Keep It Simple
By Sam Mamet, CML executive director, and Geoff Wilson, CML general counsel
Keep it simple, stupid!
That approach is exactly what guides us in the League's ongoing efforts to simplify the sales tax collection system for a number of home rule cities and towns in the state.
CML’s Sales Tax Simplification Committee, which includes a representative
of each of the 69 home rule municipalities that locally collect their sales tax, has completed work on a package of standardized sales and use tax definitions.
The goal in developing these definitions
was to reflect current tax practices so that the definitions could be adopted without a TABOR election. Use of standardized definitions furthers the general goal of simplifying our sales tax system by decreasing the likelihood that a given term will be given different interpretations by various municipalities. The definitions were developed in response to a 2014 request from the General Assembly.
A subcommittee built upon the already considerable similarity between municipalities in their existing definitions to develop the updated definitions. By reflecting current
tax practices, the definitions are intended to provide greater clarity to businesses without causing a revenue loss or gain to the municipality, and without resulting in a
change in tax treatment of local businesses.
Prior to finalization, the package was reviewed by a group of municipal attorneys with a tax focus, and by a group of business tax experts and attorneys. The latter group included representatives of the Colorado Association of Commerce and Industry, Colorado Retail Council, Xcel, Century Link, Simplify Colorado Taxes, and private tax counsel. Following a series of meetings with these business community representatives, a number of changes were incorporated into the package.
While municipal and business experts alike continued to express concern about use of this or that definition in a particular context, the overall package and its object were widely supported by both groups.
The definitions package is available on
the CML website under Issues > Taxation > Sales Tax. CML encourages adoption of these updated definitions, to the extent that they apply, in municipalities that locally collect their sales tax, provided that the city attorney and tax staff ensure that a TABOR election will not be required. The League plans to periodically update the definitions package to reflect the latest understanding of terms.
CML wants to acknowledge the outstanding work of Rachel Allen, former CML staff attorney and now senior assistant city
attorney for Commerce City. This project involved numerous five- to six-hour meetings of the main drafting group, as well as meetings
of various simultaneously working subcommittees. Without her steady hand,
this project would not have come to fruition.
We acknowledge that life is not always simple, yet as municipal leaders we strive to make life a little simpler in the sales tax collection system.
I would love to hear from you on how you have streamlined procedures and policies to make life simpler for businesses - especially small businesses, which, after all, remain a backbone of Colorado's economy.