Colorado’s Department of Revenue is ill-equipped to ensure that businesses properly collect sales taxes, according to a new state audit released Monday.
About 11,000 businesses either over- or under-collected millions of dollars in sales taxes from customers last year. That’s according to the State Auditor’s Office, which determined that these retailers had been placed into the wrong tax districts.
The amount makes up just a fraction of total sales taxes collected by the revenue department. But it means some cities with state-administered sales taxes lost out on money they were due.
The audit finds that the department is not using the best available mapping technology, which would ensure that businesses are registered in the correct tax districts. Auditors say errors could largely be avoided with new mapping software.