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Colorado Governor Orders Tax Relief for Restaurants, Small Businesses

Posted on Dec. 1, 2020

Colorado Gov. Jared Polis (D) has issued an executive order that will provide temporary tax relief for some restaurants and small businesses affected by the COVID-19 pandemic.

The November 25 executive order will provide a 30-day extension for remitting state sales taxes collected by restaurants, bars, and food trucks for November, up to a $2,000 limit.

“Colorado’s restaurants, bars, and food trucks are among the small businesses that have been hit the hardest by the pandemic. We all want to keep these businesses open as a vital part of our lives and culture, which is why I’m proud to be working with a group of bipartisan legislators to provide much needed tax relief,” Polis said in a release.

The executive order comes ahead of a special session, “when the General Assembly will take up legislation to allow bars and restaurants to retain up to $2,000 per month in sales tax for the months of November through February to help keep their doors open during the challenging winter months,” according to the release.

Colorado imposes a state sales tax of 2.9 percent. Polis's order will allow restaurants, bars, and food trucks to deduct from state net taxable sales the “lesser of net taxable sales or $70,000 and retain the resulting sales taxes collected” for sales in November. Retailers that collect taxes above this amount will need to pay the remaining November state sales tax and “state-administered local taxes” on or before December 20.

Retailers are limited in the sales tax deferral to five permanent locations or mobile “food service vehicles and carts.” Also, the executive order does not allow retailers to defer “city, county, or special district sales taxes collected by the Department of Revenue.”

The deduction can only be retained by a retailer “until the earlier of the sales tax return due April 20, 2021, or the retailer’s final sales tax return,” according to the order.

Polis did not respond to a request for comment by press time. 

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