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Colorado DOR reverses course, saying don't rely on what we said

The state of Colorado Department of Revenue has come out strong in 2018 with a pronouncement that all previous bulletins and positions during the late 2000s are now null and void. Read for yourself what they have to say in Rev. Bulletin 18-01, issued Feb. 28, 2018:

The Department of Revenue hereby rescinds all Revenue Bulletins and Policy Positions previously published by the Department. These documents, which were last published by the Department during the late 2000s, do not represent an official articulation of any position held by the Department nor does the Department consider them binding with respect to any tax matter. The previously published Revenue Bulletins and Policy Positions should not be relied on for any purpose.

Taxpayers seeking guidance beyond that provided in Colorado’s tax statutes should consult the Department’s rules and regulations, which are published by the Secretary of State. A taxpayer seeking additional guidance regarding a particular transaction or factual scenario can request a Private Letter Ruling (PLR) or General Information Letter (GIL). Requests for PLRs and GILs must comply with certain requirements, which are currently set forth at 1 Code of Colorado Regulations 201-1, Regulation 24-35-103.5. PLRs are binding upon the Department only with respect to the specific taxpayer that requested the PLR. GILs are for informational purposes only and are not binding on the Department.

The Takeaway

The Colorado DOR is cleaning the slate and starting fresh on positions established in the late 2000s. Not only is the time period vague for which this statement applies, taxpayers can no longer rely on publicly released DOR positions. This means that is you made a tax decision based on such revenue bulletins, sorry, you may now need to reverse or modify that decision for compliance, or at the very least, request a PLR or GIL.

In more than two decades of monitoring legal and regulatory state and local tax developments, I have never seen a department of revenue reverse en masse previous positions from a specific time period.

This action could leave taxpayers and their preparers in a bind on how to proceed with certainty, and could slow down the rollout of business strategy as taxpayers request and await PLRs and GILs.

We’ll keep you posted on developments from the Colorado DOR.

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Judy Vorndran, TaxOps' lead state and local tax partner, can be reached at jvorndran@taxops.com or 720.227.0093. Follow Judy on LinkedIn.

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