Colorado 2010 Tax Changes Now in Effect Will Impact Thousands of Businesses Nationwide

DENVER, April 19 /PRNewswire/ -- Companies doing business in the State of Colorado face numerous and complex changes in the state's tax laws that require immediate action on the part of corporate taxpayers.  The changes, many of which have already gone into effect, are designed to raise almost $150 million in additional tax revenues.  

"Many of the changes will impact companies operating in Colorado, as well as sales made within the state by retailers from outside Colorado," said Andy Hammons, Ryan Principal specializing in state tax issues.  "These changes in sales and use tax exemptions have created new complexities and compliance issues, making it more important than ever that companies have expert advice to avoid penalties and unexpected tax bills."

To illustrate the complexity of the new laws, a butcher who buys wrapping paper to wrap meat must pay sales tax on the paper.  However, the wrapping paper purchase is exempt from state-administered city and county taxes if the city or county in which the sale is made levies sales tax on food sold for domestic home consumption.

Another example is that the purchase of standardized software is now considered tangible personal property, therefore subject to the 2.9% state sales and use tax regardless of how downloaded onto the computer.

Other changes limit the amount of net operating losses that corporations can use to reduce taxable income to $250,000 per year and set limits on the enterprise zone investment tax credit taxpayers can claim on their income taxes.  The bill also sets stiff new reporting requirements for some out-of-state retailers and requires them to provide notices to purchasers regarding Colorado taxes.

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Ryan is the leading tax services firm in North America, with the largest transaction tax practice in the United States and Canada. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, and strategic planning. With a multi-disciplinary team of more than 800 professionals and associates, Ryan serves many of the world's most prominent Fortune 1000 companies.

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