First Extraordinary Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06B-2031.01 Jason Gelender HOUSE BILL 06S-1016 HOUSE SPONSORSHIP Kerr J., and Harvey SENATE SPONSORSHIP (None), House Committees Senate Committees Business Affairs and Labor A BILL FOR AN ACT Concerning a requirement that a person withhold Colorado income tax from a payment to a person other than an employee for services performed. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Requires a person that pays another person for services performed and reports that payment on internal revenue service form 1099-MISC to deduct and withhold state income tax at the rate of 4.63% if the person who performed the services fails to provide a correct taxpayer identification number. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 39-22-604, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read: 39-22-604. Withholding tax - requirement to withhold - tax lien - exemption from lien. (18) (a) Any person who makes a payment to another person for services performed and reports that payment on internal revenue service form 1099-MISC shall deduct and withhold state income tax at the rate of four and sixty-three one-hundredths percent if the person who performed the services fails to provide a correct taxpayer identification number. (b) For purposes of all other provisions of this section, excluding paragraph (a) of subsection (3) of this section, a person who deducts and withholds state income tax from a person who performs services pursuant to the provisions of this subsection (18) shall be treated as an employer withholding and deducting wages from an employee, and such other provisions of this section shall apply accordingly. This paragraph (b) shall not be construed as making the person who performed the services an employee of the person who deducts and withholds state income tax for any other purpose in law. SECTION 2. Effective date - applicability. (1) This act shall take effect January 1, 2007. (2) However, if a referendum petition is filed against this act or an item, section, or part of this act during the 90-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution, then the act, item, section, or part, shall not take effect unless approved by the people at a biennial regular general election and shall take effect on the date specified in subsection (1) or on the date of the official declaration of the vote thereon by proclamation of the governor, whichever is later. (3) The provisions of this act shall apply to services performed on or after the applicable effective date of this act.