Colorado HB 22-1406: Qualified Retailers Sales Tax Deduction

Qualified Colorado Retailers Eligible to Retain Sales Tax in 2022 Q3

The bill renews for July 2022, August 2022, and September 2022, after a 10-month hiatus, a temporary deduction from state net taxable sales for qualifying retailers in the alcoholic beverages drinking places industry, the catering industry, the food service contractors industry, the mobile food services industry, the restaurant and other eating places industry, and retailers operating a hotel-operated restaurant, bar, or catering service in the state. The temporary deduction from state taxable sales for qualifying retailers is equal to the lesser of state net taxable sales or $70,000 for each month in the specified sales tax period.

Read the Full Text of the Act Here

More info from the Colorado Dept. of Revenue

So what does this mean for my business?

If you are a Qualified Retailer (as described above), then you are eligible to claim a limited-time deduction against your Colorado state (not local) sales when filing your sales tax returns for the three-month period of July 2022 through September 2022.  This limited-time deduction would allow you to retain all or part of the state sales tax you previously collected and set aside.

How much could this save my business?

The Colorado state sales tax deduction is limited to the first $70,000 in sales for the month.  Since the current Colorado sales tax rate is 2.9%, this means you would be able to keep or retain the first $2,030 (2.9% of $70k) of state sales tax collected each month.

What do I need to do to apply for this deduction?

If you are a current client of Salt & Main Accounting Co. and if we are currently engaged to file and remit your Colorado sales tax on your behalf, then you needn’t worry, we’ll automatically be applying this to your return when we go to file.  Feel free to contact your account manager to inquire about your company’s individual eligibility.

Not a client of Salt & Main?. No problem!  We would still love to help.  Get in touch with us today at 970-880-1022 or