DENVER – Cities such as Durango, Cortez and Pagosa Springs will have to give up some of their sales-tax powers if Colorado is to be able to tax Internet purchases, a senior lawmaker said Thursday.
Speaker of the House Mark Ferrandino, D-Denver, said city and state officials have been working quietly for about a year to figure out how to harmonize the way they collect sales taxes.
A bill in Congress known as the Marketplace Fairness Act would allow states to tax Internet sales from out-of-state businesses, but only if they make it easy for retailers by letting the state be the sole tax collector and creating a common list of items taxed.
“Colorado has a very complex and intricate sales-tax system. We would need to see changes,” Ferrandino said.
The state already collects taxes for its 64 counties and many towns, but home-rule cities such as Durango can collect their own taxes and set their own list of items that are taxed. And they’re not in a hurry to give up that power.
Ferrandino is not sure if the sides will be able to reach consensus this year, but he said Thursday that he would take the discussion public within the next month.
“No pen has gone to paper in terms of a bill, but it’s a conversation that needs to move forward,” Ferrandino said.
Legislators – chiefly Democrats – have been trying to tax Internet sales for several years. An “Amazon tax” bill from 2010 was thrown out in federal court when Internet businesses sued.
Also Thursday, Ferrandino threw cold water on the top-priority bill by Senate Democrats. Senate Bill 1 would give out three tax credits to the working poor, at a possible cost to the state treasury of tens of millions of dollars.
Ferrandino said that could be problematic because school spending is $1 billion below where it should be, and it needs to be restored.
“We need to understand the budgetary picture before we jump on any tax policy, be it Senate Bill 1 or anything else,” he said.