Coloradans reject state sales tax hike

On November 6, 2018, Coloradans voted against raising the Colorado state sales tax rate from 2.9 to 3.52 percent.

The state sales tax hike proposed in Colorado Proposition 110 would have raised revenue for transportation projects. It was one of two measures seeking funds for transportation: Another measure, Proposition 109, would have allowed the state to borrow $3.5 billion. Had Propositions 109 and 110 both passed, only the one with the most votes would have taken effect. Both failed.

Proposition 109 (also known as the “Fix Our Damn Roads” initiative) would have provided $3.5 billion for state highway projects. Proposition 110 (the “Let’s Go Colorado” initiative) would have generated approximately $767 million in additional sales tax revenue in the first year alone and allowed the state to bond up to $6 billion to pay for state and local transportation projects, including improvements for transit, bicycles, and pedestrians (Colorado Department of Transportation).

With both propositions now dead, the Colorado Legislature will have to come up with other ways to fund needed improvements. There is talk of asking voters to approve $2.3 billion in bonds for transportation projects in November 2019.

New sales tax sourcing rules are set to take effect in Colorado for both in-state and out-of-state sellers on December 1, 2018. That same day, Colorado will start requiring many remote sellers to collect and remit sales tax. Learn more new remote sales tax laws in Colorado and other states.