Colorado announces temporary tax break for bars and restaurants |

Colorado announces temporary tax break for bars and restaurants

Governor issues order, with legislature expected to act next week

Colorado bars and eateries that have been ordered to limit their capacity are getting a temporary tax break from the state at a time of profound challenge and uncertainty for the industry.

Gov. Jared Polis announced Wednesday that via executive order he has suspended collection of the 2.9% sales tax that businesses must typically return to the government. That means businesses affected by the executive order — bars, restaurants and food trucks — can hang onto an extra $2.90 per $100 in revenue.

“Colorado’s restaurants, bars, and food trucks are among the small businesses that have been hit the hardest by the pandemic,” Polis said in a statement. “We all want to keep these businesses open as a vital part of our lives and culture, which is why I’m proud to be working with a group of bipartisan legislators to provide much needed tax relief.”

The governor has the authority to suspend collection of the taxes, but only temporarily. The legislature has the authority to actually forgive the obligation to return these revenues to the state — and it plans to do just that when it convenes next week for a special session on COVID-19 relief. Among a slew of stimulus policies the General Assembly is expected to adopt is a forgiveness of sales tax obligations up to $2,000 per month for affected businesses through at least February.

“The intent of the executive order is to give advance notice to bars and restaurants now about extending the November collections deadline, ahead of the special legislative session,” the governor’s office stated in a press release.


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