Tax Guide Updated to Accelerate Software Industry Growth
Wednesday, November 5, 2014
The City and County of Denver has issued an updated tax guide, which addresses the collection of the city’s Sales and Use tax on data processing programs in many areas, including software. The new guide follows a series of collaborative meetings between city officials and local software industry leaders in which concerns, misunderstandings and challenges regarding tax collection on software were addressed.
“We did a lot of active listening and quickly discovered a lack of clarity in terms of tax issues related to software,” Mayor Michael B. Hancock said. “Our culture of ingenuity provides people the opportunity to turn concepts into reality. This new guide gives a clearer picture for our software firms and business community, enabling them to continue their successful growth here in Denver.”
With the active participation of the city, the Colorado Technology Association convened various stakeholders through town hall meetings earlier this summer. Dialogue focused on the lack of clarity evident in Denver’s data processing tax code, largely due to the rapidly changing software industry over the past decade, including cloud computing and app development services.
“These forums were incredibly productive, providing avenues for everyone to work together to increase our shared understanding,” said Erik Mitisek, CEO of the Colorado Technology Association. “The speed of the process, inclusiveness of the stakeholders and the collaborative spirit between the parties really exemplified the best of Denver.”
“While the updated tax guide does not change the city’s tax policy, it does provide a deeper understanding of the imposition of the city’s Sales and Use Tax on the purchase price or charge for data processing programs,” said Cary Kennedy, Denver’s Chief Financial Officer. “The guide clarifies when a taxable event occurs, and it contains several new hypothetical software development examples.”
The Colorado Technology Association and city officials will host a town hall meeting to review the new tax guide, field questions and discuss the future of software in Denver. The meeting will take place Nov. 17 at 1:15 p.m. at INDUSTRY, 3000 Brighton Blvd.
“Our software industry has experienced some of the most remarkable and dynamic changes over the past decade,” said Paul Washington, executive director of the Denver Office of Economic Development. “We are pleased to have found a collaborative and comprehensive approach to help sustain the continued growth of software commerce in Denver.”
The updated data processing tax guide is available on Denvergov.org/finance.