What changes are being made to Aspen’s sales tax administration in 2025?

Starting January 1, 2025, the City of Aspen will shift from self-administered sales tax to state-administered sales tax, requiring businesses to remit sales tax directly to the Colorado Department of Revenue.

Which taxes will remain under the City of Aspen’s jurisdiction?

The City of Aspen will continue to self-administer use taxes and certain local taxes, including lodging and short-term rental excise taxes, through the MuniRevs portal.

What is the new sales tax rate in Aspen under the state-administered system?

The sales tax rate is 2.4%, which will be combined with County and State sales taxes for reporting to the Colorado Department of Revenue starting in 2025.

How will businesses file sales tax reports after the change?

Businesses will report State, County, and City sales taxes through the Department of Revenue tax portal. Local city-specific taxes, like use and lodging taxes, will still be filed through the City’s MuniRevs system.

What are the filing deadlines for the new sales tax system?

There are no changes to filing deadlines. Sales tax reports must be submitted monthly by the 20th of the month following the reporting period, with the first deadline being February 20, 2025.

How should businesses prepare for Aspen’s 2025 tax changes?

Businesses must update their accounting systems to ensure accurate reporting. They must also determine which taxes are to be reported to the Colorado Department of Revenue and which remain under the City of Aspen’s jurisdiction.

2025 Sales Tax Changes in Aspen, Colorado: State vs. Local Reporting

The City of Aspen, in the US state of Colorado, announced and published its decision to shift from self-administration to state collection of local state tax for sales on January 1, 2025. The decision to change from self-administration to state sales tax administration presents specific novelty for taxable persons. However, the City of Aspen said it will continue to self-administer use tax.

Sales Tax Implications for Taxable Persons

First, the decision to shift to state administration only refers to a sales tax of 2.4%, which, from January 1, 2025, will be remitted together with the County and State sales taxes directly to the Colorado Department of Revenue. However, all other local taxes, including use tax, levied on services and goods will remain in the jurisdiction of the City of Aspen and will be reported and paid through the city's online portal - MuniRevs.

Sales tax on sales made in 2024 must be reported and remitted to the City of Aspen through the MuniRevs. The City of Aspen stated that it would keep tax forms for 2024 for a couple of months after new rules come into effect to help those who fail to fulfill their obligations.

There are no changes in filing deadlines, which means sales tax must be reported monthly by the 20th of the month following the reporting period. Therefore, the first filing deadline is February 20, 2025.

The City of Aspen provided several examples of how these rules apply, depending on the type of business, that is, goods and services supplied by the taxable persons.

For example, if taxable persons provide lodging accommodation services, they must file two sales tax reports. The first includes State, County, and City sales tax, which will be reported and remitted through the Department of Revenue tax portal. In addition, a second report and remittance are required through the City's MuniRevs portal, including local city lodging taxes, such as short-term rental excise taxes.

Conclusion

All taxable persons subject to these changes in the sales tax administration must act quickly and prepare their accounting and other systems to meet new requirements. Furthermore, taxable persons should be cautious about which taxes are reported and remitted to the State Department of Revenue and which to the City Finance and Purchasing Department.

Moreover, businesses must pay attention to their obligation to report and remit specific city-local taxes once the responsibility to report and pay sales tax directly to the State becomes effective.

Source: City of Aspen