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October Tax Policy Updates

Information about the recent activities of the Office of Tax Policy is provided below. This information includes new and revised publications, rulemaking activities, and recently published letter rulings and information letters.

Recently Published Private Letter Rulings (PLR) and General Information Letters (GIL)

  • GIL 25-005 – Taxability of Public Improvement Fees –  Because a public improvement fee (“PIF”) is not a direct federal tax; a state, local, or special district sales tax; or a retail delivery fee, it is included in the price the consumer pays to make a purchase. As a result, a PIF is included in the purchase price and is subject to sales tax.

New and Revised Publications

  • Income Tax Topics: SALT Parity Act – This publication has been revised to reflect changes made by federal legislation, which made the federal limit on the SALT deduction permanent. As a result, pass-through entities will be allowed to make an election under the SALT Parity Act for future tax years.
  • Tax Topics: Penalties and Interest – This publication has been updated to reflect the interest rate for 2026 and to include information about late filing and payment penalty applicable to the new firearms and ammunition excise tax.
  • Sales & Use Tax Topics: Telecommunications – This publication has been revised to reflect the imposition of sales tax on interstate telephone and telegraph services, effective July 1, 2025, as the result of House Bill 25-1296.
  • Supplemental Instructions for Form DR 0100 – This spreadsheet provides information to assist retailers in the preparation of their Colorado Retail Sales Tax Returns (DR 0100) and the supporting Schedules A and B, upon which exemptions and deductions are reported. It replaces the prior PDF version of this guidance.
  • Sales Tax Guide – This publication has been revised to reflect various changes, including:
    • imposition of sales tax on interstate telephone and telegraph services, effective July 1, 2025, as the result of House Bill 25-1296;
    • changes made by House Bill 24-1041 to the threshold for filing quarterly; and
    • the elimination of the service fee, effective January 1, 2026, by House Bill 25B-1005.
  • Oil & Gas Production Fee Guidance – This new guidance provides information regarding the oil and gas production fee which began July 1, 2025, pursuant to Senate Bill 24-230.
  • Conservation Easement Credit Limits – This new guidance was issued in response to requests from stakeholders, to clarify certain limits imposed upon the issuance and use of conservation easement tax credit certificates.

Rulemaking Activities

  • Mandatory Electronic Filing and Payment – We recently announced a workgroup meeting, scheduled November 13th, to discuss draft rules that would mandate electronic filing and payment for various taxes. These draft rules would phase in mandatory electronic filing and payment requirements for specified taxes over a multi-year period.
  • Income Tax Withholding Rules – We recently held a rulemaking hearing for several proposed rules regarding income tax withholding on wages, gambling winnings, nonresident real estate transactions, and other payments. We also proposed a rule regarding the notice employers must provide their employees relating to certain federal and state income tax credits.