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HB 25B-1021

Retention of Vendors Fees for Collecting Sales Tax.

2025 First Extraordinary Session Introduced by Tony Hartsook and 2 co-sponsors

HB 25B-1021 proposed raising the vendor fee cap for small retailers from $1,000 to $2,000, easing their sales tax collection costs, but was postponed indefinitely.

Introduced In House - Assigned to State, Civic, Military, & Veterans Affairs
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Bill Summary · HB 25B-1021

Summary of HB 25B-1021: Retention of Vendors Fees for Collecting Sales Tax

Bill Overview

Bill Number: HB 25B-1021
Introduced: August 21, 2025
Status: Postponed Indefinitely by the House Committee on State, Civic, Military, & Veterans Affairs
Sponsors: Rep. Dan Woog, Rep. Anthony Hartsook, Sen. Barbara Kirkmeyer

The purpose of HB 25B-1021 is to amend the existing sales tax vendor fee structure in Colorado, specifically to increase the amount retailers can retain for collecting sales tax. This bill aims to alleviate some of the financial burdens faced by small retailers in the state.

Key Provisions

  • Increase in Vendor Fee Cap: The bill proposes to raise the maximum vendor fee that retailers can retain from $1,000 to $2,000 per filing period, effective January 1, 2026.
  • Minimum Retention Rate: It establishes that the percentage of sales tax reported that a retailer may retain as a vendor fee must not fall below 2% of the tax reported.
  • Protection Against Reductions: The bill disallows any future reductions to the vendor fee cap and rate starting January 1, 2026.

Impact of the Bill

Financial Implications

  • State Revenue: The bill was projected to decrease General Fund revenue by $110,208 in FY 2025-26 and $220,416 in FY 2026-27 and subsequent years.
  • State Expenditures: The Department of Revenue anticipated an increase in expenditures of approximately $70,198 for FY 2025-26, decreasing to $39,061 in FY 2026-27, primarily for programming and staffing needs related to the implementation of the new vendor fee structure.

Affected Parties

  • Retailers: Small retailers, particularly those with taxable sales under $1 million per filing period, would benefit from the increased vendor fee cap, allowing them to retain more funds to cover their sales tax collection costs.
  • State Government: The state would experience a reduction in revenue from sales tax collections due to the increased vendor fee retention by retailers.

Procedural Aspects

  • The bill was introduced and assigned to the House Committee on State, Civic, Military, & Veterans Affairs but was postponed indefinitely on the same day it was introduced.
  • If enacted, the changes would take effect on January 1, 2026, unless a referendum petition is filed, in which case the bill would require voter approval in the November 2026 election.

Conclusion

HB 25B-1021 aimed to support small retailers in Colorado by increasing the vendor fee cap and ensuring a minimum retention rate for sales tax collections. However, the bill was postponed indefinitely, meaning it will not proceed through the legislative process at this time.

Compiled from official sources — confirm details with the bill’s official record.

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