DENVER, Updated November 13, 2020 -- The Colorado Department of Revenue (CDOR) and the Governor’s Office of Information Technology (OIT) are rolling out Colorado’s first Sales and Use Tax System (SUTS) online portal today for businesses that make in excess of $100,000 in retail sales in a year.
The SUTS portal will allow Colorado businesses to file taxes for the 600 plus jurisdictions that make up the Colorado sales tax landscape, from one convenient online location at Colorado.gov/Revenue/SUTS. Additionally, the portal also includes a Geographical Information System (GIS) which is a tax rate lookup tool that allows individuals and businesses to find the tax rate of any jurisdiction simply by entering an address, free of charge. The system also touts an Application Program Interface (API) which will allow businesses to integrate the tax lookup tool with their existing software. Key features of the portal include:
- Single point of remittance and a uniform remittance form
- GIS tax rate lookup tool
- Taxability and exemption matrix
- Ability to calculate tax rates on items with differing tax rates in the same jurisdiction
- A record of the history of any changes
Taxation Senior Director Brendon Reese stated, “We’ve heard the concerns from the business community and relief is here. This online portal will eliminate manual processes and make registration, filing, and payment of sales and use taxes easier and more reliable.”
Colorado has a unique tax landscape with 272 municipalities, out of which 103 are home rule jurisdictions that can establish their own tax base, requiring businesses to file and remit tax directly to the municipality. Out of the 103 taxation jurisdictions, Colorado has 71 home-rule self-collecting tax jurisdictions.
A Sales and Use Tax Simplification Task Force was originally created in 2017 to find ways to streamline how sales and use tax was collected and remitted in Colorado. On June 21, 2018, the Supreme Court of the United States ruled in favor of the state in South Dakota v. Wayfair, Inc. The decision overruled a longstanding physical presence rule, allowing states to require out-of-state sellers, also known as remote sellers, to collect and remit sales tax on purchases. This decision amplified the need for increased simplicity in the way sales and use tax was collected in Colorado.
In 2019, the task force advocated for legislation and the General Assembly passed SB19-006 which required that CDOR and OIT collaborate to deliver a SUTS system that could be a single web portal where businesses could both lookup sales and use tax information and file and remit to all Colorado jurisdictions at once.
The SUTS System has two components:
- Filing, Remitting and Payment Portal - This one-stop online portal will allow businesses to visit one site to file and pay their sales taxes for state and state-collecting jurisdictions, while also filing and paying sales tax for participating home-rule jurisdictions at the same time.
- Geographic Information System (GIS) Software - One of the primary elements to simplification revolves around businesses being able to easily identify the correct taxing jurisdictions related to the sale of a taxable good or service with the aid of a free technology solution.
The GIS allows businesses to look up the specific sales tax rate for an individual address.
The GIS will not only show state sales tax information, but it will also include sales tax information for counties, municipalities (both state-collecting and self-collecting), and special taxation districts. This system will allow businesses to accurately calculate and collect sales tax for their customers in real-time, promoting voluntary compliance by vastly simplifying the process.
“SUTS was developed with our stakeholders every step of the way, from designing the functionality, through procurement, development and will continue through ongoing improvements,” said Scott McKimmy, CDOR’s Business Innovation Director. “This is a first-of-its-kind technology solution for the state of Colorado created in collaboration between state government, local jurisdictions, vendors and the business community.”
More than half of the 71 home rule jurisdictions are on the SUTS System and many more have started the process of executing the agreement, along with the 50 counties and all state-administered (statutory) cities. A complete list can be found at Tax.Colorado.gov/SUTS-Jurisdictions.
“It’s critical that we provide a solution that local jurisdictions can integrate into,” said Lu Córdova, the Governor's Advisor on Efficiencies & Digital Transformation. “This is a joint effort to simplify sales tax in the state of Colorado and nurture small businesses, participation at every level is essential to our success.”
Visit Tax.Colorado.gov/SUTS-info for more information regarding how to sign up to use the Sales and Use Tax System (SUTS).