23 Dec Sales Tax On Professional Services Rendered in Colorado
The Second Regular Session of Colorado’s 73rd General Assembly starts January 5th, 2023, and when it convenes, sales tax on professional services rendered in Colorado can happen.
The Assembly is made up of a new super majority all wearing the same color shirt, which means that – provided they stay organized and disciplined – they can get all sorts of legislation championed.
It is easy to speculate that the traditional precepts of ‘party moderation’ after the midterms may very well be out the window in 2022/2023 for Colorado. Governor Polis is quietly organizing an ‘exploratory committee’ to ‘help’ him decide whether to run for PRESIDENT in 2024.
The upcoming 2023 legislative session seems ever more challenging with our new congress searching for ways to offset the forecast loss in oil/gas tax revenue through other ‘revenue generating’ legislation with little moderation anticipated. One hint of what to expect…
What services are being considered for this prospective new tax?
Tangible Personal Property Services (TPP)
TPP services involve specialized knowledge, expertise, or ability.
Examples of TPP services include:
- car repair
- equipment repair and installation.
Real Property Services are directly performed on land, buildings, or other structures
- air-conditioning & heating
Personal and Professional Services
Common examples of personal services include:
- lawn mowing
- tanning salons
- hair salons
- nail salons
- pet grooming
- diaper service
- health clubs
- amusement park admission.
Common examples of professional services include:
- private investigation
Why are we speculating that a sales tax on services is imminent?
- The General Assembly adopted SB21-260 Sustainability Of The Transportation System, causing the imposition of a new $0.27 Retail Delivery Fee
- A seemingly innocuous irritation to Colorado taxpayers.
- An overtly challenging law for BOTH industries to comply with AND authorities to enforce.
Industry representatives assert that it can cost up to $1 in administrative burden PER TRANSACTION to collect/remit this new $0.27 fee.
What can you do? Be part of the law-making process!
- Join us to meet state tax policymakers and legislative leaders from across Colorado.
- Participate in the Colorado Society of Enrolled Agent’s 3rd Annual Legislative Day
- February 9, 2023, starting at 8:00 am at the Colorado State Capitol in the ROTUNDA