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The Colorado Supreme Court has decided that the Executive Director of the Colorado Department of Revenue had jurisdiction to hear a taxpayer’s appeal of two towns’ denial of use tax refund requests. Although the towns’ municipal codes required that the taxpayer submit to both an informal and a formal hearing, the State’s statutes governing use tax refund appeal processes limited the towns to only be able to conduct informal hearings. Further, the taxpayer’s appeal to the Executive Director was proper because the taxpayer waited the required 90-day statutory waiting period after its requests for issuance of formal decisions by the towns were ignored. (MDC Holdings, Inc. v. Town of Parker, Colorado Supreme Court, No. 08SC972, February 8, 2010)


The Colorado vendor’s service fee, which is a portion of the sales tax collected that is retained by the vendor to cover expenses relating to collecting and remitting the tax, has been suspended from July 1, 2009, through June 30, 2011. If the September 2010 Legislative Council Staff’s forecast indicates sufficient revenue to fund a 6% increase in General Fund spending for fiscal year 2010-2011, the vendor’s service fee will return to 3.33% on January 1, 2011. Interest and penalties will be waived until August 1, 2009 for remittance errors made due to this change in the vendor’s fee.

Previously, the fee was reduced from 3.33% to 1.35% until January 1, 2012. Due to this new fee elimination, the 1.35% rate is only effective from March 1, 2009, through June 30, 2009. (S.B. 275, Laws 2009, effective May 18, 2009, and applicable as noted above)


The Connecticut Department of Revenue Services has issued an informational publication concerning the proper use of resale certificates. The gross receipts from the sale of a taxable item or service are subject to sales tax unless the purchaser issues a properly completed resale or exemption certificate to the retailer at the time of the sale. Retailers must keep a copy for their records. The publication discusses who may issue resale certificates, what information must be included on a resale certificate, and the retailer’s responsibility in accepting resale certificates.

Retailers may only accept resale certificates in good faith from the issuer. Resale certificates may be issued for one purchase or may be issued as a blanket certificate for a continuing line of purchases. Connecticut resale certificates should have the tax identification number from the issuer’s state of business or, if none, the Federal Employer Identification Number. If an issuer is not required to have a Connecticut Sales and Use Tax Permit, the issuer should attach a statement to the resale certificate stating that the issuer is not required to have a Connecticut Sales and Use Tax Permit because it is not making sales in Connecticut or making sales that are otherwise subject to Connecticut sales and use taxes (Informational Publication 2009 (15), Connecticut Department of Revenue Services, April 8, 2009).


In a revenue notice, Kansas announced that the discount rate extended to Colorado retailers for collecting and remitting Kansas compensating use tax will be reduced to 0% beginning with returns filed on or after July 1, 2009. This came as a result of Colorado announcing a reduction in its discount rate to zero for Colorado retailers as well as Kansas retailers who collect and remit Colorado compensating use tax. (Notice 09-08, Kansas Department of Revenue, June 26, 2009)


Colorado legislation temporarily eliminates the ability of any vendor to retain any amount of state sales tax revenues to compensate for the vendor’s expenses incurred to collect and remit from July 1, 2009 through June 30, 2010. Vendors, however, will not be liable for interest and penalties imposed as a result of an error made due to the change of the vendor fee on any returns prior to August 1, 2009 (S.B. 275, Laws 2009, effective May 18, 2009).



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