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Bill

HB 1021

Retention of Vendors Fees for Collecting Sales Tax.

2025 First Extraordinary Session

HB 1021 would allow Colorado vendors to retain a percentage of collected sales tax instead of remitting full amounts, potentially reducing state revenue directed to schools and services.

Introduced In House - Assigned to State, Civic, Military, & Veterans Affairs
#business&economicdevelopment #fiscalpolicy&taxes
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Bill Summary · HB 1021

Legislative bill overview

HB 1021 would allow vendors to retain a portion of sales tax they collect on behalf of the state, rather than remitting the full amount to Colorado. The bill establishes a mechanism for vendors to keep a fee from the sales tax collections as compensation for their administrative burden in collecting and processing these taxes.

Why is this important

Sales tax collection is a critical revenue source for Colorado state and local governments, funding schools, infrastructure, and public services. This bill directly affects how much revenue reaches the state treasury and could impact the funding available for these essential services. The vendor retention model exists in some states but represents a shift from Colorado's current system where vendors receive compensation only through a separate administrative allowance.

Potential points of contention

  • Revenue impact: Allowing vendors to retain portions of collected sales tax could significantly reduce state and local government revenues unless offset by other means, potentially affecting budget allocations for public services
  • Fairness and economic burden: Small businesses versus large retailers may experience different financial impacts from this arrangement, raising equity concerns about how the policy affects different business sizes
  • Implementation complexity: Determining appropriate retention percentages, tracking mechanisms, and ensuring compliance across thousands of vendors could create administrative challenges and enforcement costs

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

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