HomeMy WebLinkAbout09723AS AMENDED
JUNE 22, 2020
ORDINANCE NO. 9723
AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE
PUEBLO MUNICIPAL CODE RELATING TO ESTABLISHING
ECONOMIC NEXUS FOR RETAILERS WITHOUT PHYSICAL
PRESENCE IN THE STATE OF COLORADO AND
ESTABLISHING REPORTING AND REMITTANCE
REQUIREMENTS OF CITY SALES TAX FOR SUCH RETAILERS
WHEREAS, the City of Pueblo, Colorado, (the “City”), is a home rule municipality,
organized and existing under Article XX, Section 6 of the Colorado Constitution;
WHEREAS, pursuant to Article XX, Section 6 of the Colorado Constitution, the right to
enact, administer and enforce sales and use tax 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;
WHEREAS, pursuant to such authority, the City has adopted and enacted a Sales and
Use Tax Code. Under said Code, 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 law of the United States;
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”);
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;
WHEREAS, the delivery of tangible personal property, products or services into the City
rely on and burden local transportation systems, emergency and police services, waste disposal,
utilities and other infrastructure and services;
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 jobs and
increasing the share of taxes to those consumers who buy from competitors with a physical
presence in the State and its municipalities;
WHEREAS, it is appropriate for Colorado municipalities to adopt uniform definitions within
their 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;
WHEREAS, the goal of adopting this Ordinance is to join in on the simplification efforts of
all the self-collecting home rule municipalities in Colorado;
WHEREAS, this Ordinance provides a safe harbor to those who transact limited sales
within the City;
WHEREAS, absent such amendment, the continued failure of retailers to voluntarily apply
and remit sales tax owed on Remote Sales exposes the municipality to unremitted taxes and
permits an inequitable exception that prevents market participants from competing on an even
playing field;
WHEREAS, the City adopts this Ordinance with the intent to address tax administration,
and, in connection with, 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 City has entered into an agreement with the Colorado Department of
Revenue to use its Single Point of Remittance Software to reduce administrative and compliance
costs with respect to a retailer’s obligation to remit sales tax owed on Remote Sales.
NOW THEREFOR BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
(brackets indicate matter being deleted, underscoring indicates new matter being added)
SECTION 1.
Section 14-4-21 of Chapter 4 of Title XIV of the Pueblo Municipal Code is amended to
read as follows:
Sec. 14-4-21. - Definitions.
When not clearly otherwise indicated by the context, the following words and phrases, as
used in this Chapter, shall have the following meanings:
(1) Access services means the services furnished by a local exchange company to
its customers who provide telecommunications services which allow them to provide such
telecommunications services.
(2) Auction means any sale where tangible personal property is sold by an
auctioneer who is either the agent for the owner of such property or is in fact the owner thereof.
(3) Automotive vehicle means any vehicle or device in, upon, or by which any person
or property is or may be transported or drawn upon a public highway, or any device used or
designed for aviation or flight in the air. Automotive vehicle includes, but is not limited to, motor
vehicles, trailers, semitrailers or mobile homes. Automotive vehicle shall not include devices
moved by human power or used exclusively upon stationary rails or tracks.
(4) Business means all activities engaged in or caused to be engaged in with the
object of gain, benefit or advantage, direct or indirect.
(5) Charitable organization means any entity which:
a. Has been certified as a not-for-profit organization under Section 501(c)(3)
of the Internal Revenue Code; and
b. Is a religious or charitable organization.
As used in this definition, a charitable organization is an organization which exclusively,
and in a manner consistent with existing laws and for the benefit of an indefinite number of
persons, freely and voluntarily ministers to the physical, mental or spiritual needs of persons,
and which thereby lessens the burdens of government.
(6) Construction materials means tangible personal property which, when combined
with other tangible personal property, loses its identity to become an integral and inseparable
part of a completed structure or project including public and private improvements. Construction
materials include, but are not limited to, such things as: asphalt, bricks, builders' hardware,
caulking material, cement, concrete, conduit, electric wiring and connections, fireplace inserts,
electrical heating or cooling equipment, flooring, glass, gravel, insulation, lath, lead, lime,
lumber, macadam, millwork, mortar, oil, paint, piping, pipe valves, pipe fittings, plaster, plumbing
fixtures, putty, reinforcing mesh, road base, roofing, sand, sanitary sewer pipe, sheet metal, site
lighting, steel, stone, stucco, tile, trees, shrubs and other landscaping materials, wall board, wall
coping, wallpaper, weather stripping, wire netting and screen, water mains and meters, and
wood preservatives. Such materials, when used for forms or other items which do not become
and remain as an integral or inseparable part of a completed structure or project are not
construction materials.
(7) Consumer means (a) any individual person, or (b) any person engaged in
business in the City who uses, stores, distributes or otherwise consumes in the City tangible
personal property or taxable services purchased from sources inside or outside the City.
(8) Drugs dispensed in accordance with a prescription means drugs dispensed in
accordance with any order in writing, dated and signed by a licensed practitioner of the healing
arts, or given orally by such a practitioner, and immediately reduced to writing by the pharmacist,
assistant pharmacist or pharmacy intern, specifying the name and address of the person for
whom the medicine, drug or poison is offered and directions, if any, to be placed on the label.
(8.5) Economic nexus means 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:
(a) 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
(b) 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.
This definition does not apply to any person who is doing business in this state
but otherwise applies to any other person.
(9) Engaged in business in the City means performing or providing taxable services
in the City or selling, leasing, renting, delivering or installing tangible personal property for
storage, use or consumption within the City. Such term includes, but is not limited to, any one
of the following activities by a person:
a. Maintaining a building, store, office, salesroom, warehouse or other place
of business within the City either directly, indirectly or through a subsidiary;
b. Sending one (1) or more employees, agents or commissioned
salespersons into the City to solicit business or to demonstrate, install, assemble, repair,
service or assist in the use of its products, or for other business reasons;
c. Maintaining one (1) or more employees, agents or commissioned
salespersons on duty at a location within the taxing jurisdiction;
d. Owning, leasing, renting or otherwise exercising control over real or
personal property within the City;
e. Retailer or vendor in the state of Colorado making \[Making\] more than
one (1) delivery into the City within any twelve-month period\[.\];
f. Making retail sales sufficient to meet the definitional requirements
of economic nexus as set forth is Subsection 8.5 of this Section.
(10) Exempt commercial packaging materials means containers, labels and shipping
cases used by a person engaged in manufacturing, compounding, wholesaling, jobbing,
retailing, packaging, distributing or bottling, for sale, profit or use, that meet all of the following
conditions: (a) are used by such person to contain or label the finished product; (b) are
transferred by said person to the purchaser along with and as a part of the finished product;
and (c) are not returnable to said person for reuse.
(11) Farm closeout sale means full and final disposition of all tangible personal
property previously used by a farmer or rancher in farming or ranching operations which are
being abandoned.
(12) Finance Director means the Director of Finance of the City.
(13) Food means food for domestic home consumption as defined in 7 U.S.C.
§2012(g), as amended, for purposes of the Federal Food Stamp Program as defined in 7 U.S.C.
§2012(h), as amended; except that food does not include carbonated water marketed in
containers; chewing gum; seeds and plants to grow foods; prepared salads and salad bars; cold
sandwiches; deli trays; and food or drink vended by or through machines or noncoin-operated
coin-collecting food and snack devices on behalf of a vendor.
(14) Gross sales means the total amount received in money, credit, property or other
consideration valued in money for all sales, leases or rentals of tangible personal property or
services.
(15) License means a City sales tax, use tax or tax exempt license.
(16) Lodging services means the furnishing of rooms or accommodations by any
person, limited liability company, partnership, association, corporation, estate, receiver, trustee,
assignee, lessee, or any person acting in a representative capacity or any other combination of
individuals by whatever name known, to a person who for a consideration uses, possesses or
has the right to use or possess any room in a hotel, inn, bed and breakfast residence, apartment
hotel, lodging house, motor hotel, guesthouse, guest ranch, trailer coach, mobile home, auto
camp or trailer court and park, or similar establishment, for a period of less than thirty (30) days
under any concession, permit, right of access, license to use or other agreement, or otherwise.
(17) Resident of the City means a person, if an individual, whose primary or principal
residence is within the City or, if a firm, limited liability company, partnership or corporation,
whose primary or principal place of business is within the City.
(17.1) Marketplace means 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.
(17.2) Marketplace facilitator means a person who:
a. Contracts with a marketplace seller to facilitate for consideration,
regardless of whether 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;
b. 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
c. Either directly or indirectly, through agreements or arrangements
with third parties, collects the payment from the purchaser on behalf of the seller.
“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.
(17.3) Marketplace seller means a person, regardless of whether the person is
doing business in the City, who 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.
(18) Medical supplies means drugs, prosthetic medical and dental appliances, and
special beds for patients with neuromuscular or similar debilitating ailments, when sold for the
direct, personal use of a specific individual in accordance with a prescription or other written
directive issued by a licensed practitioner of medicine, dentistry or podiatry; corrective eyeglass
lenses (including eyeglass frames), and corrective contact lenses, when sold for the direct,
personal use of a specific individual in accordance with a prescription or other written directive
issued by a licensed practitioner of medicine or optometry; wheelchairs and crutches, when sold
for the direct, personal use of a specific individual; oxygen and hemodialysis products for use
by a medical patient, hearing aids, hearing aid batteries, insulin, insulin measuring and injecting
devices, glucose to be used for treatment of insulin reactions, and human whole blood, plasma,
blood products and derivatives. This exemption excludes items purchased for use by medical
and dental practitioners or medical facilities in providing their services, even though certain of
those items may be packaged for single use by individual patients after which the item would
be discarded.
(19) Mobile machinery and self-propelled construction equipment means those
vehicles, self-propelled or otherwise, which are not designed primarily for the transportation of
persons or cargo over the public highways, and those motor vehicles which may have originally
been designed for the transportation of persons or cargo over the public highways, and those
motor vehicles which may have originally been designed for the transportation of persons or
cargo but which have been redesigned or modified by the mounting thereon of special
equipment or machinery, and which may be only incidentally operated or moved over the public
highways. This definition includes but is not limited to wheeled vehicles commonly used in the
construction, maintenance and repair of roadways, the drilling of wells and the digging of
ditches.
(19.5) Multichannel seller means 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.
(20) Newspaper means a publication, printed on newsprint, intended for general
circulation, and published regularly at short intervals, containing information and editorials on
current events and news of general interest. The term newspaper does not include: magazines,
trade publications or journals, credit bulletins, advertising inserts, circulars, directories, maps,
racing programs, reprints, newspaper clipping and mailing services or listings, publications that
include an updating or revision service, or books or pocket editions of books.
(21) Pay television shall include, but not be limited to, cable, microwave or other
television service for which a charge is imposed.
(22) Person means any individual, firm, limited liability company, partnership, joint
venture, corporation, estate or trust, receiver, trustee, assignee, lessee or any person acting in
the fiduciary or representative capacity, whether appointed by court or otherwise or any group
or combination acting as a unit.
(23) Preprinted newspaper supplements shall mean inserts, attachments or
supplements circulated in newspapers that are: (a) primarily devoted to advertising; and (b) the
distribution, insertion or attachment of which is commonly paid for by the advertiser.
(24) Price or purchase price means the price to the consumer, exclusive of any direct
tax imposed by the federal government or by this Article, and, in the case of all retail sales
involving the exchange of property, also exclusive of the fair market value of the property
exchanged at the same time and place of the exchange, if:
a. Such exchanged property is to be sold thereafter in the usual course of
the retailer's business; or
b. Such exchanged property is a vehicle and is exchanged for another
vehicle and both vehicles are subject to licensing, registration or certification under the
laws of this State, including, but not limited to, vehicles operating upon public highways,
off-highway recreation vehicles, watercraft and aircraft. Any money or other
consideration paid over and above the value of the exchanged property is subject to tax.
Price or purchase price includes:
a. The amount of money received or due in cash and credits.
b. Property at fair market value taken in exchange but not for resale in the
usual course of the retailer's business.
c. Any consideration valued in money, such as trading stamps or coupons
whereby the manufacturer or someone else reimburses the retailer for part of the
purchase price and other media of exchange.
d. The total price charged on credit sales, including finance charges which
are not separately stated. An amount charged as interest on the unpaid balance of the
purchase price is not part of the purchase price unless the amount added to the purchase
price is included in the principal amount of a promissory note; except the interest or
carrying charge set out separately from the unpaid balance of the purchase price on the
face of the note is not part of the purchase price. An amount charged for insurance on
the property sold and separately stated is not part of the purchase price.
e. Installation, delivery and wheeling-in charges included in the purchase
price and not separately stated.
f. Transportation and other charges to effect delivery of tangible personal
property to the purchaser.
g. Indirect federal manufacturers' excise taxes, such as taxes on
automobiles, tires and floor stock.
h. The gross purchase price of articles sold after manufacturing or after
having been made to order, including the gross value of all the materials used, labor and
service performed and the profit thereon.
Price or purchase price shall not include:
a. Any sales or use tax imposed by the State or by any political subdivision
thereof.
b. The fair market value of property exchanged if such property is to be sold
thereafter in the retailer's usual course of business. This is not limited to exchanges in
Colorado. Out-of-state trade-ins are an allowable adjustment to the purchase price.
c. Discounts from the original price if such discount and the corresponding
decrease in sales tax due is actually passed on to the purchaser. An anticipated discount
to be allowed for payment on or before a given date is not an allowable adjustment to
the price in reporting gross sales.
(25) Private communications services means telecommunications services furnished
to a subscriber, which entitles the subscriber to exclusive or priority use of any communication
channel or groups of channels, or to the exclusive or priority use of any interstate
intercommunications system for the subscriber's stations.
(26) Prosthetic devices means any artificial limb, part, device or appliance for human
use which aids or replaces a bodily function; is designed, manufactured, altered or adjusted to
fit a particular individual; and is prescribed by a licensed practitioner of the healing arts.
Prosthetic devices include but are not limited to prescribed auditory, ophthalmic or ocular,
cardiac, dental or orthopedic devices or appliances, oxygen concentrators and oxygen with
related accessories.
(27) Purchase or sale means the acquisition for any consideration by any person of
tangible personal property or taxable services that are purchased, leased, rented, sold, used,
stored, distributed or consumed, but excludes a bona fide gift of property or services. These
terms include capital leases, installment and credit sales, and property and services acquired
by:
a. Transfer, either conditionally or absolutely, of title or possession or both
to tangible personal property;
b. A lease, lease-purchase agreement, rental or grant of a license, including
royalty agreements, to use tangible personal property or taxable services;
c. Performance of taxable services; or
d. Barter or exchange for other property or services including coupons.
The terms purchase and sale do not include:
a. A division of partnership or limited liability company assets among the
partners or limited liability company members according to their interests in the
partnership or limited liability company;
b. The formation of a corporation by the owners of a business and the
transfer of their business assets to the corporation solely in exchange for all the
corporation's outstanding stock, except qualifying shares, in proportion to the assets
contributed;
c. The transfer of assets of shareholders in the formation or dissolution of
professional corporations;
d. The dissolution and the pro rata distribution of the corporation's assets to
its stockholders;
e. A transfer of a limited liability company or partnership interest;
f. The transfer in a reorganization qualifying under Section 368(a)(1) of the
"Internal Revenue Code of 1954" as amended;
g. The formation of a limited liability company or partnership by the transfer
of assets to the limited liability company or partnership or transfers to a limited liability
company or partnership solely in exchange for proportionate interests in the limited
liability company or partnership;
h. The repossession of personal property by a chattel mortgage holder or
foreclosure by a lienholder;
i. The transfer of assets from a parent corporation to a subsidiary
corporation or corporations which are owned at least eighty percent (80%) by the parent
corporation, which transfer is solely in exchange for stock or securities of the subsidiary
corporation;
j. The transfer of assets from a subsidiary corporation or corporations which
are owned at least eighty percent (80%) by the parent corporation to a parent corporation
or to another subsidiary which is owned at least eighty percent (80%) by the parent
corporation, which transfer is solely in exchange for stock or securities of the parent
corporation or the subsidiary which received the assets;
k. The transfer of assets between parent and closely held subsidiary
corporations, or between subsidiary corporations closely held by the same parent
corporation, or between corporations which are owned by the same shareholders in
identical percentage of stock ownership amounts, computed on a share-by-share basis,
when a tax imposed by this Article was paid by the transferor corporation at the time it
acquired such assets, except to the extent that there is an increase in the fair market
value of such assets resulting from the manufacturing, fabricating or physical changing
of the assets by the transferor corporation. To such an extent any transfer referred to in
this paragraph k shall constitute a sale. For the purposes of this paragraph k, a closely
held subsidiary corporation is one in which the parent corporation owns stock
possessing at least eighty percent (80%) of the total combined voting power of all
classes of stock entitled to vote and owns at least eighty percent (80%) of the total
number of shares of all other classes of stock.
(28) Retail sales means all sales except wholesale sales.
(29) Retailer or Vendor means any person selling, leasing or renting tangible
personal property or services at retail. Retailer shall include any:
a. Auctioneer;
b. Salesperson, representative, peddler or canvasser, who makes sales as
a direct or indirect agent of or obtains such property or services sold from a dealer,
distributor, supervisor or employer;
c. Charitable organization, school or governmental entity which makes sales
of tangible personal property to the public, notwithstanding the fact that the merchandise
sold may have been acquired by gift or donation or that the proceeds are to be used for
charitable, school or governmental purposes\[.\];
d. Retailer-contractor, when acting in the capacity of a seller of
building supplies, construction materials, and other tangible personal property;
e. Marketplace facilitator, marketplace seller, or multichannel seller.
(30) Return means the sales and use tax reporting form used to report sales and use
tax.
(31) Sales tax means the tax to be collected and remitted by a retailer on sales taxed
under this Code.
(31.5) School means an educational institution not held or conducted for private gain or
profit, having a curriculum comparable to grade, grammar, junior high, high school or college,
or any combination thereof, requiring daily attendance, having an enrollment of at least forty
(40) students and charging a tuition fee.
(32) Security system services means electronic security system services. Such term
does not include nonelectronic security services such as consulting or human or guard dog
patrol services.
(33) Sound system services means sound system services involving provision of
broadcast or prerecorded audio programming to a building or portion thereof. Such term does
not include installation of sound systems where the entire system becomes the property of the
building owner or the sound system service is for presentation of live performances.
(34) Tangible personal property means corporeal personal property.
(35) Tax means the use tax due from a consumer, the sales tax due from a retailer or
the sum of both due from a retailer who also consumes.
(36) Tax deficiency means any amount of tax that is not reported or not paid on or
before the due date.
(37) Taxable sales means gross sales less any exemptions and deductions specified
in this Code.
(38) Taxable services means services subject to sales tax or use tax pursuant to this
Code.
(39) Taxpayer means any person obligated to collect and/or pay tax under the terms
of this Code.
(40) Telecommunications service means the transmission of any two-way interactive
electromagnetic communications, including but not limited to voice, image, data and any other
information, by the use of any means but not limited to wire, cable, fiber optical cable,
microwave, radio wave or any combinations of such media. Telecommunications service
includes but is not limited to basic local exchange telephone service, toll telephone service and
teletypewriter service, including but not limited to residential and business service, directory
assistance, cellular mobile telephone or telecommunication service, specialized mobile radio
and two-way pagers and paging service, including any form of mobile two-way communication.
Telecommunications service does not include separately stated nontransmission services
which constitute computer processing applications used to act on the information to be
transmitted.
(41) Total tax liability means the total of all tax, penalties or interest owed by a
taxpayer and shall include sales tax collected in excess of such tax computed on total sales.
(42) Use tax means the tax paid or required to be paid by a person for using, storing,
distributing or otherwise consuming tangible personal property or taxable services inside the
City.
(43) WATS/800 service means any outbound or inbound interstate wide area
telecommunications service or other similar service which entitles the subscriber, upon payment
of a periodic charge, based upon a flat amount and/or usage, to make or receive a large volume
of telephonic communications to or from persons having telephone or radio telephone stations
in specified areas which are outside the telephone system area in which the subscriber's station
is located.
(44) Wholesale sales means sales to licensed retailers, jobbers, dealers or
wholesalers for resale.
a. Sales by wholesalers to consumers are not wholesale sales. Sales by
wholesalers to nonlicensed retailers are not wholesale sales.
b. Sales to and purchases of tangible personal property by a person
engaged in the business of manufacturing, compounding for sale, profit or use, any
article, substance or commodity, which tangible personal property enters into the
processing of or becomes an ingredient or component part of the product which is
manufactured, compounded or furnished or the container, label or the furnished shipping
case thereof, shall be deemed to be wholesale sales and shall be deemed to be exempt
from taxation under this Chapter.
c. Sales and purchases of electricity, gas, coal, fuel, oil or coke, for use in
processing, manufacturing, mining, refining, irrigation, telegraph, telephone and radio
communication, street and railroad transportation services and all industrial uses, and
newsprint and printers' ink for use by publishers of newspapers and commercial printers
shall be deemed to be wholesale sales and shall be exempt from taxation under the
provisions of this Chapter, except that electricity, gas, coal, fuel oil or coke used for
lighting or space heating in these operations shall not be exempt.
(45) Wholesaler means any person selling to retailers, jobbers, dealers or other
wholesalers, for resale, and not for storage, use, consumption or distribution.
SECTION 2.
Section 14-4-86 of Chapter 4 of Title XIV of the Pueblo Municipal Code is amended to
read as follows:
Sec. 14-4-86. - Responsibility for payment; return; remittance; allowance.
\[Every\]Except for qualifying limitations with respect to marketplace sales as set
forth in Section 14-4-86.5 of this Chapter, every retailer, also herein called vendor, shall,
irrespective of the provisions of Section 14-4-85, be liable and responsible for the payment of
an amount equivalent to the rate of tax imposed by Section 14-4-85 on all sales made by him
or her of commodities or services specified in Section 14-4-61 and shall, before the twentieth
day of each month, make a return to the Director of Finance for the preceding calendar month
and remit an amount equivalent to the rate of tax imposed by Section 14-4-85 of this Chapter
on such sales to the Director of Finance.
(1) Return; Content, Form, Etc. Such returns of the taxpayer, or his or her duly
authorized agent, shall contain such information and be made in such manner and upon such
forms as the Director of Finance may prescribe, and the Director of Finance may extend the
time for making returns and paying the taxes due under such reasonable rules and regulations
as he or she may prescribe, but no such extension shall be for a greater period than is provided
in Section 14-4-92.
(2) Exemption; Burden of Proof. The burden of proof that any retailer is exempt from
collecting a tax upon any goods sold and paying same to the Director of Finance, or from making
such returns, shall be on the retailer or vendor under such reasonable requirements of proof as
the Director of Finance may prescribe.
(3) Every retailer or vendor conducting a business in which the transaction between
the vendor and the consumer consists of the supplying of tangible personal property and
services in connection with the maintenance of servicing of the same, shall be required to pay
the taxes levied under this Chapter upon the full contract price unless application is made to
the Director for permission to use a percentage basis of reporting the tangible personal property
sold and the services supplied under such contract. The Director is hereby authorized to
determine the percentage based upon the ratio of the tangible personal property included in the
consideration as it bears to the total of the consideration paid under said combination contract
or sale which shall be subject to the sales tax levied pursuant to the provisions of this Chapter.
This Section shall not be construed to include items upon which the sales tax is imposed on the
full purchase price as defined in Section 14-4-62 or otherwise in this Chapter.
(4) Every vendor vending individual items of personal property through coin-
operated vending machines shall be exempt from the provisions of Sections 14-4-85 and 14-4-
86 of this Chapter, but nevertheless such vendor shall pay a sales or use tax at the rate of tax
imposed by Section 14-4-85 of this Chapter on the personal property sold in excess of ten cents
($0.10) so vended in the coin-operated machines unless the sale shall be otherwise exempt
under the provisions of this Chapter.
(5) Excess Collections Failure to Remit Collections. If any vendor shall, during the
reporting period, collect as a tax an amount in excess of the rate of tax imposed by Section 14-
4-85 of this Chapter on his or her total taxable sales, he or she shall remit to the Director of
Finance the full net amount of the tax herein imposed and also such excess. If records of City
and State sales tax collections are kept separately, the vendor will remit the excess of City tax
and state tax collections, and if it is not possible to determine the excess to be remitted to each,
the vendor shall remit one-half (1/2) of such excess to the City. The retention by the vendor of
any excess of tax collections over the rate of tax imposed by Section 14-4-85 of this Chapter
on the total taxable sales of such vendor, or the intentional failure to remit punctually to the
Director of Finance the full amount required to be remitted by the provisions of this Chapter, is
hereby declared to be a violation of this Chapter.
SECTION 3.
Chapter 4 of Title XIV of the Pueblo Municipal Code is amended by the addition of a new
Section 14-4-86.5 to read as follows:
Sec. 14-4-86.5. – Marketplace Sales.
(a) Responsibility.
(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 vendor under Section 14-4-86 of this Chapter. 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 Chapter are in
addition to any duties and responsibilities of the marketplace facilitator has under
this Chapter 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 Chapter 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 Chapter; 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 Chapter made in or through the marketplace facilitator’s marketplace.
(5) With respect to sales of tangible personal property, products, or services
made by a marketplace seller which 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.
(b) 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 under Section 3 of this Ordinance may be
applied retroactively. Responsibilities, duties and liabilities described under Section 3 of this
Ordinance begin upon the earlier of when a person becomes licensed to collect the City’s sales
tax or when a person becomes legally obligated to collect the City’s sales tax as provided under
this Ordinance.
SECTION 5.
In the event any section, subsection, clause, phrase or portion of this Ordinance is for any
reason held illegal, invalid or unconstitutional by any court of competent jurisdiction, such portion
shall be deemed a separate, distinct and independent provision, and such holding shall not affect
the validity of the remainder of this Ordinance. It is the legislative intent of the City Council that
this Ordinance would have been adopted if such illegal provision had not been included or any
illegal application had not been made.
SECTION 6.
The officers and staff of the City are authorized and directed to perform any and all acts
consistent with the intent of this Ordinance to effectuate the policies and procedures described
herein.
SECTION 7.
This Ordinance shall become effective on the first day of the month which is at least thirty
(30) days after the date of final action by the Mayor and City Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on May 11, 2020 .
Final adoption of Ordinance by City Council on June 22, 2020 .
President of City Council
Action by the Mayor:
☒ Approved on June 26, 2020 .
☐ Disapproved on based on the following objections:
Mayor
Action by City Council After Disapproval by the Mayor:
☐ Council did not act to override the Mayor's veto.
☐ Ordinance re-adopted on a vote of , on
☐ Council action on __________________failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk
City Clerk’s Office Item # R-2
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: May 11, 2020
TO: President Dennis E. Flores and Members of City Council
CC: Mayor Nicholas A. Gradisar
VIA: Brenda Armijo, City Clerk
FROM: Charles Hernandez, Director of Finance
Robert P. Jagger, Sr. Assistant City Attorney
SUBJECT: AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XIV OF THE PUEBLO
MUNICIPAL CODE RELATING TO ESTABLISHING ECONOMIC NEXUS FOR
RETAILERS WITHOUT PHYSICAL PRESENCE IN THE STATE OF COLORADO
AND ESTABLISHING REPORTING AND REMITTANCE REQUIREMENTS OF
CITY SALES TAX FOR SUCH RETAILERS
SUMMARY:
The proposed Ordinance establishes economic nexus for retailers who do not have a physical
presence in the State of Colorado and establishes reporting and remittance requirements with
respect to City sales tax owed on sales made by such retailers.
PREVIOUS COUNCIL ACTION:
Not applicable to this Ordinance.
BACKGROUND:
Under the City’s Sales and Use Tax Code, City sales tax is levied on all sales and purchases of
tangible personal property at retail unless prohibited under the Constitution or law of the United
States. The United States Supreme Court recently 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”). Based upon such decision, the retailer’s obligation to collect Remote Sales is no longer
prohibited by the Constitution or law of the United States, and the City’s Sales and Use Tax Code
should be amended to clearly reflect such obligation consistent with said decision. The proposed
Ordinance accomplishes such amendment. Absent such amendment, the continued failure of
retailers to voluntarily apply and remit sales tax owed on remote sales will unfairly allow remote
sale customers to evade a lawful tax and will permit an inequitable exception that prevents market
participant from competing on an even playing field.
FINANCIAL IMPLICATIONS:
The financial impact will be recognition of additional sales tax revenue from those taxpayers filing
via the Department of Revenue Portal that are otherwise not required to file and remit taxes
directly to the City of Pueblo.
BOARD/COMMISSION RECOMMENDATION:
Not applicable to this Ordinance.
STAKEHOLDER PROCESS:
Not applicable to this Ordinance.
ALTERNATIVES:
If the proposed Ordinance is not passed and approved, retailers who fail to voluntarily apply and
remit sales tax owed on remote sales will continue to unfairly allow remote sale customers to
evade a lawful tax and will continue to permit an inequitable exception that prevents market
participant from competing on an even playing field.
RECOMMENDATION:
The proposed Ordinance be passed and approved.
Attachments: Proposed Ordinance