HomeMy WebLinkAboutordinance.council.19-2023ORDINANCE NO. #19
SERIES OF 2023
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO9
AMENDING TITLE 23 OF THE ASPEN MUNICIPAL CODE TO AMEND AND ADD
DEFINITIONS AND INCLUDE NEW PROVISIONS TO INCLUDE AND FACILIATE
TAXATION ON REMOTE SALES INTO THE CITY.
WHEREAS, the City of Aspen, Colorado, (the "City"), is a home rule municipality,
organized and existing under Article XX, Section 6 of the Colorado Constitution; and
WHEREAS, pursuant to Article XX, Section 6 of the Colorado Constitution, the right to
enact, administer and enforce sales taxes is clearly within the constitutional grant of power to the
City and is necessary to raise revenue with which to conduct the affairs and render the services
performed by the City; and
WHEREAS, pursuant to such authority, the City has adopted and enacted a Taxation
Code (the "Code"), under which City sales tax is levied on all sales and purchases of tangible
personal property or taxable services at retail unless prohibited, as applicable to the provision of
this Ordinance, under the Constitution or laws of the United States; and
WHEREAS, the United States Supreme Court in South Dakota v. Wayfaij�, 138 S.Ct.
2080 (2018), overturned prior precedent and held that a State is not prohibited by the Commerce
Clause from requiring a retailer to collect sales tax based solely on the fact that such retailer does
not have a physical presence in the State ("remote sales"); and
WHEREAS, based upon the South Dakota v. Wayfai� case, the City of Aspen seeks to
amend the City's Code to impose sales and use tax on sales regardless of whether the sale or
service is made at the retailer's location in the City or delivered to the customer at a location
within the City; and,
WHEREAS, the delivery of tangible personal property, products, or services into the
City relies on and burdens local transportation systems, emergency and police services, waste
disposal, utilities and other infrastructure and services; and
WHEREAS, the failure to tax remote sales creates incentives for businesses to avoid a
physical presence in the State and its respective communities, resulting in fewer j obs and
increasing the share of taxes to those consumers who buy from competitors with a physical
presence in the State and its municipalities; and
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WHEREAS, it is appropriate for Colorado municipalities to adopt uniform definitions
within their sales tax codes to encompass marketplace facilitators, marketplace sellers, and
multichannel sellers that do not have a physical presence in the municipality, but that still have a
taxable connection with the municipality ; and
WHEREAS, the goal of adopting this ordinance is to join in on the simplification efforts
of all the self-collecting home rule municipalities in Colorado; and
WHEREAS, this ordinance provides a safe harbor to those who transact limited sales
within the City; and
WHEREAS, absent such amendment, the continued failure of retailers to voluntarily
apply and remit sales tax owed on remote sales exposes the municipality to unremitted taxes and
permits an inequitable exception that prevents market participants from competing on an even
playing field; and
WHEREAS, the City adopts this ordinance with the intent to address tax administration,
and, in connection with, establish economic nexus for retailers or vendors without physical
presence in the City and require the retailer or vendor to collect and remit sales tax for all sales,
including remote sales, made within the City, and.
WHEREAS, the City has adopted Ordinance No. 09 (series of 2022) which established
the process for obtaining a permit to operate short-term rentals within the City, and Vacation
Rental Regulations governing all properties with short-term rental permits within the City, that
require the owner of a property issued a short-term rental permit to obtain a business license and
remit sales tax on all short-term rental sales; and
WHEREAS, short-term rental sales shall not be considered remote sales or marketplace
sales, despite the fact that a marketplace facilitator may facilitate such short-term rentals and
collect short-term rental sales and fees; and
WHEREAS, the Aspen City Council finds that this Ordinance furthers and is necessary
for the promotion of public health, safety and welfare.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
ASPEN, COLORADO:
Section 1: Certain definitions in Section 23.04.010 of the City of Aspen Municipal Code are
hereby amended as follows:
The term Engaged in Business in the City shall be amended to add an additional subsection (e)
and (f) shall read as follows.
Engaged in Business in the City means performing or providing services or
selling, leasing, renting, delivering or installing tangible personal property,
products, or services for storage, use or consumption, within the City. This term
includes, but is not limited to, any one of the following activities by a person: (a)
Directly, indirectly, or by a subsidiary maintains a building, store, office,
salesroom, warehouse, or other place of business within the taxing jurisdiction;
(b) Sends one or more employees, agents or commissioned sales persons into the
taxing jurisdiction to solicit business or to install, assemble, repair, service, or
assist in the use of its products, or for demonstration or other reasons; (c)
Maintains one or more employees, agents or commissioned sales persons on duty
at a location within the taxing jurisdiction; (d) Owns, leases, rents or otherwise
exercises control over real or personal property within the taxing jurisdiction; or
(e) is a retailer or vendor in the state of Colorado that makes more than one
delivery into the taxing jurisdiction within a twelve month period; or (f) makes
retail sales sufficient to meet the definitional requirements of economic nexus as
set forth in 23.04.010.
The term RetaileN shall be amended to define both the term Retailer and Vendor and add an
additional section (e), and shall be amended to read as follows:
Retailer o� Vendor means any person selling, leasing, renting, or granting a license
to use tangible personal property or services at retail. The terms "retailer" shall
include, but is not limited to, any.
(a) Auctioneer;
(b) Salesperson, representative, peddler or canvasser, who makes sales as a direct
or indirect agent of or obtains such property or services sold from a dealer,
distributor, supervisor or employer;
(c) Charitable organization or governmental entity which makes sales of tangible
personal property to the public, notwithstanding the fact that the merchandise sold
may have been acquired by gift or donation or that the proceeds are to be used for
charitable or governmental purposes;
(d) Retailer -contractor, when acting in the capacity of a seller of building supplies,
construction. materials, and other tangible personal property;
(e) Marketplace facilitator, marketplace seller, or multichannel seller.
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Section 2: Section 23.04.010 of the Aspen Municipal Code is hereby amended to include the
following new definitions:
Economic Nexus means the connection between the City and a person not having a
physical nexus in the State of Colorado, which connection is established when the person
or marketplace facilitator makes retail sales into the City, and:
(a) In the previous calendar year, the person, which includes a marketplace facilitator,
has made retail sales into the state exceeding the amount specified in Colorado
Revised Statutes ("C.R.S.") § 39-26402(3)(c), as amended; or
(b) In the current calendar year, 90 days has passed following the month in which the
person, which includes a marketplace facilitator, has made retail sales into the state
exceeding the amount specified in C.R.S. § 39-26-102(3)(c), as amended.
This definition does not apply to any person who is doing business in this state but
otherwise applies to any other person.
Marketplace means a physical or electronic forum, including, but not limited to, a store, a
booth, an internet website, a catalog, or a dedicated sales software application, where
tangible personal property, taxable products, or taxable services are offered for sale.
Mai°ketplace Facilitator means a person who:
(a) (1) Contracts with a marketplace seller or multichannel seller to facilitate
for consideration, regardless of whether or not the consideration is deducted as
fees from the transaction, the sale of the marketplace seller's tangible personal
property, products, or services through the person's marketplace,$
(2) Engages directly or indirectly, through one or more affiliated persons,
in transmitting or otherwise communicating the offer or acceptance between a
purchaser and the marketplace seller or multichannel seller; and
(3) Either directly or indirectly, through agreements or arrangements with
third parties, collects payment from the purchaser on behalf of the seller.
(b) "Marketplace Facilitator" does not include:
(1) a marketplace facilitator, marketplace seller or multichannel seller that
offers or facilitates the advertising, booking, or collection of sales and fees for
short-term rentals subject to the permit requirements of Chapter 26.530 of the
City of Aspen Municipal Code;
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(2) A person that exclusively provides internet advertising services or lists
products for sale, and that does not otherwise meet this definition.
Marketplace Seller means a person, regardless of whether or not the person is engaged in
business in the city, which has an agreement with a marketplace facilitator and offers for
sale tangible personal property, products, or services through a marketplace owned,
operated, or controlled by a marketplace facilitator.
Multichannel Seller means a retailer that offers for sale tangible personal property,
commodities, or services through a marketplace owned, operated, or controlled by a
marketplace facilitator, and through other means.
Section 3: Section 23.32.120 of the Code is hereby repealed and replaced with the following:
23.32.120 -Marketplace Sales
(a) Requirements of Marketplace Facilitators:
(1) A marketplace facilitator engaged in business in the city is required to collect
and remit sales tax on all taxable sales made by the marketplace facilitator, or
facilitated by it for marketplace sellers or multichannel sellers to customers in the
city, whether or not the marketplace seller for whom sales are facilitated would
have been required to collect sales tax had the sale not been facilitated by the
marketplace facilitator.
(2) A marketplace facilitator shall assume all the duties, responsibilities, and
liabilities of a retailer or vendor. ]. Marketplace facilitators shall be liable for the
taxes collected from marketplace sellers or multichannel sellers. The City may
recover any unpaid taxes, penalties, and interest from the marketplace facilitator
that is responsible for collecting on behalf of marketplace sellers or multichannel
sellers.
(3) The liabilities, obligations, and rights set forth under this section are in addition
to any duties and responsibilities of the marketplace facilitator has under this title
if it also offers for sale tangible personal property, products, or services through
other means.
(4) A marketplace seller, with respect to sales of tangible personal property,
products, or services made in or through a marketplace facilitator's marketplace,
does not have the liabilities, obligations, or rights of a retailer under this article if
the marketplace seller can show that such sale was facilitated by a marketplace
facilitator:
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a. With whom the marketplace seller has a contract that explicitly
provides that the marketplace facilitator will collect and remit sales tax on
alI sales subject to tax under this article; or
b. From whom the marketplace seller requested and received in good
faith a certification that the marketplace facilitator is registered to collect
sales tax and will collect sales tax on all sales subject to tax under this
article made in or through the marketplace facilitator's marketplace.
(5) If a marketplace seller makes a sale that is not facilitated by a licensed
marketplace facilitator in a marketplace, the marketplace seller is subject to all of
the same licensing, collection, remittance, filing and recordkeeping requirements
as any other retailer.
(b) This section does not apply to marketplace facilitators that provide short-term rental
booking services and collect short-term rental sales and fees. Short-term rental taxes shall be
collected and remitted by the "Person or business issued an STR Permit pursuant to Chapter
23.54 of this Code.
(c) Auditing. With respect to any sale, the city shall solely audit the marketplace facilitator for
sales made by marketplace sellers or multichannel sellers but facilitated by the marketplace.
The city will not audit or otherwise assess tax against marketplace sellers or multichannel
sellers for sales facilitated by a marketplace facilitator.
Section 4: No obligation to collect the sales and use tax required by this article may be applied
retroactively. Responsibilities, duties and liabilities described in Section 4 of a marketplace
facilitator, marketplace seller, or multichannel seller begin upon the earlier of when they became
licensed to collect the city's sales tax or when they became legally obligated to collect the city's
sales tax under Section 3.
Section 5:
Any scrivener's errors contained in the code amendments herein, including but not limited to
mislabeled subsections or titles, may be corrected administratively following adoption of the
Ordinance.
Section 6•
This ordinance shall not affect any existing litigation and shall not operate as an abatement of any
action or proceeding now pending under or by virtue of the resolutions or ordinances repealed or
amended as herein provided, and the same shall be conducted and concluded under such prior
resolutions or ordinances.
Section 7:
If any provision of this ordinance, or the application of such provision to any person or
circumstance, is held to be unconstitutional, then the remainder of this ordinance, and the
application of the provisions of such to any person or circumstance, shall not be affected thereby.
Section 8: This ordinance shall become effective on the first day of the month that is at least
thirty (30) days after date of its adoption.
INTRODUCED AND READ, as provided by law, by the City Council of the City of Aspen on the
14th day of November 2023.
ATTEST:
Nicole Henning, City Clerk
Torre, Mayor
FINALLY, adopted, passed and approved this 28th day of November 2023.
ATTEST:
Nicole Henning, City Clerk
J�s R. True, City Attorney
Torre, Mayor