The Colorado Department of Revenue, Division of Taxation, is seeking input from stakeholders regarding a draft of the following new rule Rule 39-26-704–4 . Sales Tax Exemptions for Hotel Residents.  Click the link to see the proposed draft language and change.

For a copy of the announcement and instructions on submitting comments, click here:

Rule 39-26-704-4 – Draft – Sales Tax Exemptions for Hotel Residents 9-24-20

Sales Tax Colorado, LLC Opinion:

The “Natural Person” language was also changed recently.  I believe this to have effectively removed the exemption from corporate accounts such as airlines, construction companies, etc. who rent hotel rooms for more than 30 days, but the particular employees “natural persons” change.  Removal of an exemption is a revenue increase and thus potentially subject to a required vote under T.A.B.O.R.

Sales tax is a tax imposed upon the transaction not necessarily upon persons.  The DOR’s change to “natural person” removes the exemption from companies renting hotel rooms(the transaction) by imposing the exemption from tax only upon a “natural person”.  It seems only an individual renting for 30 or more days can now get the exemption.

In a time when the hospitality industry is reeling from COVID 19, such further discouraging of corporate account room rentals should be reversed with or without a T.A.B.O.R. challenge.