First Regular Session

Sixty-first General Assembly

LLS NO. 97­0531.01D MKD HOUSE BILL 97­1196

STATE OF COLORADO

BY REPRESENTATIVE Kaufman.

ENGROSSED

FINANCE

A BILL FOR AN ACT

CONCERNING ELECTRONIC FILING REQUIREMENTS RELATING TO AMOUNTS DEDUCTED AND WITHHELD FROM WAGES OF EMPLOYEES FOR STATE INCOME TAX PURPOSES.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Allows the executive director of the department of revenue to require any taxpayer who is required to remit withheld federal income tax by electronic funds transfer to remit withheld Colorado income tax by electronic funds transfer.

Changes the due date for annual statements by employers concerning state income taxes withheld for employees to conform with the due date for similar federal statements. Allows the executive director of the department of revenue to require a magnetic media taxpayer to file withholding tax statements by magnetic media or in other machine­readable form. Defines "magnetic media taxpayer".

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  39­22­604 (2), Colorado Revised Statutes, 1994 Repl. Vol., is amended BY THE ADDITION OF A NEW PARAGRAPH to read:

39­22­604.  Withholding tax ­ requirement to withhold ­ tax lien ­ exemption from lien. (2)  Definitions: As used in this section, unless the context otherwise requires:

(b.5)  "MAGNETIC MEDIA TAXPAYER" MEANS A TAXPAYER WHO IS REQUIRED TO FILE INFORMATION RETURNS DESCRIBED IN SECTION 6051 (d) OF THE INTERNAL REVENUE CODE BY MAGNETIC MEDIA OR IN OTHER MACHINE­READABLE FORM UNDER SECTION 6011 (e) OF THE INTERNAL REVENUE CODE.

SECTION 2.  39­22­604 (4) (a) and (6), Colorado Revised Statutes, 1994 Repl. Vol., are amended to read:

39­22­604.  Withholding tax ­ requirement to withhold ­ tax lien ­ exemption from lien. (4) (a)  The executive director may require any taxpayer who has an annual estimated withheld tax liability of more than fifty thousand dollars IS REQUIRED TO REMIT WITHHELD FEDERAL INCOME TAX BY ELECTRONIC FUNDS TRANSFER UNDER SECTION 6302 (h) OF THE INTERNAL REVENUE CODE to remit withheld COLORADO INCOME tax by electronic funds transfer. The executive director shall promulgate rules and regulations prescribing withholding tax periods and the corresponding tax return filing and tax payment due dates. The executive director shall consult with the state treasurer regarding the formulation of such rules and regulations in order to minimize the amount of lost interest to the state general fund.

(6) (a)  Every employer shall, in accordance with such regulations RULES as shall be prescribed by the department of revenue, provide each employee with a statement of the amounts of moneys deducted and withheld from such employee's wages in accordance with the provisions of this section. Every employer shall also make an annual statement for each employee to the department of revenue, on such forms as are provided or approved by the department, a copy of which shall be provided each employee, summarizing the total compensation paid and the tax withheld for such employee during the preceding calendar year or any portion thereof, and the said annual statement shall be filed on or before March 15 of the year following that for which the report is made. No employer shall be required to make such annual statements to the department of revenue on magnetic tape; however, any employer may voluntarily choose to make such annual statements on magnetic tape. THE DATE ESTABLISHED PURSUANT TO SECTION 6071 OF THE INTERNAL REVENUE CODE FOR FILING SIMILAR FEDERAL STATEMENTS. Failure to file the statements within the time prescribed therefor, unless shown to have been due to reasonable cause, or the willful filing or furnishing of false or fraudulent statements shall subject the employer to a penalty, at the discretion of the executive director, of not less than five dollars nor more than fifty dollars, which shall be in addition to any criminal penalty otherwise provided for failure to file a return or for filing a false or fraudulent return.

(b)  THE EXECUTIVE DIRECTOR MAY REQUIRE ANY MAGNETIC MEDIA TAXPAYER TO FILE THE ANNUAL STATEMENTS DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (6) BY MAGNETIC MEDIA OR IN OTHER MACHINE­READABLE FORM. THE EXECUTIVE DIRECTOR SHALL PROMULGATE RULES REGARDING REQUIREMENTS FOR MAGNETIC MEDIA FILINGS OR FILINGS IN ANY OTHER MACHINE­READABLE FORM.

SECTION 3.  Effective date ­ applicability.  This act shall take effect upon passage and shall apply to filings and remittances made on or after July 1, 1998.

SECTION 4.  Safety clause.  The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.