Colorado Now Assessing Sales Tax of 1.4% on Prepaid Wireless Telecommunication Services

27 Jan Colorado Now Assessing Sales Tax of 1.4% on Prepaid Wireless Telecommunication Services

Hmmm….. Leave it to Colorado to slide this tax in ……. It is common knowledge that for the most part people purchasing prepaid wireless services tend to be socioeconomically challenged to begin with, so lets keep taxing them, keep kicking the weakest taxpayers and pretend like you are doing ‘your best’ to balance the state budget.  Funny how our esteemed legislators call it a surcharge and not what it really is, a sales tax.

Effective January 1, 2011, all retail merchants in Colorado selling prepaid wireless telecommunication services (through the sale of a prepaid wireless phone or prepaid wireless phone card) must collect a fee of 1.4% per sales transaction. Retailers will send the fee to the Colorado Department of Revenue at the time their sales tax is due. This new law also requires retail merchants to notify customers of this new fee. Please note that this fee should not be included in any sales tax calculations. In addition, when the surcharge is filed and paid on time, retail merchants may keep a 2% “vendor fee” from the surcharge to cover collection efforts for this new law.

Retail merchants must remit all fees collected to the Colorado Department of Revenue on or before the date they are required to file their Colorado sales tax, following the date of the prepaid wireless transactions. The first returns will be due Monday, February 21 (monthly sales tax filers). The Prepaid Wireless E911 Return (DR 0526) is now available on Colorado Department of Revenue Web site under Sales Tax Forms at http://www.colorado.gov/cs/Satellite/Revenue/REVX/1214992372238