DMA to Host Conference Call on Colorado Tax Bill
April 8, 2010 — DMA will host a conference call Monday, April 12, at 1:00 p.m. ET, and will help plan a response to the recently passed Colorado House Bill 1193. This law was effective as of March 1, 2010 and, according to the State of Colorado, companies must comply by May 1, 2010.
“This bill targets direct marketers and is meant to be so onerous that your businesses concedes to collect tax in Colorado,” said Neil O’Keefe, DMA’s vice president of multichannel segments. “If this bill stands in Colorado it will surely be picked up by other states in an effort to close their budget deficits on the backs of our businesses and by interfering with your customer relationships and the level of loyalty that you have worked years to develop.”
This bill requires businesses to:
· Notify Colorado customers that they are required to report the tax owed on their purchases;
· Send, by January 31 of the following year, a notice to all of their Colorado customers of the total amount of their purchases in the previous year (this notice must be sent via first-class mail and be labeled “Important Tax Document Enclosed”); and
· File an annual statement with the Colorado Department of Revenue summarizing the total amount of purchases made by each Colorado residents in the previous year.
There are fines associated with failure to comply with any of the provisions above:
· $5 for each failure to notify Colorado residents of their obligation to report tax owed;
· $10 for each failure to send Colorado customers a year end summary of their purchases; and
· $10 for each failure to include a Colorado purchaser on the report that must be submitted to the Department of Revenue
This law went into effect March 1, 2010. The Department of Revenue will initiate a rulemaking to implement this law, but it will take some time for that full process to be completed. In the meantime, on February 26, the Colorado Department of Revenue issued emergency regulations providing for a three-month waiver of “penalties and penalty interest for the sale, use, storage, or consumption of tangible personal property and services described in House Bills 10-1190, 1192, 1193, and 1194, which suspended the sales and use tax exemptions addressed in those bills.”
Please see this page for further information on the rules. http://www.colorado.gov/cs/Satellite/Revenue/REVX/1216022443599
The text of this new law can be found here: HB 1193
Join us Monday April 12, at 1:00 pm ET as DMA and its members plan to file suit against the state of Colorado. DMA will act as the plaintiff so that no one business has to feel the brunt of any recourse from the Colorado Revenue Department of Revenue. The estimated cost to fight this bill is $200,000. If just 40 companies contributed $5,000 we would be well on our way to a victory over this unnecessary legislation which is sure to hamper commerce at time when businesses are facing an economic downturn not seen since the Great Depression.
Be sure to dial in Monday April 12 at 1:00 pm EDT on 866-866-2244. Participant code: 2864809
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