As of July 1, some Colorado businesses can retain their sales tax revenue due to Colorado House Bill 22-1406. The bill was proposed by Representative Dylan Roberts and signed into law by Governor Polis on June 3.
From July to September of 2022, fixed or mobile food service businesses—such as those that serve alcoholic beverages or catering, or “retailers that operate a hotel-operated restaurant, bar, or catering service in the state”—can maintain these additional activities. State tax dollars.
However, there is one caveat. Companies applying can collect up to $70,000 in tax revenue over a maximum of five locations, if there is more than one location from which the company is collecting.
A bill similar to this one was passed in 2020 and 2021 due to the coronavirus pandemic. Roberts said many businesses have been hit by the shutdown, especially those in the mountain tourism industries.
“A lot of restaurants, of course, have had to stop eating in person, and I’ve been really affected by the pandemic restrictions, hence the idea,” Roberts said. “Then we decided to do it again this year.”
Roberts chose to renew the bill for the months of July, August and September – the same timeframe for the 2021 edition.
“We targeted this at a time when restaurants, particularly here in our mountain communities, are the busiest,” he said. “We wanted to try to maximize the return.”
There are only benefits to this bill, said TJ Messerschmitt, owner of Fatty’s Pizzeria in Breckenridge and president of the Breckenridge Restaurant Association. He said that companies suffered from a lack of job opportunities and high prices after the crisis ended.
“Over the last two years, wages have gone up dramatically, but the big thing we’ve seen this year is inflation and the cost of all our products,” Messerschmidt said. “Everything we buy—wine, beer, liquor, food—everything has gone up, including all our paper goods.”
The inflation rate in the United States was 8.6%. in May 2022. For comparison, inflation was at only 5% in May of 2021. So why does the law apply to the food service industry only?
Roberts, who is currently representing Eagle and Root counties, said he wants to focus on helping companies that support the tourism industry.
“They are both major employers in our communities, but they are also the lifeblood of our economy,” he said.
This bill, then, will help restaurants to afford both large and small purchases.
“It’s a positive thing,” Messerschmidt said. “It’s a nice little bonus for restaurant owners.”
Any eligible business will have to claim a deduction on its tax filings to the state. According to the text of the law, “Eligible entities are restaurants (excluding multi-state chains), bars, food carts, catering companies and hotels that serve food.”
More information can be found at Tax.Colorado.govQuestions may be directed to the Colorado Department of Revenue, or to Roberts’ office at 303-866-2923.
“If we can give the employers that hire these people a little break, hopefully we can increase wages, keep employees, try to get through that period and keep people here,” Roberts said.