Title
Ordinance No.20-47 Amending And Creating New Sections Within Article 7 (Sales And Use Tax) Of Chapter 2 (Business Licensing, Liquor Regulation And Taxation) Of The Code Of The City Of Colorado Springs 2001, As Amended, Pertaining To Sales Tax Marketplace Facilitators And Economic Nexus
Presenter:
Charae McDaniel, Chief Financial Officer
Body
Summary:
The attached Ordinance amends and creates new sections within the Sales Tax Code to require retailers who do not have a physical presence in the City to collect and remit sales tax on online purchases.
A related Ordinance amends the Lodgers, Campgrounds and Automobile Rental Tax (LART) portion of code to provide necessary updates in the terminology used to ensure consistency with the updates in the Sales Tax section.
The Ordinance attached to this item, and the Ordinance attached to the related LART item, do not constitute a tax policy change - they reflect current policy for taxation, collection and remittance.
A separate and related agenda item contains a Resolution to approve the IGA with the State of Colorado Department of Revenue (CDOR) which grants the city access to the SUTS system for the collection and payment of sales and use tax for online purchases.
Background:
The United States Supreme Court ruled on the South Dakota v. Wayfair, Inc. 138 S.Ct. 2080 (2018) (hereinafter "Wayfair") case. South Dakota enacted a statute requiring internet sellers with no physical presence in the state to collect and remit sales tax. This was previously prohibited under Quill Corporation v. North Dakota, which required a retailer to have a physical presence in a taxing jurisdiction. The Supreme Court overturned the prior ruling and held that out-of-state sellers' physical presence in a taxing state is not necessary for the state to require sellers to collect and remit its sales tax. This provided for a new definition of economic nexus, which is the connection established when a person or marketp...
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