When last I left you, I had just laid my head down in the RV after a delightful dinner in Santa Fe, New Mexico. Up early the next morning, I steer southwest down Interstate 24 to Highway 550 to begin the trek North-northwest toward Durango, Colorado.
There is a lot of scenic New Mexico to take-in along the way, but this week’s feature is about an area of Colorado, that perhaps you have never seen or heard of before. I mean most people know about Denver, and they know of Golden, and they know of the Vail and Breckenridge Ski Areas, and of course they know all about Colorado Springs and Pikes Peak. So that’s why we are not going to visit any of those places this week.
Back in 2015, our Sales Tax Tuesday article on Colorado featured a lot of talk about both ‘the Unsinkable Molly Brown’ and what was then the fairly rare legal status of marijuana sales. While the celebrity status of Molly Brown has continued to dwindle over the intervening few years, numerous other states have jumped on the legalize and tax marijuana sales band wagon that Colorado was enjoying at that time. So, we really won’t be focusing on those things this trip.
But since I mentioned Sales Tax Tuesday, this is a good opportunity to remind you that this is one article in a series covering sales and use tax issues associated with each and every state tax jurisdiction in the United States. Insightful Accountant, in conjunction with Avalara, the 'tax people,' has been publishing one of these features every Tuesday since the start of 2018; however, with numerous ‘breaking news’ events this year as a result of court decisions or state legislative enactments which we felt were of sufficient importance to advise you, we find that we will be well into 2019 before this series concludes.
At this time of year, winter is close, and just not far away at all… it could be here in a few hours, or overnight, you just never know. Some grass is green, mostly the weeds, and much is brown having gone through several freezes. The mountains already have some heavy snowfalls and the resort owners are wishing that the snows will just come on and turn give them the business that will ‘make their year’. I mean, see what a different just a few hours can make in Colorado weather.
Durango is a place off the beaten path, although it has been honored by Ski Magazine as one of Americas Top 10 Ski Towns in the Winter Months despite being much more difficult to get to than the big Colorado resort towns west of Denver. This is a place that still has an Old West charm, and if you have been reading my Sales Tax Tuesday series this year you know that I have put a lot of emphasis on ‘the old west’… maybe I am trying to reclaim my days as a gunslinger in a past life or something like that.
The mountains of Durango could tell stories ranging from the days of old when Ancestral Puebloans were attracted to these mountains and made their homes in the Mesa Verde until disappearing in the 1300s. The Ute Indians then took shelter in the abandoned dwellings until 1860 when gold was discovered in the San Juan Mountains. Miners, farmers and prospectors were drawn by the promise of silver and gold, and the Denver and Rio Grande Railroad was born to serve the mining industry.
Mesa Verde is a National Park, and there is also the adjoining Canyons of the Ancients National Monument; both of which are adjacent to the Ute Mountain Indian Reservation just west of Durango.
Durango was born on the banks of the Animas River in 1880 as the railhead for the new line. The train soon began carrying passengers to see the spectacular mountain canyons and peaks. Not long thereafter Durango had more than 2000 new residents and 134 new businesses including the Strater Hotel, the finest Victorian building in town. The Hermosa House at Trimble Hot Springs was built, and Durango soon became the gateway to the Southwest.
Since its beginning as a town, Durango has gone through many ups and downs but has always survived. And, it’s a very special place no matter what time of the year you are here.
Of course, one of the reasons I like Durango is fishing, I could easily write an entire story on just fishing in Colorado, and probably on fishing in Durango (just like fishing in Arkansas and Fishing in Flipping). From the waters of the Animas to the tail waters of the San Juan, along with Vallecito Lake offer up great ‘trout fishing’ opportunities. Of course, each experience is a little different so you will want to take in each of them to give the various options a try. Now you can’t tell me that catching a trout like this one doesn’t appeal ‘to the gunslinger in you?’
Like any resort town there are a lot of ‘those places’ where people who have come into town to do the resort thing are going to go, and don’t get me wrong, a lot of them have really good food but many of them are ‘pricey.’ On the other hand, there are some places in town that have some really good food and that have been here as long time has existed and are where everyone in town eats. One of them is 'College Café' which has been here since 1939 in a gas station since there were hardly enough cars in town to need a gas station… maybe that’s why they converted the gas station into a café. Well, now it’s time for just a little breakfast to get me started for another day of fishing.
Oh, sure the people standing over the grill have changed, there aren’t going to be too many café cooks still cooking in a place that long, but I’m not sure the ‘Angle biscuit recipe’ hasn't changed… I think an Angle flies over the café every morning and drops the biscuits off for the day so they can be served with the made-to-order breakfast. You could eat at this place every morning for about three weeks in a row and still not have tried all the combinations of Omelets, Egg Benedict, and Scrambles they offer (one of which is called ‘a Murphy’… check that out). They also serve a variety of sandwiches, burgers and some specials, but really in my way of thinking ‘breakfast is their thing' from 6:30am to 2pm seven days a week.
I’m not going to make you jealous with another massive trout on the end of my line, so I will just say that when dinner time comes, after another rewarding day of casting out my line, I am heading over to 'Ken & Sue's' a casual, but upscale restaurant in Durango. As I said earlier, there are a lot of upscale places in this town that cater to the tourist crowd especially resort guests, but this place brings in both locals and those taking in what Durango has to offer. This place has a down to earth comfortable atmosphere that is fine by me, I mean I’m not going to wear my fishing-waders into the place, but I don’t feel bad wearing a flannel shirt into here either (even if it might smell a bit 'fishy'). For dinner tonight, I am rewarding myself with a prime filet.
Doesn't it look yummy? (Makes me really glad this is a 'business expense,' you know 'author's research'!)
So it's the end of supper and time to pay the bill, and while I avoided the topic of sales tax earlier today when I had breakfast, I guess I can’t avoid it any longer. The reality is that the combined sales tax rate for Durango, Colorado is 7.9%. This is the total of state, county and city sales tax rates. The Colorado state sales tax rate is currently 2.9%. The La Plata County sales tax rate is 2%. Durango sales tax rate is 3%.
Non-essential food items are subject to taxation, but sales of food sold through vending machines are exempt from Colorado sales tax with the exception of sales of hot or cold beverages in unsealed containers dispensed by vending machines which are subject to sales taxes. As if that isn’t confusing. Can I please just have a simple list of when I pay sales tax and when I don't on what I eat?
So if I catch the trout and cook it myself, I pay sales tax on the corn meal breading, but if I ask the restaurant to cook it and they charge me a surcharge, then I pay sales tax on the whole thing? What's that all about?
By the way, I am also paying sales taxes on my RV spot at the campground because short-term rental owners must collect sales tax on rentals of less than 30 consecutive days. This applies to bed and breakfasts, campsites, condominiums, hotels, inns, motels and lodging time shares.
Sales Tax Facts
- The state sales tax rate is currently 2.9% but the total tax rate can be as high as 11.2% depending on local municipalities.
- Effective January 1, 2019 there will be a number of new Sales Tax rates, the new rates can be found at this official Colorado Department of Revenue Taxation Division website.
- Several key changes were implemented during late 2018 regarding Colorado sales tax with a December 1, 2018 compliance date and a grace period of May 31, 2019. Key facts regarding these changes can be found at this official Colorado Department of Revenue Taxation Division website.
- Colorado is a home rule state, which means that cities, counties, local municipalities and special districts can collect their own taxes and make their own regulations concerning sales tax.
- Colorado has more than 300 taxing jurisdictions, so local-level tax rates in the state of Colorado are quite complex compared against local-level tax rates in other states.
- Companies doing business in Colorado need to register with the Colorado Department of Revenue. Some municipalities also require registration for the purposes of collecting sales tax. According to the Colorado Department of Revenue, all businesses must be using a number known as the new Colorado Account Number, which is eight digits.
- In addition, a number of municipalities require registration for the purposes of collecting sales tax.
- Sales tax in Colorado is destination-based, meaning the rate is determined by the state rate of where the item is shipped to (the buyer’s location). This means sellers must know the exact current sales tax rate for every shipment they send to a purchaser.
- Colorado residents owe use tax when they purchase taxable goods for use or storage in Colorado without paying sales tax. This most frequently occurs when buying from a remote vendor not required to collect Colorado sales tax because of a lack of nexus with the state.
- Colorado is not a Streamlined Sales Tax (SST) state.
- Colorado has no sales tax holidays.
Sales tax provides critical revenue for states, and that certainly is true in Colorado. What's worse, the complexity of Colorado sales tax, with the number of taxing jurisdictions, and the fact that home rule permits each of them to make their own rules, means that it is all the more difficult to keep track of what tax requirements are in place where. Therefore, it’s easier than ever to be lured into a false sense of compliance when it comes to sales tax.
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