax collected for each month in the specified sales tax period.    One deduction described in subsection (1.3)(b)(I) of this section is allowed per month for each of up to five fixed physical premises that are properly licensed under section 39-26-103 (2)(a), to a qualifying retailer in the alcoholic beverages drinking places industry, in the restaurant and other eating places industry, in the food services contractor industry, or operating a hotel-operated restaurant, bar, or catering service. No deduction is allowed for:   Nonphysical sites that are established for purposes of reporting sales delivered into a taxing area; or    Any temporary place of business or special event.          A qualifying retailer in the mobile food services industry may deduct from state net taxable sales the lesser of aggregate state net taxable sales for all sites or seventy thousand dollars per motorized vehicle or nonmotorized cart, not to exceed five motorized vehicles or nonmotorized carts, and retain the resulting state sales tax collected for each month in the specified sales tax period.  (c.5) A qualifying retailer in the catering industry may deduct from state net taxable sales the lesser of aggregate state net taxable sales for all events or seventy thousand dollars, and retain the resulting state sales tax collected for each month in the specified sales tax period.     If a qualifying retailer is in both the restaurant and other eating places industry and the mobile food services industry, the qualifying retailer may claim the deduction for no more than five physical sites and for no more than five motorized vehicles and nonmotorized carts.    The qualifying retailer must continue to hold state sales taxes in excess of the amount retained in trust until paid to the department of revenue as specified in section 39-26-118.    The deduction and sales tax retention allowed in this subsection (1.3) applies to state net taxable sales only. Qualifying retailers may not retain payment of city, county, or special district sales taxes collected by the department of revenue. Nothing in this subsection (1.3) prevents any local government from rebating sales taxes collected by qualifying retailers pursuant to a local ordinance.  (f.5) To the extent information is available and without changing the sales tax return form, the department of revenue shall include a report to its committee of reference at a hearing held in January 2022 pursuant to section 2-7-203 (2)(a) of the “State Measurement for Accountable, Responsive, and Transparent (SMART) Government Act” specifying:   The sales tax revenue the state did not collect as a result of the deduction allowed in this subsection (1.3); and    How many retailers elected to take advantage of the deduction allowed in this subsection (1.3).       This subsection (1.3) is repealed, effective December 31, 2026. (1.5)   With respect to sales of tangible personal property, commodities, or services made by marketplace sellers in or through a marketplace facilitator's marketplace, a marketplace facilitator has all of the liabilities, obligations, and rights of a retailer or vendor under subsection (1) of this section and this article 26 whether or not the marketplace seller, because the marketplace seller is a multichannel seller:   Has or is required to have a license under section 39-26-103; or    Would have been required to collect and remit tax under this article 26 had the sale not been made in or through the marketplace.       The liabilities, obligations, and rights set forth in subsection (1.5)(a) of this section are in addition to any requirements the marketplace facilitator has under subsection (1) of this section if it also offers for sale tangible personal property, commodities, or services through other means.    Except as provided in subsection (3)(b) of this section, a marketplace seller, with respect to sales of tangible personal property, commodities, or services made in or through a marketplace facilitator's marketplace, does not have the liabilities, obligations, or rights of a retailer or vendor under subsection (1) of this section and this article 26 if the marketplace seller can show that such sale was facilitated by a marketplace facilitator:   With whom the marketplace seller has a contract that explicitly provides that the marketplace facilitator will collect and remit sales tax on all sales subject to tax under this article 26; or    From whom the marketplace seller requested and received in good faith a certification that the marketplace facilitator is registered to collect sales tax and will collect sales tax on all sales subject to tax under this article 26 made in or through the marketplace facilitator's marketplace.                   The executive director of the department of revenue may extend the time for making a return and paying the taxes due under such reasonable rules as the executive director may prescribe, but no such extension shall be for a greater period than is provided for in section 39-26-109.      Except as provided in subsection (3)(b) of this section, the burden of proving that any retailer is exempt from collecting the tax on any goods sold and paying the same to the executive director of the department of revenue, or from making such returns, shall be on the retailer under such reasonable requirements of proof as the executive director may prescribe.      If a marketplace facilitator demonstrates to the satisfaction of the executive director of the department of revenue that the marketplace facilitator made a reasonable effort to obtain accurate information regarding the obligation to collect tax from the marketplace seller and that the failure to collect tax on any tangible personal property, commodities, or services sold was due to incorrect information provided to the marketplace facilitator by the marketplace seller, then the marketplace facilitator, but not the marketplace seller, is relieved of liability under this section for the amount of the tax the marketplace facilitator failed to collect, plus applicable penalties and interest. (b) (I) If a marketplace facilitator demonstrates to the satisfaction of the executive director of the department of revenue that the marketplace facilitator made a reasonable effort to obtain accurate information regarding the obligation to collect tax from the marketplace seller and that the failure to collect tax on any tangible personal property, commodities, or services sold was due to incorrect information provided to the marketplace facilitator by the marketplace seller, then the marketplace facilitator, but not the marketplace seller, is relieved of liability under this section for the amount of the tax the marketplace facilitator failed to collect, plus applicable penalties and interest.    If a marketplace facilitator is relieved of liability under subsection (3)(b)(I) of this section, the marketplace seller is liable under this section for the amount of tax the marketplace facilitator failed to collect, plus applicable penalties and interest.    This subsection (3)(b) does not apply to any sale by a marketplace facilitator that is not facilitated on behalf of a marketplace seller or that is facilitated on behalf of a marketplace seller who is an affiliate of the marketplace facilitator.    On and after January 1, 2001, there is imposed upon all sales of commodities and services specified in section 39-26-104 a tax at the rate of two and ninety one-hundredths percent of the amount of the sale to be computed in accordance with schedules or systems approved by the executive director of the department of revenue. Said schedules or systems shall be designed so that no such tax is charged on any sale of seventeen cents or less.          Every retailer conducting a business in which the transaction between the retailer and the consumer consists of the supplying of tangible personal property and services in connection with the maintenance or servicing of the same shall be required to pay the taxes levied under this article upon the full contract price, unless application is made to the executive director of the department of revenue for permission to use a percentage basis of reporting the tangible personal property sold and the services supplied under such contract. The executive director is authorized to determine the percentage based upon the ratio of the tangible personal property included in the consideration as it bears to the total of the consideration paid under said combination contract or sale that is subject to the sales tax levied under the provisions of this part 1. This section shall not be construed to include items upon which the sales tax is imposed on the full purchase price as designated in section 39-26-102 (12).      A qualified purchaser may provide a direct payment permit number to a retailer that is liable and responsible for collecting and remitting the tax imposed by this article on any sale made to the qualified purchaser. A qualified purchaser holding a direct payment permit number shall, before the twentieth day of each month subsequent to the month in which any sale to the qualified purchaser was made for which the qualified purchaser's direct payment permit number was used, make a return and remit directly to the executive director of the department of revenue the amount of such tax owing on all such sales to the qualified purchaser made in the preceding month. Such returns of the qualified purchaser or duly authorized agent shall contain such information and be made in such manner and upon such forms as the executive director shall prescribe.    Notwithstanding the provisions of section 39-21-113 (4), the department of revenue shall make available to all qualified purchasers an electronic list of all remote sellers and their Colorado account numbers in order to facilitate the qualified purchaser's appropriate remittance of tax pursuant to paragraph (a) of this subsection (5). Such list must remain confidential in the hands of the qualified purchaser, and the qualified purchaser is subject to the same limitations specified in section 39-21-113 (4) that apply to the department of revenue, including the requirement that such list be used only for the purpose of proper administration of the tax.    From the amount of the tax required to be remitted pursuant to subsection (5)(a) of this section, a qualified purchaser shall be entitled to retain the amount specified in subsection (1)(c)(II) or (1)(d) of this section that a retailer would otherwise be entitled to retain to cover the retailer's expense in collecting and remitting the tax imposed by this article 26 if the qualified purchaser had not provided a direct payment permit number to the retailer.        History. Source: L. 35: P. 1006, § 5. CSA: C. 144, § 5. L. 37: P. 1082, § 1. L. 45: P. 578, § 2. CRS 53: § 138-6-5. C.R.S. 1963: § 138-5-5. L. 64: P. 817, § 3. L. 65: P. 1122, § 1. L. 67: P. 523, § 1. L. 70: P. 395, § 1. L. 76: (1)(a) amended, p. 785, § 1, effective April 6. L. 89: (1)(a) amended, p. 1502, § 8, effective July 1, 1990. L. 99: (1) amended and (3) added, p. 12, § 3, effective January 1, 2000. L. 2000: (1)(a) amended and (1)(e) added, p.1431, § 2, effective May 31. L. 2001: (1)(a) amended, p. 1280, § 56, effective June 5. L. 2003: (1)(a) and (1)(e) amended, p. 2635, § 1, effective June 5. L. 2009: (1)(f) added,(SB 09-212), ch. 3, p. 6, § 1, effective February 26; (1)(f)(I) amended,(SB 09-275), ch. 273, p. 1234, § 1, effective May 18. L. 2010: (1)(a) amended and (1)(e) repealed,(SB 10-212), ch. 412, pp. 2035, 2032, §§ 10, 1, effective July 1. L. 2011: (1)(g) added,(SB 11-223), ch. 154, p. 534, § 1, effective May 5. L. 2013: (1)(g)(I) amended,(HB 13-1295), ch. 314, p. 1651, § 6, effective May 28; entire section R&RE,(HB 13-1295), ch. 314, p. 1649, § 5, effective July 1, 2014. L. 2019: (1)(a)(I)(A), (1)(b), (1)(c)(I), (1)(c)(II), and (3) amended, (1)(a)(II) repealed, and (1.5) added,(HB 19-1240), ch. 264, p. 2498, § 4, effective October 1; (1)(c)(I), (1)(c)(II), (1)(c)(III), and (5)(c) amended and (1)(d) added,(HB 19-1245), ch. 199, p. 2158, § 6, effective October 1. L. 2020, 1st Ex. Sess.: (1)(a)(I)(A) amended and (1.3) added, (HB 20B-1004), ch. 3, p. 22, § 2, effective December 7. L. 2021: (1.3)(a)(I.3), (1.3)(a)(I.5), (1.3)(a)(I.7), (1.3)(c.5), and (1.3)(f.5) added and (1.3)(a)(III), (1.3)(a)(V), (1.3)(b)(I), and IP(1.3)(b)(II) amended,(HB 21-1265), ch. 231, p. 1224, § 1, effective June 14; (1)(d)(IV) added,(HB 21-1312), ch. 299, p. 1796, § 10, effective July 1. History. Source: L. 35: P. 1006, § 5. CSA: C. 144, § 5. L. 37: P. 1082, § 1. L. 45: P. 578, § 2. CRS 53: § 138-6-5. C.R.S. 1963: § 138-5-5. L. 64: P. 817, § 3. L. 65: P. 1122, § 1. L. 67: P. 523, § 1. L. 70: P. 395, § 1. L. 76: (1)(a) amended, p. 785, § 1, effective April 6. L. 89: (1)(a) amended, p. 1502, § 8, effective July 1, 1990. L. 99: (1) amended and (3) added, p. 12, § 3, effective January 1, 2000. L. 2000: (1)(a) amended and (1)(e) added, p.1431, § 2, effective May 31. L. 2001: (1)(a) amended, p. 1280, § 56, effective June 5. L. 2003: (1)(a) and (1)(e) amended, p. 2635, § 1, effective June 5. L. 2009: (1)(f) added,(SB 09-212), ch. 3, p. 6, § 1, effective February 26; (1)(f)(I) amended,(SB 09-275), ch. 273, p. 1234, § 1, effective May 18. L. 2010: (1)(a) amended and (1)(e) repealed,(SB 10-212), ch. 412, pp. 2035, 2032, §§ 10, 1, effective July 1. L. 2011: (1)(g) added,(SB 11-223), ch. 154, p. 534, § 1, effective May 5. L. 2013: (1)(g)(I) amended,(HB 13-1295), ch. 314, p. 1651, § 6, effective May 28; entire section R&RE,(HB 13-1295), ch. 314, p. 1649, § 5, effective July 1, 2014. L. 2019: (1)(a)(I)(A), (1)(b), (1)(c)(I), (1)(c)(II), and (3) amended, (1)(a)(II) repealed, and (1.5) added,(HB 19-1240), ch. 264, p. 2498, § 4, effective October 1; (1)(c)(I), (1)(c)(II), (1)(c)(III), and (5)(c) amended and (1)(d) added,(HB 19-1245), ch. 199, p. 2158, § 6, effective October 1. L. 2020, 1st Ex. Sess.: (1)(a)(I)(A) amended and (1.3) added, (HB 20B-1004), ch. 3, p. 22, § 2, effective December 7. L. 2021: (1.3)(a)(I.3), (1.3)(a)(I.5), (1.3)(a)(I.7), (1.3)(c.5), and (1.3)(f.5) added and (1.3)(a)(III), (1.3)(a)(V), (1.3)(b)(I), and IP(1.3)(b)(II) amended,(HB 21-1265), ch. 231, p. 1224, § 1, effective June 14; (1)(d)(IV) added,(HB 21-1312), ch. 299, p. 1796, § 10, effective July 1.    Editor's note:   Subsection (1)(g)(I) was amended in House Bill 13-1295. Those amendments are superseded by the repeal and reenactment of this section in the same House Bill 13-1295, effective July 1, 2014.   Cross references:    For the legislative declaration in the 2013 act amending this section, see section 1 of chapter 314, Session Laws of Colorado 2013.    For the short title (“Affordable Housing Act of 2019”) and the legislative declaration in HB 19-1245, see sections 1 and 2 of chapter 199, Session Laws of Colorado 2019.    For the legislative declaration in HB 20B-1004, see section 1 of chapter 3, Session Laws of Colorado 2020, First Extraordinary Session.    For the legislative declaration in HB 21-1312, see section 1 of chapter 299, Session Laws of Colorado 2021.     ANNOTATION   Unconstitutionality of Colorado's tax system prior to 1978 amendments. Matthews v. State Dept. of Rev., 193 Colo. 44 , 562 P.2d 415 (1977).   Licensed retailers or vendors, state makes them its agents for collection. J. A. Tobin Constr. Co. v. Weed, 158 Colo. 430 , 407 P.2d 350 (1965); Dept. of Rev. v. Durango & Silverton Narrow Gauge R.R. Co., 989 P.2d 208 (Colo. App. 1999).   Payment to agents amounts to payment to state. Payment of the sales tax by the purchaser to licensed retailers or vendors amounts to payment to the state. J. A. Tobin Constr. Co. v. Weed, 158 Colo. 430 , 407 P.2d 350 (1965).   Applied in Montgomery Ward & Co. v. State Dept. of Rev., 628 P.2d 85 (Colo. 1981).