State Service Fee for Businesses Eliminated
Posted: May 26, 2009
This News and Announcement covers information for the state Service Fee only.
New information is now available regarding the Regional Transportation District (RTD), Scientific and Cultural District (CD), and Football District (FD) Special Districts. Please the News and Announcement dated October 6, 2009 for NEW information regarding the RTD/CD/FD Service Fee Change.
Effective for all Colorado sales and use tax returns filed on or after July 1, 2009, the Colorado sales tax Service Fee rate (also known as the Vendor's Fee) is reduced to zero. This is an elimination of the Service Fee for all state sales tax filers, NOT a reduction in the state sales tax rate, which is 2.9 percent.
Please note that this zero service fee applies only to state sales tax and state retailer's use tax. The service fee rates for state-collected cities, counties and special districts (Rural Transportation Authority, Mass Transit District, and Local Improvement Districts) are not changed. Service fee rates for state-collected local jurisdictions may be found in the Department of Revenue's Colorado Sales/Use Tax Rates (DR 1002) publication, available on our Sales Tax forms page.
Because Colorado will not honor the service fee for Kansas vendors who collect Colorado sales/use tax, Colorado retailers who collect sales or use tax for the State of Kansas will no longer be able to claim the service (or vendor) fee with the Kansas Department of Revenue.
Pre-printed forms sent to multi-location retailers who file monthly and quarterly will show the zero service fee rate in the state column. Seasonal filers and annual filers will receive forms that show the zero service fee rate in the state column. For single location businesses, the department will send new coupon books that show the zero service fee rate in the state column. The new books should arrive by July 1, but if they do not arrive before businesses prepare the June or second quarter coupon, businesses must change the state column service fee rate on the coupon to zero.
This is a further reduction in the service fee rate for monthly state sales tax filers. The rate went down from .0333 to .0135 for monthly returns filed on or after March 1, 2009. Retailers who file monthly and use coupons must make the change from .0333 to .0135 for the state sales tax service fee rate on the May coupon due June 22, 2009.
For those vendors required to pay Colorado retailer's use tax, the service fee rate is also reduced to zero for all filers. These retailer's use tax accounts will also receive revised preprinted forms, but until then, a change to the zero service fee rate for state use tax should be made on any forms filed on or after July 1, 2009. Retailers who file monthly that use coupons must also make the change from .0333 to .0135 for the state sales tax service fee rate on the May coupon due June 22, 2009.
This latest service fee rate change is the result of Senate Bill 09-275. Prior to this law change, the service fee could be kept by a Colorado sales/use tax licensee ONLY if the tax return was filed on time.