Limited Special Deduction Available for July, August, and September 2022
House Bill 22-1406 allows qualifying retailers to claim a limited special deduction from state taxable sales under certain conditions and to retain and spend the resulting state sales tax. The deduction is available for sales made in July 2022, August 2022, and September 2022. This means the returns you will file in August 2022, September 2022, and October 2022.
Eligible retailers are still required to collect all applicable state and state-administered local sales taxes, file returns on time, and pay all local sales taxes (in addition to state sales taxes in excess of the amount related to the special deduction). The special deduction does not apply to any taxes imposed by any state-administered city, county, or special district.
Who Qualifies?
Select your industry/business type for more detailed instructions about how to file and the rules that apply to you.
The special deduction does not apply to any taxes imposed by any state-administered city, county, or special district. Retailers should contact self-collecting home-rule cities regarding any similar programs they may offer. Eligible retailers are required to collect all applicable state and state-administered local sales taxes, file returns on time, and pay all local sales taxes (in addition to state sales taxes in excess of the amount related to the special deduction).
How to File for the Special Deduction
Filing Tips
The qualifying retailer special deduction was offered previously by Executive Order D 2020 261, House Bill 20B-1004, and House Bill 21-1265. While administering those special deductions, there were a few common filing errors that delayed processing sales tax returns. The following filing tips help make claiming the deduction as easy as possible and will help you avoid those common errors.
- Simply file like you normally would and take the special deduction in the state column.
- This deduction is not available at the local level, only at the state level. When filing, be sure not to take the deduction in all columns of Schedule B, just the state column.
- Do not file zero returns to claim the deduction. You still have to report your sales for the purpose of local taxes.
- We are encouraging filing initially for the deduction, not amending later, and filing for a refund. Filing for a refund will result in a longer processing time.
What if You Already Filed a Sales Tax Return?
If your business qualifies for the special deduction allowed by HB22-1406, but you have already filed and paid your return for the filing period, you may apply to the Department for a refund. If you file using Revenue Online using the instructions below the Department will make every effort to expedite these requests. However, depending on the volumes of refund claims received, please allow up to three months from the time the request is submitted.
File Using Revenue Online (Fastest)
To ensure that your refund claim is prioritized take the following actions:
- File an amended sales tax return for the period.
- Complete a Claim for Refund Form (DR 0137). Note clearly in the "Refund Request Reason" that the refund is being requested because the business qualifies for the special deduction allowed by HB22-1406 but the return was filed and paid early.
- Attach your Claim for Refund to a secure web message using Revenue Online. Be sure to include the following information:
- Account Type: Sales Tax
- Message Type: Refund Question
- Subject: Special Deduction HB22-1406
File By Paper (Delays May Occur)
- File an amended sales tax return for the period.
- Complete and submit a Claim for Refund Form (DR 0137). Note clearly in the "Refund Request Reason" that the refund is being requested because the business qualifies for the special deduction allowed by HB22-1406 but the return was filed and paid early.
- Mail the claim form to: