Thanks to Colorado HB21-1265 enacted on June 14, 2021, restaurants and bars may retain a portion of their monthly state sales taxes in June, July and August 2021.
This bill provides a second round of state sales tax relief to eligible Colorado businesses in the food & beverage service industry. In 2020, Colorado legislators passed HB20B-1004, which allowed restaurants, bars, and food trucks to take a special deduction against their net state sales tax in November & December 2020, and January & February 2021. In addition to providing another three months of tax relief in 2021, HB21-1265 expands the program to include caterers, hotel-operated establishments, and food service contractors.
If your business qualifies for this special tax deduction but you have already paid your state sales taxes for an eligible period, you may claim a refund from the CO Department of Revenue. To claim sales tax relief in the current reporting period, simply take the deduction in the state column of Section B.
Eligible retailers are still required to collect all applicable state and state-administered local sales taxes, file returns on time, and pay all local sales taxes (in addition to state sales taxes in excess of the amount related to the special deduction). The special deduction does not apply to any taxes imposed by any state-administered city, county, or special district.
Visit Tax.Colorado.gov/Sales-Tax-Relief for eligibility details and filing instructions.