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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0348.01 BJA SENATE BILL 98­101

STATE OF COLORADO

BY SENATOR Blickensderfer

FINANCE

A BILL FOR AN ACT

CONCERNING THE EXEMPTION OF CERTAIN RETAIL TRANSACTIONS FROM SALES AND USE TAXES.

Bill Summary

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

Effective July 1, 1998, exempts all sales and purchases of clothing and footwear from sales and use taxes. Repeals this exemption, effective July 1, 1999.

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

SECTION 1.  Legislative declaration.  (1)  The general assembly hereby finds, determines, and declares that:

(a)  Section 20 of article X of the state constitution, which was approved by the registered electors of this state in 1992, limits the annual growth of state fiscal year spending;

(b)  During the 1997­98 fiscal year, state revenues from sources not excluded from state fiscal year spending are expected to exceed the limitation on state fiscal year spending;

(c)  When revenues exceed the state fiscal year spending limitation for any given fiscal year, section 20 (7) (d) of article X of the state constitution requires that the excess revenues be refunded in the next fiscal year unless voters approve a revenue change allowing the state to keep the revenues;

(d)  In addition, section 20 (1) of article X of the state constitution states that refunds need not be proportional when prior payments are impractical to identify or return and authorizes the use of any reasonable method for refunding excess revenues;

(e)    It is the considered judgment of the general assembly that the state excess revenues for the 1997­98 fiscal year will be derived from a wide variety of state taxes and fees, including state sales tax, and should therefore be returned to as large a group of Colorado residents as feasible. The general assembly also considers that the return of at least a portion of the expected state excess revenues in the form of a short­term state sales tax relief on certain retail transactions is fair, reasonable, and the most cost­effective and cost­efficient way to return the excess in accordance with the state constitutional requirements.

SECTION 2.  39­26­114, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

39­26­114.  Exemptions ­ disputes ­ credits or refunds ­ repeal. (19)  (a)  EFFECTIVE JULY 1, 1998, ALL SALES AND PURCHASES OF CLOTHING AND FOOTWEAR SHALL BE EXEMPT FROM TAXATION UNDER THIS PART 1.

(b)  THIS SUBSECTION (19) IS REPEALED, EFFECTIVE JULY 1, 1999.

SECTION 3.  39­26­203 (1), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read:

39­26­203.  Exemptions ­ repeal. (1)  This part 2 is declared to be supplementary to the "Emergency Retail Sales Tax Law of 1935", part 1 of this article, and shall not apply:

(ff) (I)  EFFECTIVE JULY 1, 1998, TO THE STORAGE, USE, OR CONSUMPTION OF CLOTHING AND FOOTWEAR EXEMPT FROM SALES TAX BY SECTION 39­26­114 (19).

(II)  THIS PARAGRAPH (ff) IS REPEALED, EFFECTIVE JULY 1, 1999.

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.