Sales Tax Collection Discounts In Colorado
Colorado allows merchants to keep a small percentage of the sales tax they collect as a collection discount, which serves as compensation for the work required to comply with the Colorado sales tax regulations
The collection discount is 3.33%, although the local option sales tax discount does varies between this amount and nothing. In the time between July first, 2009 and June thirtieth, the vendor’s fee was temporarily eliminated.
Home Rule Cities In Colorado
In addition to state sales tax, Colorado also imposes city sales tax. You can remit some of the city tax directly to the state, however, some cities, called Home Rule cities, administer their own sales tax collections. If you have nexus in a Home Rule city, you will need to apply for a sales tax permit directly from the city.; You will also be required to remit taxes directly to the city.
For more information about Home Rule cities, see the;Colorado Sales Tax Guide.
If instead, you are looking for a team of experts to handle your sales tax returns for you each month, you should check out our Done-for-You Sales Tax Service. Feel free to contact us if youre interested in becoming a client!
What Is A Local Income Tax
A local income tax is a special tax on earned income collected by local governments like counties, cities, and school districts. Fourteen states including Colorado allow local governments to collect an income tax.
While the federal income tax and the Colorado income tax are progressive income taxes with multiple tax brackets, all local income taxes are flat-rate taxes which are the same for every taxpayer regardless of income.
Another major difference between local income taxes and federal or state taxes is that most local taxes are collected only on earned income, and not on capital gains or other non-earned income like interest and dividends.
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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
Your Colorado Sales Tax Filing Frequency & Due Dates
Your business’s sales tax return must be filed by the 20th of the month following reporting period.For a list of this year’s actual due dates, see our calendar of Colorado sales tax filing due dates.
It must be noted that if taxpayer’s accounting period ends on a day other then the last day in the month, then return is due on twentieth day that follows the very last day of the accounting period.
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Wheres My Refund Colorado
To check the status of your Colorado state refund online, go to ;. There is no need to login.;Simply choose the option;Check the Status of Your Refund;under Welcome to Revenue Online.
If you do not know the refund amount you claimed, you may either use a Letter ID number from a recent income tax correspondence or request a letter using the, Request a Letter ID link on the home page.
You may also contact the Colorado Tax Information Line at .
Generally, your e-filed return will take less time to process than a paper-filed return.
Proving Your Move Was Temporary
The IRS considers your move to be temporary if you are in the new state for work, and you expect your job in that area to last less than a year.
Caution: Although many states follow the IRS rules about how to decide if your move is permanent or temporary, some states presume that you’ve made a permanent move if you live there for six months or more.
The truth is that it’s often easier to become a permanent resident in your new state than it is to stop being a permanent resident in your old state. In most states, even though you are presumed to be a resident after you’ve lived there six months, you may have to be gone from your old state for 18 months before you are considered by the time test to be a nonresident.
So, it is often more important to show your intent to leave a state than it is to show your intent to become a resident in a new one. If you end up with both states wanting to claim taxes on your income, your evidence of intent will be crucial.
If you intend for your move to be temporary, avoid doing the things we just listed for proving permanent resident status, and do the following instead:
Most important, be sure to move back to your old state when your temporary period of residence is over.
Remember, with TurboTax, we’ll ask you simple questions about your life and help you fill out all the right tax forms. Whether you have a simple or complex tax situation, we’ve got you covered. Feel confident doing your own taxes.
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City Sales Tax Information
Taxable Items and Services
The City of Golden sales tax must be collected on all sales, leases and rentals of items in the City, including items delivered into the City. Transactions which are taxable in Golden but may be taxed differently by the State of Colorado and other Colorado jurisdictions include such things as:
- Telecommunications services
- Installation of equipment required to receive or transmit telecommunications service
- Gas and electric for residential and most commercial consumption
- All food sales
- Cover charges considered a part of the amount paid for food and drink
- Hotel/Motel lodging services
- Items dispensed from coin-operated devices
- Fabrication labor
Following are a few of the exemptions as stated in the City Code:
- Professional services, such as accounting and legal
- Sales of prescriptions and medical supplies as defined by the Code
- Cigarettes
- Labor, excluding fabrication labor, is not taxable if separately stated on invoices.
All exempt sales must be properly documented.
Golden tax should not be collected if an item sold is delivered outside the City limits. You should contact the City where the item is delivered to determine if you need to collect that Citys tax. Be careful not to rely on mailing addresses to decide which tax to collect; mailing addresses do not always correspond to the City boundaries. Whenever merchandise is delivered out of the City, it must be clearly stated on the invoice.
Refunds
Purchase of a Business
Audits
Colorado Taxation For S Corporation
In comparison to partnerships and sole proprietorships, Colorado S corporations are typically audited less frequently. Although the corporation itself does not pay any taxes, an informational tax return must be filed. In terms of the corporation’s income and losses, these values are reported on each shareholder’s personal tax return. In turn, all losses help offset other forms of income.;
All losses and income are allocated based on each owner’s percentage of the corporation. Under certain circumstances, Colorado offers an alternative to income tax. This is known as a gross receipts tax, and in order to qualify:
- Your only activity in the state of Colorado must be making sales.;
- Of those sales, the total must equal $100,000 or less in total.
- You may not own or rent any real estate in Colorado.;
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Colorado Trusts: What You Need To Know
Setting up a trust is a good way to protect your assets or provide for your heirs. For the average person, there are a lot of questions associated with establishing a trust. It can be a complex task and its important to understand the ramifications.
At Brestel Bucar, we understand that you might not be sure how setting up a trust will impact your taxes. In fact, one of the most common questions we hear from our clients is this:
How are trusts taxed in Colorado and is there anything I can do to reduce the tax burden for my heirs?
Thats an extremely important question. The truth is that the tax issues surrounding estate planning can be confusing and overwhelming. We have the experience necessary to help you. Heres what you need to know about trusts and taxes in Colorado.
Do I Need A City Of Boulder Business License
The City of Boulder Revised Code requires that all types of businesses with nexus in Boulder be licensed and approved by the City before operating. If a business has more than one location in the city, each location needs a separate license. Please keep in mind that a City of Boulder Business License comes with a tax filing requirement.
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To Obtain Forms By Telephone
Federal: 800-829-3676 to reach the Internal Revenue Service Forms Distribution Center for automated telephone ordering service.State: 303 238-7378;Taxpayer Helpline;for automated telephone ordering service. Press “0” for a customer service representative. This service has all state tax forms. Call early in day for shortest wait time.
- 1-800-829-1040 – IRS Tax Help Line for Individuals and Joint Filers
- 1-833-553-9895 -;IRS Tax Help Line for Individuals and Joint Filers
- 1-800-829-4059 – IRS Tax Help Line TDD
- 1-800-TAX-FORM – IRS Forms and Publications Ordering
- 1-866-464-2050 – IRS Refund Hotline
- 1-800-829-4933 – IRS Tax Help Line for Business Filers
Rental Property Income And Expenses
Rental property expenses include all payments toward the managing and maintenance of the real property. This includes: property upkeep and maintenance, gardening service, small repairs, and utilities . These are individually deducted at the end of the year as items on schedule E of the federal tax return. A separate schedule of income and expenses should kept for each rental property. Individuals that own property are on a cash-basis, unless their business utilizes the accrual method of accounting. Cash basis means that the deduction for expenses should occur in the year they are actually paid. The same rule applies to income. Income for each property should be recorded separately and only included on the tax return in the actual year received.
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Tax Laws For Rental Property In Colorado
Colorado laws pertaining to rental property are the same as the regulations in the federal tax code. In order to simply filing, Colorado initiated a plan used by several other states that requires the federal return to be attached to the state return as part of the filing. This resolves the confusion that had existed between differences in federal and state laws. Rental property income and expense deductions should be shown on schedule E of the federal tax return . Any proceeds from the gain or loss on investment property should be reported on schedule D of the federal return.
Points To Keep In Mind
Colorado residents must file a state tax return if they are required to file an income tax return with the IRS, even if they do not have a Colorado tax liability.
Additionally, income earned by an individual while they are not a resident of Colorado or Part-Year Resident will be taxed in Colorado only if it is considered Colorado source income.;
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How Do You Pay The Denver Income Tax
The Denver income tax is due on April 15th, when you file your federal and state tax returns. Because calculating your local income tax is relatively simple compared to your other tax returns, many tax preparers will file your Denver income tax return for free.
If you file your own taxes, the Denver tax collector will likely mail you a copy of the tax forms you need by April. Unfortunately, many leading e-file providers do not support local income taxes. Denver may have a proprietary e-filing system you can use alongside your state and federal e-filing provider.
How Do I File The Tax Due
After you have completed the application and a sales license has been issued, you can go on-line and file your return. You will require a PIN which can be provided by calling the Finance Office 303-795-3768. The city also has . The return must be completed and returned with the proper remittance on or before the 20th day of the month following the reporting period. For filing the return on time, you receive a 2.50% deduction called a “Vendors Fee” which is to compensate you for your cost of collecting and remitting the tax.
Sales and use tax returns may be filed online, allowing payments via credit card or electronic check. A City of Littleton sales and use tax account number is required, as well as a computer-generated PIN.
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What Happens If I Fail To File The Return On Time
Returns and payments received after the 20th will be considered late. The “Vendors Fee” is not allowed when returns and payments are filed late. If you do not file the city tax return with the proper penalty and interest within ten days from the due date, , a “Notice of Assessment” will be sent. The taxpayer then has ten days from the date of mailing to file the delinquent return with the proper penalty and interest, pay the amount of the assessment, or request in writing to the Revenue Manager, a revision or modification of the assessment. If the assessment is not satisfied within a ten-day period, a summons to Municipal Court may be issued.
What Is A General Use Tax
A “General Use Tax” is a 3.00% tax imposed on every person in the city for the privilege of storing, using or consuming, in the city, any articles of tangible personal property purchased at retail and not subjected to city sales tax without regard to whether the property is purchased from sources within or outside the city. The tax due should be shown on Line 10 on the front of the sales tax return. A detailed list of the equipment purchased does not need to be included on the return itself. However, a list should be maintained by your business.
Use tax will not be collected or paid on items already subjected to the retail sales tax.
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Who Must Obtain A Business And Sales/use Tax License
Any business engaged in commerce of any kind,;including all service businesses and all businesses selling products and taxable goods, either in a home-based or commercial location within the City of Littleton is required to register with the city by completing a Business License – Sales Use Tax Application. A separate license is required for each physical location where a retailer operates a retail business within the city.LICENSES ARE NOT TRANSFERABLE.Business establishments located outside the Littleton city limits that engage in retail sales of tangible personal property to Littleton businesses or residents, which are delivered to locations within the city, must also obtain a sales tax license. There is no charge for the Business and Sales/Use Tax License Application.
The Town Sales Tax Rate Is 4 Percent
The Town’s Revenue Division is responsible for licensing businesses that operate within Town and collecting the proper amount of sales tax.;
Remember to file the proper tax form using the 4 percent rate for the Town of Castle Rock.
If needed, access a blank Sales Tax Return .;
Sales tax returns need to be received by the Town, or postmarked, no later than the 20th of the month due. Monthly filers should submit the previous months sales. Quarterly filings are due April 20, July 20, Oct. 20, and Jan. 20. Annual filings are due Jan. 20.
Remember to pay your taxes on time to avoid interest and late fees.
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Make A Payment Using Revenue Online
Before submitting a payment by credit/debit card or e-check, be sure to visit the Tax Payment Options;web page to verify whether you can use this payment method for the tax type you wish to pay. To submit payment using a credit card, debit card or e-check, follow these steps:
