Colorado’s legislature is debating whether to delay the effective date of its so-called remote-seller law. The law was enacted to allow Colorado to require on-line retailers to collect sales tax on retail sales for items delivered within the state of Colorado as permitted by the Marketplace Fairness Act of 2013 (“MFA”). This remote-seller law was passed in May, 2013 and was to become effective July 1, 2014.
There is just one problem; Congress has not passed the MFA or any equivalent law. Without Congress passing the MFA, Colorado’s remote seller law cannot take effect in July because the law relies on the MFA to authorize Colorado to require the collection of sales tax by on-line retailers.
Colorado’s legislature is now working on additional legislation—HB 1348—that would amend the effective date of the remote-seller law. Under the new legislation, the remote-seller law would go into effect only when Congress enacts an act that authorizes states to require certain retailers to pay collect or remit sales tax. If HB 1348 passes, Colorado would join many other states who have amended their statutes to impose tax collection obligations on remote-sellers only after Congress acts on this issue. Currently, HB 1348 is in Colorado’s House Finance Committee.