Tag Archive for Colorado

Summon Rules Applies To Taxpayer’s Marijuana Business

Ron Marini

Colorado- A district court has made several rulings regarding Code Sec. 280E, the Code section that disallows deductions in carrying on a trade or business that consists of trafficking in controlled substances.

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Fascinating Raminfications Of Colorado’s New Online Sales Tax

Monika Miles, multistate tax, colorado, online sales tax

As we’ve been following the online sales tax debate in previous posts, we’ve mostly approached the issue as it affects the country as a whole. While Congress has continued to debate how to handle taxing internet shoppers, however, states have been taking matters into their own hands. This upcoming series will look at new legislation coming out in different state legislatures across the country, beginning with Colorado.

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New Supreme Court Justice Gorsuch And His Tax Stance

Kat Jennings

President Donald Trump selected Judge Neil M. Gorsuch of the Tenth Circuit Court of Appeals to fill the vacancy in the Supreme Court. Judge Gorsuch draws much similarities to Judge Anthony Scalia, whom he is replacing, after his death in 2016. There are a lot of political decisions one might get into, but we are going to look at how some of the decisions Judge Gorsuch made on tax-related issues.

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Income 54: Shareholders of Partnerships and S Corporations

John Dundon

The Colorado Department of Revenue has finally revised its guidelines in FYI Income 54 regarding people who do not live in Colorado but are partners and/or shareholders of partnerships and/or S corporations in Colorado, ensuring that pass-through entities pay Colorado income tax on their Colorado-source income. This Enrolled Agent says “About Time!”

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Colorado Year End Tax Update: Focus on USE TAX – 50 Points

John Dundon

It is that time of year again where we work ourselves into a tizzy finishing off the year “strong” and simultaneously enduring another holiday season whilst purportedly planning for a new year. YIKES!

With internet sales exploding, it is a good idea to review each transaction you make to know if sales tax is being charged. If it is not, chances are good that you owe Colorado USE Tax on the item purchased.

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Colorado Income Tax Planning Update: Form 104

John Dundon

The following items might seem new and/or different for Colorado taxpayers on the CO 104 Income Tax form, some are some are not. These points below basically represent some of the more persistent questions coming across my desk as part of year end tax planning.

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Colorado Department Of Revenue Asks Supreme Court “Should Quill Be Overturned?”

Alan Smith

No! Overturning Quill Corporation v North Dakota, 504 U.S. 298 (1992) would mean retailers throughout the United States would have to collect, report and remit sales tax for all other states with a sales tax even if the retailer has no physical presence in the other states.

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An Interesting Look At Sales Tax And Legal Marijuana

Monika Miles

Although the presidential campaign seemed to dominate headlines earlier this month, there was another proposition that passed in California (as well as a handful of other states): recreational marijuana became legal. What does this mean for the Golden State’s sales tax revenue? And how will it affect other industries? I thought it would be worth taking a look at what other states have done and how California may proceed in the coming months.

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Odd Tax Holiday In Colorado

Several states have “sales tax holidays” where for a day or a few days specified during the year, there is no sales tax on specified items.  For example, it might be on children’s clothes or school supplies close to the time when school begins. Some states have them for guns and emergency preparedness items. The Federation of Tax Administrators maintains a list of these holidays in the states.

September 16, 2015, Colorado had a holiday on marijuana – but just the special 10% and 15% taxes (there are a lot of taxes on marijuana in Colorado). The reason is complicated and ties to the fact that when recreational sales became legal in Colorado and new taxes added, they raised more than allowed. HB15-1367 explains some of this (in 33 pages!). Read more

Colorado Shocked With Pot Tax Revenue

One of the main goals accomplished by legalizing marijuana in Colorado was the perceived increased revenue stream from state tax. Lawmakers strongly believed Colorado would benefit financially from the legalization of marijuana in its state. To their shock and dismay, the legalization has not been as profitable as lawmakers had hoped.

By way of brief background, Colorado enacted a pot tax in 2013. Specifically, on November 5, 2013, Colorado voters passed the pot tax. The tax operated similar to other sin taxes in that it came at a hefty rate. Recreational marijuana sales were subjected to a 25% tax which went into effect on January 1, 2014. Of the 25%, 15% will be tagged for public school construction projects and 10% was earmarked to funding enforcement regulation on the retail pot sales. This excise tax, which is similar to tobacco and cigarette taxes, is in Read more

Sales Tax Complexity Example – Colorado

Many local governments have sales tax in addition to the state’s sales tax. Tax rates likely vary among local entities. Thus, it is necessary to define that local jurisdiction. We might assume that should be easy because it would be based on the name of the city or the zip code – something easily known. But, that is not true, there are many areas where zip codes do not tie to the local sales tax rate.

Thanks to Karen Davis of T.M. Byxbee Company, P.C. in Connecticut for pointing out to me an example of the complexity that can exist in trying to determine the proper sales tax rate to charge. The Colorado Department of Revenue has a web tool where you can determine the local sales tax. For some of the jurisdictions though, you’ll also need a map to determine the rate. For example, here is the description provided for the city of Aurora Read more

Marijuana And The Tax Law

It’s unlikely anyone missed the news stories about marijuana sales becoming legal on January 1, 2014 in Colorado. The Huffington Post reported on January 8, 2014 that sales in the first week were about $5 million. That also generated a lot of tax revenue for the state because Proposition AA* that Colorado voters passed in November 2013 allows for a 15% excise tax when unprocessed retail marijuana is sold by a cultivation facility to a retailer AND a 10% sales tax (on top of the normal Colorado sales tax of 2.9%) when the retailer sells the marijuana. That proposition suggested that $70 million would be generated annually with the first $40 million to be used for public school capital construction. Additional revenues would be used to enforce regulations on the retail marijuana industry and the balance for other needs (apparently at the discretion of the Read more