Tax relief measure aims to help Colorado eateries as new COVID-19 restrictions put an end to in-person dining again.

Governor Jared Polis signed an executive order last week that extends the November state sales tax payment deadline for 30 days as Colorado restaurants and small businesses face renewed restrictions due to COVID-19.

The extension, developed in consultation with a bipartisan group of legislators, applies to restaurants, bars, and food trucks for up to $2,000 for the month of November. The move recognizes that these businesses are among the hardest hit by the pandemic, said Polis in a statement

"The deduction applies only to a sales tax return for sales made in November 2020 by December 20, 2020 and may only be retained by a qualifying retailer until the earlier of the sales tax return due April 20, 2021, or the retailer’s final sales tax return," states the executive order in part.

The Colorado General Assembly is expected to consider legislation during a special legislative session Monday that could allow bars and restaurants to retain up to $2,000 per month in sales tax through February to help alleviate some financial pressure and allow them to remain operational during the challenging winter months. The assembly will also consider other COVID-19-related bills during the special session that address financial aid for small businesses, child care support, housing and direct rental assistance, broadband access, food and utility assistance, and public health response.

"Restaurants and bars have been especially hard hit and have had to make costly investments to stay open," said the executive order signed by Polis, who was diagnosed with COVID-19 over the weekend. "As we enter fall and winter and outdoor dining becomes less feasible, we must take action to shore up ensure that Colorado restaurants and bars can mitigate, respond to, and recover from economic disruption."

The order defines three types of establishments that are eligible for tax deferrals. These include:

  • Alcoholic beverage drinking places
    • Bars
    • Taverns
    • Brewpubs
    • Distillery pubs
    • Nightclubs
  • Eateries with a fixed physical presence
    • Restaurants
    • Cafes
    • Lunch counters
    • Buffets
    • Coffee shops
    • Carryout shops
  • Mobile food service operations
    • Motorized and non-motorized food trucks and ice cream trucks

Operations that are excluded from the relief measure include breweries without table food service, distilleries, wineries, retail liquor stores, hotels or bed and breakfasts, caterers, private cafeterias, and meal kit companies.

The tax deferral only applies to state net taxable sales, and does not include city, county, or special district sales taxes, said the order. Taxes may be deferred for up to five permanent restaurant sites or mobile food service vehicles, according to the order.