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HCR 25B-1001

Voter Approval for State Vendor Fee Reductions

2025 First Extraordinary Session Introduced by Max Brooks and 3 co-sponsors

Requires voter approval for any future reductions to Colorado's state vendor fee, effective Jan 1, 2027, if the 2026 ballot measure passes.

Introduced In House - Assigned to State, Civic, Military, & Veterans Affairs
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Bill Summary · HCR 25B-1001

Summary: HCR 25B-1001 — Voter Approval for State Vendor Fee Reductions

What the bill would do

  • HCR 25B-1001 is a House Concurrent Resolution proposing a constitutional amendment to require voter approval for any future reductions to the state vendor fee beginning January 1, 2027.
  • The resolution would Refer a ballot measure to Colorado voters at the November 2026 general election. If approved by voters (55% yes), the amendment becomes part of the Colorado Constitution.

Background: what is the “vendor fee”

  • The vendor fee is a service fee retailers may keep to cover costs of collecting and remitting state sales tax. It is applied only to timely, small-file tax returns (less than $1,000,000).
  • Over time, the vendor fee has fluctuated; as of January 1, 2020 it stands at 4.00%.
  • House Bill 19-1245 capped the vendor fee allowance at $1,000 per filing period per retailer (one retailer per state if multiple locations).
  • Any portion of the vendor fee not retained by retailers (above the cap) typically flows to the Housing Development Grant Fund (HDGF), with some years redirected to the General Fund under subsequent legislation (e.g., HB 24-1434). The HDGF funds affordable housing via a competitive grant process.
  • In FY 2024-25, sales tax revenue linked to the HB 19-1245 vendor fee changes totaled about $76.8 million, with roughly $40.8 million going to the HDGF.

Key provisions of the introduced measure

  • Definition: The amendment would define what constitutes a “reduction to the state vendor fee” (changes to the percentage retained, caps on dollars retained, or eligibility limitations for retailers).
  • Voting requirement: Starting January 1, 2027, any reduction to the state vendor fee would require advance voter approval (unless other specified subsections apply).
  • Ballot language: The measure would be placed on the 2026 general election ballot with a title asking voters if there should be an amendment requiring voter approval for reductions to the vendor fee.
  • Effective date: If voters approve the measure, the constitutional change would take effect January 1, 2027.

Impacts (as described in fiscal notes)

  • State Revenue: Conditional impact on General Fund and HDGF from future vendor fee reductions, depending on whether the legislature refers changes to voters and whether voters approve them.
  • State Expenditures: No new appropriations are required for the measure itself; election-related costs (ballot printing, publication, and reimbursements to counties) would be incurred as part of placing the measure on the ballot.
  • FTE: No change in State FTE anticipated.
  • Note: Two fiscal notes (one initial, one final) indicate potential impacts but both reflect the introduced version; the measure was postponed indefinitely by the House committee, so these potential impacts do not take effect unless the measure advances.

Status and procedural timeline

  • Introduced: August 21, 2025
  • Assigned to: State, Civic, Military, & Veterans Affairs
  • Committee action: Postponed Indefinitely (August 21, 2025)
  • If it progresses and voters approve: Effective January 1, 2027

Who would be affected

  • Retailers and small businesses paying the vendor fee (and benefiting from the cap and HDGF allocations)
  • State and local governments relying on vendor fee revenue
  • The Housing Development Grant Fund (HDGF) and related affordable housing funding
  • Colorado voters (as the ultimate decision makers on the proposed constitutional amendment)

Bottom line

HCR 25B-1001 seeks to elevate vendor-fee adjustments to a public-vote requirement, starting in 2027, by placing a constitutional amendment on the 2026 ballot. The measure would limit the legislature’s ability to reduce the vendor fee without voter approval, potentially affecting state revenue distributions to the General Fund and HDGF and influencing housing funding. The bill was postponed indefinitely in committee, so it has not advanced.

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

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