First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
REVISED
This Version Includes All Amendments Adopted
on Second Reading in the Second House
LLS NO. 25-0196.01 Jed Franklin x5484
SENATE BILL 25-046
Senate Committees House Committees
Finance Finance
A BILL FOR AN ACT
C
ONCERNING LOCAL GOVERNMENT SALES OR USE TAX101
INVESTIGATIONS, AND, IN CONNECTION THEREWITH ,102
ESTABLISHING UNIFORM CONFIDENTIALITY STANDARDS FOR THE103
PROTECTION OF TAXPAYER INFORMATION .104
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/
.)
Sales and Use Tax Simplification Task Force. Section 1 of the
bill establishes uniform confidentiality standards for the protection of
taxpayer information used or obtained in connection with a sales or use
HOUSE
2nd Reading Unamended
February 28, 2025
SENATE
3rd Reading Unamended
February 3, 2025
SENATE
Amended 2nd Reading
January 31, 2025
SENATE SPONSORSHIP
Bridges and Kipp, Amabile, Coleman, Cutter, Exum, Jaquez Lewis, Jodeh, Michaelson
Jenet, Snyder
HOUSE SPONSORSHIP
Taggart,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. tax investigation performed by a third-party auditor on behalf of a local
taxing jurisdiction. Third-party auditors are generally prohibited from
divulging or making known in any way to any person information that is
obtained from a sales or use tax investigation on behalf of a local taxing
jurisdiction or disclosed in any document, report, or return filed in
connection with local sales or use taxes. Third-party auditors are
permitted to disclose taxpayer information in certain limited
circumstances, including disclosure to:
! An official, employee, hearing officer, attorney, or other
public agent of the local taxing jurisdiction who is
authorized to receive such information in connection with
the local taxing jurisdiction's sales or use tax investigation
performed by the third-party auditor;
! A requesting taxpayer, or the taxpayer's authorized agent,
of the taxpayer's own tax filings;
! The department of revenue (department) for purposes of
statistical analysis and publication as authorized by current
law; and
! The department and the federal internal revenue service as
necessary and pertinent to a taxpayer's compliance or
failure to comply with state or federal tax law.
Violation of the confidentiality provisions in section 1 is a misdemeanor
punishable by a fine of not more than $1,000 per violation.
Section 2 clarifies the authority of the executive director of the
department to share taxpayer information with statutory local
governments, special districts, and requesting home rule jurisdictions as
necessary to facilitate dispute resolution, coordination, intergovernmental
agreements, and information sharing between the department and such
local governments consistent with current law, which prohibits the
disclosure of any such shared information to any third party.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 29-2-217 as2
follows:3
29-2-217. Local taxing jurisdictions sales or use tax4
investigations - confidentiality requirements - limitations -5
enforcement - definitions. (1) A
S USED IN THIS SECTION, UNLESS THE6
CONTEXT OTHERWISE REQUIRES :7
(a) "L
OCAL TAXING JURISDICTION" HAS THE SAME MEANING AS SET8
046-2- FORTH IN SECTION 39-26-802.7 (1)(b) AND INCLUDES A:1
(I) S
TATUTORY LOCAL GOVERNMENT ;2
(II) S
PECIAL DISTRICT;3
(III) R
EQUESTING HOME RULE JURISDICTION ; AND4
(IV) S
ELF-COLLECTING HOME RULE JURISDICTION .5
(b) "S
ALES OR USE TAX" INCLUDES ALL LOCAL SALES OR USE6
TAXES AND ALL TAXES DESCRIBED IN SECTION 29-2-201 (8).7
(c) "S
ELF-COLLECTING HOME RULE JURISDICTION " MEANS A HOME8
RULE JURISDICTION THAT IS NOT A REQUESTING HOME RULE JURISDICTION .9
(d) "T
AXPAYER" HAS THE SAME MEANING AS SET FORTH IN10
SECTION 39-21-101 (4). "TAXPAYER" INCLUDES A "RETAILER" OR11
"
VENDOR" AS DEFINED IN SECTION 39-26-102 (8).12
(e) (I)
"THIRD-PARTY AUDITOR" MEANS A PRIVATE INDIVIDUAL OR13
ENTITY THAT IS NOT AN OFFICIAL , EMPLOYEE, HEARING OFFICER, OR14
ATTORNEY, OR OTHERWISE A PUBLIC AGENT OF A LOCAL TAXING15
JURISDICTION, THAT CONDUCTS A SALES OR USE TAX INVESTIGATION OF A16
TAXPAYER ON BEHALF OF A LOCAL TAXING JURISDICTION .17
(II) F
OR PURPOSES OF THIS SUBSECTION (1)(e), "PUBLIC AGENT OF
18
A LOCAL TAXING JURISDICTION" INCLUDES:19
(A) A
N OFFICIAL, EMPLOYEE, OR AGENT OF THE DEPARTMENT OF
20
REVENUE WHO CONDUCTS A SALES OR USE TAX INVESTIGATION OF A21
TAXPAYER ON BEHALF OF A LOCAL TAXING JURISDICTION IN ACCORDANCE22
WITH THIS PART 2 AND ARTICLE 21 OF TITLE 39; AND23
(B) A
N OFFICIAL, EMPLOYEE, OR AGENT OF THE MULTISTATE TAX
24
COMMISSION, ESTABLISHED IN SECTION 24-60-1301, WHO CONDUCTS A25
SALES OR USE TAX INVESTIGATION OF A TAXPAYER ON BEHALF OF A LOCAL26
TAXING JURISDICTION PURSUANT TO SECTION 24-60-1306, AND IN27
046
-3- ACCORDANCE WITH THE MULTISTATE TAX COMPACT , SET FORTH IN PART1
13
OF ARTICLE 60 OF TITLE 24.
2
(2) (a) E
XCEPT IN ACCORDANCE WITH A JUDICIAL ORDER OR AS3
OTHERWISE PROVIDED IN SUBSECTIONS (2)(b)(I) TO (2)(b)(IV) OR (3) OF4
THIS SECTION, A THIRD-PARTY AUDITOR SHALL NOT DIVULGE OR MAKE5
KNOWN IN ANY WAY ANY INFORMATION OBTAINED FROM A SALES OR USE6
TAX INVESTIGATION CONDUCTED BY THE THIRD -PARTY AUDITOR ON7
BEHALF OF A LOCAL TAXING JURISDICTION , OR DISCLOSED IN ANY8
DOCUMENT, REPORT, OR RETURN FILED IN CONNECTION WITH ANY OF THE9
TAXES OR FEES WITHIN THE SCOPE OF THIS PART 2. A THIRD-PARTY10
AUDITOR CHARGED WITH THE CUSTODY OF SUCH INVESTIGATORY11
INFORMATION, DOCUMENTS, REPORTS, AND RETURNS SHALL NOT BE12
REQUIRED TO PRODUCE ANY SUCH INFORMATION OR DOCUMENTATION IN13
ANY ACTION OR PROCEEDING IN ANY COURT EXCEPT IN AN ACTION OR14
PROCEEDING UNDER THE PROVISIONS OF THIS PART 2 OR PART 3 OF THIS15
ARTICLE 2 TO WHICH THE LOCAL TAXING JURISDICTION AUTHORIZING THE16
SALES OR USE TAX INVESTIGATION IS A PARTY , IN WHICH EVENT THE17
COURT MAY REQUIRE THE PRODUCTION OF , AND MAY ADMIT IN EVIDENCE,18
SO MUCH OF THE INFORMATION AND DOCUMENTATION AS IS PERTINENT TO19
THE ACTION OR PROCEEDING.20
(b) N
OTWITHSTANDING SUBSECTION (2)(a) OF THIS SECTION, A21
THIRD-PARTY AUDITOR MAY:22
(I) D
ISCLOSE THE CONTENTS OF ANY REPORT PREPARED BY THE23
THIRD-PARTY AUDITOR, AND ANY INFORMATION, DOCUMENTS, REPORTS,24
AND RETURNS RELIED UPON IN PREPARING THE REPORT , TO AN OFFICIAL,25
EMPLOYEE, HEARING OFFICER, ATTORNEY, OR OTHER PUBLIC AGENT OF26
THE LOCAL TAXING JURISDICTION AUTHORIZED TO RECEIVE SUCH27
046
-4- INFORMATION IN CONNECTION WITH THE LOCAL TAXING JURISDICTION 'S1
SALES OR USE TAX INVESTIGATION PERFORMED BY THE THIRD -PARTY2
AUDITOR;3
(II) D
ELIVER TO A TAXPAYER OR THE TAXPAYER 'S DULY4
AUTHORIZED REPRESENTATIVE A COPY OF ANY RETURN OR REPORT FILED5
IN CONNECTION WITH THE TAXPAYER 'S TAXES OR FEES WITHIN THE SCOPE6
OF THIS PART 2;7
(III) P
ROVIDE INFORMATION TO THE DEPARTMENT FOR THE8
PUBLICATION BY THE DEPARTMENT OF STATISTICS IN ACCORDANCE WITH9
SECTION 39-21-113 (5); AND10
(IV) P
ROVIDE INFORMATION TO THE DEPARTMENT AND THE11
FEDERAL INTERNAL REVENUE SERVICE AS NECESSARY AND PERTINENT TO12
A TAXPAYER'S COMPLIANCE OR FAILURE TO COMPLY WITH STATE OR13
FEDERAL TAX LAW.14
(3) A
TAXPAYER WHO FILED A DOCUMENT , REPORT, OR RETURN15
WITH THE STATE OR A LOCAL TAXING JURISDICTION MAY WAIVE THE16
CONFIDENTIALITY PROTECTIONS SET FORTH IN SUBSECTION (2)(a) OF THIS17
SECTION AS TO SUCH DOCUMENT , REPORT, OR RETURN. SUCH WAIVER18
MUST BE VOLUNTARY, IN WRITING, AND SIGNED BY THE TAXPAYER OR THE19
TAXPAYER'S DULY AUTHORIZED REPRESENTATIVE .20
(4) A
NY THIRD-PARTY AUDITOR, INCLUDING ANY OFFICIAL ,21
EMPLOYEE, ATTORNEY, OR OTHER AGENT OF A THIRD-PARTY AUDITOR,22
WHO WILLFULLY VIOLATES ANY OF THE PROVISIONS OF THIS SECTION IS23
GUILTY OF A MISDEMEANOR AND , UPON CONVICTION THEREOF, SHALL BE24
PUNISHED BY A FINE OF NOT MORE THAN ONE THOUSAND DOLLARS PER25
VIOLATION.26
SECTION 2. In Colorado Revised Statutes, 39-21-113, amend27
046
-5- as it will become effective July 1, 2025, (35) as follows:1
39-21-113. Reports and returns - rule - repeal.2
(35) Notwithstanding the confidentiality requirements in this section, the3
executive director has the authority to share taxpayer information as4
necessary pursuant to section 29-2-208 SECTIONS 29-2-208 AND 29-2-2135
TO 29-2-215.6
SECTION 3. Effective date. This act takes effect July 1, 2025.7
SECTION 4. Safety clause. The general assembly finds,8
determines, and declares that this act is necessary for the immediate9
preservation of the public peace, health, or safety or for appropriations for10
the support and maintenance of the departments of the state and state11
institutions.12
046
-6-