Colorado expands sales tax to digital software under House Bill 26-1223, effective 1 January 2027. The bill removes exemptions for downloaded and remotely accessible software, potentially including SaaS.
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Key Takeaways
As of 1 January 2027, Colorado's House Bill 26-1223 applies to sales and use tax on downloaded and remotely accessible software, removing previous exemptions.
Custom software developed for a specific user and software governed by a negotiated license agreement remain exempt from sales and use tax in Colorado under House Bill 26-1223.
The bill's language on remote access through the internet suggests that non-negotiated SaaS may be taxable, and the Department of Revenue is expected to issue a ruling clarifying this.
Remote sellers of digital software will need to collect and remit sales and use tax from 1 January 2027, as the bill expands the taxable base to include remotely accessible software.
Primary source
Read the full article at 1stopVATThis summary was published on VATfaqs.com on 17 July 2026. It relates to VAT developments in United States. The original source is 1stopVAT.
