State lawmakers in Colorado have voted to eliminate the state sales tax vendor fee, a move that has drawn criticism from small business advocates. The vendor fee previously provided retailers with a small allowance for their role in collecting sales taxes on behalf of the state.
Michael Smith, State Director of the National Federation of Independent Business (NFIB) in Colorado, issued a statement following the decision:
“For years, our state has given a small allowance to retailers – small business owners – for their time and effort to collect sales tax on behalf of the state. This has been a long-standing practice that has supported Main Street, and overall, cost the state very little. Despite this, state lawmakers just voted to eliminate it, making every small business owner in Colorado an unpaid tax collector. Not only will Main Street Coloradans have to contend with more red-tape, an ongoing worker shortage, and higher risk of litigation, but now, they have to collect taxes on behalf of the state without any compensation. This is deeply unfortunate. We thank the bipartisan group of lawmakers who worked to preserve this important pro-small business provision, and will work to get it restored in future legislative sessions.”
The change means that retailers across Colorado will no longer receive compensation for handling sales tax collections for the government. Small businesses are expected to face additional administrative responsibilities without financial support.
