HomeMy WebLinkAboutOrdinance 1719COUNCIL BILL NO. _______
ORDINANCE NO. 1719
Series 2021
TITLE: AN ORDINANCE AMENDING CHAPTER 22 OF THE WHEAT RIDGE
CODE OF LAWS, CONCERNING TAXATION, AND IN CONNECTION
THEREWITH, APPROVING AN AGREEMENT WITH THE COLORADO
DEPARTMENT OF REVENUE FOR USE OF THE DEPARTMENT’S SALES
AND USE TAX SOFTWARE SYSTEM
WHEREAS, the City of Wheat Ridge is a home rule municipality having all
powers conferred by Article XX of the Colorado Constitution; and
WHEREAS, pursuant to its home rule authority and C.R.S. § 31-15-101 et seq,
the City, acting through its City Council (the “Council”), is authorized to adopt
ordinances for the protection of the public health, safety or welfare; and
WHEREAS, pursuant to Article XX, Section 6 of the Colorado Constitution, the
right to enact, administer and enforce sales taxes is clearly within the constitutional
grant of power to the City and is necessary to raise revenue with which to conduct the
affairs and render the services performed by the City; and
WHEREAS, pursuant to such authority, the City has adopted and enacted a
sales and use tax code under which City sales tax is levied on all sales and purchases
of tangible personal property or taxable services at retail unless prohibited, as
applicable to the provision of this Ordinance, under the Constitution or laws of the
United States; and
WHEREAS, the United States Supreme Court in South Dakota v. Wayfair, 138
S.Ct. 2080 (2018), overturned prior precedent and held that a State is not prohibited by
the Commerce Clause from requiring a retailer to collect sales tax based solely on the
fact that such retailer does not have a physical presence in the State (“remote sales”);
and
WHEREAS, based upon such decision, the retailer’s obligation to collect remote
sales is no longer based on the retailer’s physical presence in the jurisdiction by the
Constitution or law of the United States, and the City’s sales and use tax code needs to
be amended to clearly reflect such obligation consistent with said decision; and
WHEREAS, the delivery of tangible personal property, products, or services into
the City relies on and burdens local transportation systems, emergency and police
services, and other infrastructure and services; and
WHEREAS, the failure to tax remote sales creates incentives for businesses to
avoid a physical presence in the State and its respective communities, resulting in fewer
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CITY OF WHEAT RIDGE, COLORADO INTRODUCED BY COUNCIL MEMBER URBAN
jobs and increasing the share of taxes to those consumers who buy from competitors
with a physical presence in the State and its municipalities; and
WHEREAS, it is appropriate for the City to adopt uniform definitions within its
sales tax codes to encompass marketplace facilitators, marketplace sellers, and
multichannel sellers that do not have a physical presence in the City, but that still have a
taxable connection with the City; and
WHEREAS, the goal of adopting this ordinance is to join in the simplification
efforts of all the self-collecting home rule municipalities in Colorado; and
WHEREAS, this ordinance provides a safe harbor to those who transact limited
sales within the City; and
WHEREAS, absent such amendment, the continued failure of retailers to
voluntarily apply and remit sales tax owed on remote sales exposes the City to
unremitted taxes and permits an inequitable exception that prevents market participants
from competing on an even playing field; and
WHEREAS, the Council adopts this ordinance with the intent to address tax
administration, and, in connection therewith, establish economic nexus for retailers or
vendors without physical presence in the State and require the retailer or vendor to
collect and remit sales tax for all sales made within the marketplace; and
WHEREAS, the Council finds it necessary to update definitions in Chapter 22 to
recognize the evolving nature of tangible personal property; and
WHEREAS, in order to improve the collection of sales and use taxes on remote
sales, the Council finds it appropriate to enter into an agreement with the Colorado
Department of Revenue to permit access by the City to the Department’s Sales and Use
Tax Software (“SUTS”) system.
NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WHEAT RIDGE, COLORADO:
Section 1. Section 22-21 of the Wheat Ridge Code of Laws (the “Code”)
(Definitions and usage) is amended by the amendment of the following definitions:
Engaged in business in the city is amended by the revision of
subsection (5) and the addition of a new subsection (6) to read:
“(5) Makes more than one (1) delivery into the taxing jurisdiction within
a twelve-month period by any means other than a common
carrier.”
“(6) Makes retail sales sufficient to meet the definitional requirements
of Economic Nexus as defined in this section.”
Retailer is defined to include “or vendor” and is further amended by the addition of a
new subsection (5) to read:
“(5) Marketplace facilitator, marketplace seller, or multichannel seller.”
Tangible personal property is amended to read: “Personal property that can be one (1)
or more of the following: seen, weighed, measured, felt, touched, stored, transported,
exchanged, or that is any other manner perceptible to the senses. “TANGIBLE
PERSONAL PROPERTY” INCLUDES DIGITAL GOODS, IRRESPECTIVE OF THE
METOHOD OF DELIVERY UNDER CURRENT TECHNOLOGY, IHNCLUDING
WITHOUT LIMITATION COMPACT DISC, ELECTRONIC DOWNLOAD OR INTERNET
STREAMING. AS USED IN THIS SECTION, “DIGITAL GOODS” MEANS ANY ITEM
OF TANGIBLE PERSONAL PROPERTY THAT IS DELIVERED OR STORED BY
DIGITAL MEANS, INCLUDING WITHOUT LIMITATION VIDEO, MUSIC OR
ELECTRONIC BOOKS.”
Section 2. Section 22-21 of the Code (Definitions and usage) is further
amended by the adoption of the following definitions, in their appropriate alphabetical
order:
Economic Nexus: the connection between the City and a person not having a
physical nexus in the State of Colorado, which connection is established when
the person or marketplace facilitator makes retail sales into the City, and:
(1)In the previous calendar year, the person, which includes a
marketplace facilitator, has made retail sales into the state exceeding
the amount specified in C.R.S. § 39-26-102(3)(c), as amended; or
(2)In the current calendar year, 90 days has passed following the month
in which the person, which includes a marketplace facilitator, has made
retail sales into the state exceeding the amount specified in C.R.S. §
39-26-102(3)(c), as amended.
(3)This definition does not apply to any person who is doing business in
this state but otherwise applies to any other person.
Marketplace: a physical or electronic forum, including, but not limited to a store, a
booth, an internet website, a catalog, or a dedicated sales software application,
where tangible personal property, taxable products, or taxable services are
offered for sale.
Marketplace Facilitator: a person who
(1)Contracts with a marketplace seller or multichannel seller to facilitate
for consideration, regardless of whether or not the consideration is
deducted as fees from the transaction, the sale of the marketplace
seller’s tangible personal property, products, or services through the
person’s marketplace;
(2)Engages directly or indirectly, through one or more affiliated persons,
in transmitting or otherwise communicating the offer or acceptance
between a purchaser and the marketplace seller or multichannel seller;
and
(3)Either directly or indirectly, through agreements or arrangements with
third parties, collects payment from the purchaser on behalf of the
seller.
(4)Marketplace Facilitator does not include a person that exclusively
provides internet advertising services or lists products for sale, and that
does not otherwise meet this definition.
Marketplace Seller: a person, regardless of whether or not the person is engaged
in business in the city, which has an agreement with a marketplace facilitator and
offers for sale tangible personal property, products, or services through a
marketplace owned, operated, or controlled by a marketplace facilitator.
Multichannel Seller: a retailer that offers for sale tangible personal property,
commodities, or services through a marketplace owned, operated, or controlled
by a marketplace facilitator, and through other means.
Section 3. Section 22 of the Code is hereby amended by the addition of the
following new Section 22-51:
Marketplace Sales:
(1) A marketplace facilitator engaged in business in the city is required to
collect and remit sales tax on all taxable sales made by the
marketplace facilitator or facilitated by it for marketplace sellers or
multichannel sellers to customers in the city, whether or not the
marketplace seller for whom sales are facilitated would have been
required to collect sales tax had the sale not been facilitated by the
marketplace facilitator.
(2) A marketplace facilitator shall assume all the duties, responsibilities,
and liabilities of a retailer or vendor under Section 22-39. Marketplace
facilitators shall be liable for the taxes collected from marketplace
sellers or multichannel sellers. The city may recover any unpaid taxes,
penalties, and interest from the marketplace facilitator that is
responsible for collecting on behalf of marketplace sellers or
multichannel sellers.
(3)The liabilities, obligations, and rights set forth under this article are in
addition to any duties and responsibilities the marketplace facilitator
has under this article if it also offers for sale tangible personal property,
products, or services through other means.
(4)A marketplace seller, with respect to sales of tangible personal
property, products, or services made in or through a marketplace
facilitator’s marketplace, does not have the liabilities, obligations, or
rights of a retailer under this article if the marketplace seller can show
that such sale was facilitated by a marketplace facilitator:
a.With whom the marketplace seller has a contract that explicitly
provides that the marketplace facilitator will collect and remit
sales tax on all sales subject to tax under this article; or
b.From whom the marketplace seller requested and received in
good faith a certification that the marketplace facilitator is
registered to collect sales tax and will collect sales tax on all sales
subject to tax under this article made in or through the
marketplace facilitator’s marketplace.
(5)If a marketplace seller makes a sale that is not facilitated by a licensed
marketplace facilitator in a marketplace, the marketplace seller is
subject to all of the same licensing, collection, remittance, filing and
recordkeeping requirements as any other retailer.
(6)Auditing. With respect to any sale, the city shall solely audit the
marketplace facilitator for sales made by marketplace sellers or
multichannel sellers but facilitated by the marketplace. The city will not
audit or otherwise assess tax against marketplace sellers or
multichannel sellers for sales facilitated by a marketplace facilitator.
Section 4. No obligation to collect the sales and use tax required by this
Chapter may be applied retroactively. Responsibilities, duties, and liabilities described in
section 22-51 of a marketplace facilitator, marketplace seller, or multichannel seller
begin upon the earlier of when they became licensed to collect the city’s sales tax or
when they became legally obligated to collect the city’s sales tax under Section 22-51.
Section 5. Section 22-100(a) is amended to read:
(a)Tax imposed; conditions. There is hereby imposed an excise
tax on the price paid or charged for the lease, rental or on the
transaction of furnishing rooms or accommodations to any
person who for a consideration uses, possesses or has the
right to use or possess any room or rooms or other
accommodations in any hotel, apartment hotel, guesthouse,
guest ranch, mobile home, auto camp, trailer, court or park, or
any other place furnishing rooms or other accommodations
under any concession, permit, right of access, license to use
or other special agreement. THIS TAX SHALL BE
COLLECTED BY ALL RETAILERS, VENDORS,
MARKETPLACE FACILITATORS, MARKETPLACE SELLERS
AND MULTICHANNEL SELLERS. Such tax on
accommodations shall be subject to the following conditions:
. . .
Section 6. Agreement approved. The Agreement Regarding Department of
Revenue Sales and Use Tax Software (“SUTS System”) between the City and the
Colorado Department of Revenue, attached hereto as Exhibit A, is hereby approved,
and the Mayor and City Clerk are authorized and directed to execute the same.
Section 7. Effective Date. This Ordinance shall take effect fifteen (15) days
after final publication, as provided by Section 5.11 of the Charter.
INTRODUCED, READ, AND ADOPTED on first reading by a vote of 8 to 0 on
this 26th day of July, 2021, ordered published in full in a newspaper of general
circulation in the City of Wheat Ridge, and Public Hearing and consideration on final
passage set for August 9, 2021 at 7:00 p.m., in the Council Chambers, 7500
West 29th Avenue, Wheat Ridge, Colorado.
READ, ADOPTED AND ORDERED PUBLISHED on second and final reading by
a vote of 8 to 0, this 9th day of August, 2021.
SIGNED by the Mayor on this 18th day of August, 2021.
__________________________________
Bud Starker, Mayor
ATTEST:
_________________________
Stephen Kirkpatrick, City Clerk
Approved as to Form
_________________________
Gerald E. Dahl, City Attorney
First Publication: July 29, 2021
Second Publication: August 12, 2021Jeffco Transcript
Effective Date: August 27, 2021
Published: Jeffco Transcript and www.ci.wheatridge.co.us
AGREEMENT REGARDING DEPARTMENT OF REVENUE SALES AND USE TAX SOFTWARE ("SUTS SYSTEM") This agreement regarding the SUTS System ("Agreement") is entered between the Colorado Department of Revenue ("CDOR") and the undersigned home rule local taxing jurisdiction ("Jurisdiction," collectively, "the Parties") for the purposes of permitting access to the SUTS System and its related tax information look up tool as described in this Agreement. The SUTS System permits the acceptance of returns and processing of payments for the sales and use tax levied by the state and any local taxing jurisdictions in accord with the objectives of SB19-006. To further those objectives here, the Parties agree to the following: AGREEMENT CDOR grants Jurisdiction access to the SUTS System for Jurisdiction's use in the collection and payment of Sales and Use tax under the terms set forth in this Agreement.
A.Purpose of AgreementPursuant to Senate Bill 19-006, CDOR has contracted with vendors, including at this time, MUNIRevs, Inc. and Transaction Tax Resources, Inc., Fast Enterprises, LLC, and others, which may change from time to time (collectively, ''Vendors") to provide a sales and use tax simplification system that allows taxpayers to look up and remit sales and use taxes through a single portal managed by Vendors and held in trust for the benefit of the Jurisdiction.
B.Definitions1)"Confidential Information" means any information derived from the SUTSSystem, including but not limited to taxpayer information, return information, and"personally identifiable information," as defined in section 24-73-101(4) (b), C.R.S.2)A "Security Incident," has the meaning set forth in section 24-37.5-402(10),C.R.S., which is "an accidental or deliberate event that results in or constitutes animminent threat of the unauthorized access, loss, disclosure, modification,disruption, or destruction of communication and information resources." Securityincidents include but are not limited to: a) detection of a virus, worm, malware, etc;b)unauthorized use of an information resource; c) unauthorized modification of aninformation resource; d) theft or diversion of an information resource; e) theft ordiversion of property using an information resource, and f) vandalism or otherdamage to an .information resource."3)"Taxpayer" means any individual or business required to remit sales or use taxesto a taxing jurisdiction.Exhibit A SUTS System Agreement