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Senate passes bill to eliminate Colorado retail vendor fee after heated debate
Summary
The Colorado Senate voted 18–17 on Aug. 25, 2025, to eliminate the 4% vendor (service) fee retailers and restaurants keep when collecting state sales tax. Supporters said the change removes an outdated subsidy and preserves state revenue after federal tax changes; opponents said it punishes small businesses and should go to voters or be paired with spending cuts.
Senators on Monday approved House Bill 25B‑1005, which ends Colorado’s longstanding allowance that lets many retailers and restaurants retain a roughly 4% “vendor” or service fee for collecting state sales tax. The measure passed on third reading by a vote of 18 yeas to 17 nays.
Sponsor Senator Kipp, who moved the bill, said the change is necessary after federal tax changes and a resulting hit to the state budget. “This bill will eliminate what we some people…
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