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Transcript

Meredith Smith: Cathy, thank you so much for joining us today on the SALTovation podcast. We are honored to have you here today.

Cathy Kipp: Well, thanks so much for having me. I really appreciate it.

Meredith Smith: So, can you tell us a bit about your background and how your career path led you into politics? And really, what kind of motivated your move to become a representative for Fort Collins in that area of our state?

Cathy Kipp: Well, sure. Um, so I, I don’t know if it’s all career, a lot of it’s volunteer stuff, but I actually graduated from college many, many years ago with a degree in computer and information science. They called it that back in the day. I worked at the CSU Colorado State University Veterinary Teaching Hospital for 10 years doing IT. Then I did a little bit of contract work for a couple of years after that. Then I started having kids. I have twins who are now 26, so I’ve been doing the volunteer mom thing for around 26 years. That eventually led me to running for the school board because I was the volunteer mom who was always in the classroom. When you have twins, it’s easy because you don’t have one kid at home and one at school. You can just go into the classroom and do all your volunteer stuff at the same time. It’s very efficient.

Cathy Kipp: So I did a lot of volunteering for many years. I was the PTO president and stuff like that. When my kids were in eighth grade, someone called and asked if I had ever thought about running for the school board. I said, well, maybe when my kids are older. But I looked at them in eighth grade and thought, if I don’t do it now, I never will. So in 2011, I ran for the school board. After serving for seven years, I decided to run for the state house because we need to properly fund public education in Colorado. That’s why I ran in the first place. I thought I would run in 2020, but one of our senators became a county commissioner, which freed up a senate seat, which freed up a house seat, so I went in a little sooner than expected. I’ve been in this job for the last six years and now I’m running for the state Senate.

Judy Vorndran: And when you were on the school board, was that a paid position?

Cathy Kipp: No, it was a volunteer position. We have changed the law to allow for school boards to give themselves some small amount of money now if they want. But basically, if you went to a training thing, you could get reimbursed for mileage. It was a lot of work for no pay, no benefits. The reward is in trying to do the work to make sure our kiddos get the best education we can give them.

Judy Vorndran: And you’re blessed to be able to afford to do that, to give your time and talent. That’s not common for every American by any stretch.

Cathy Kipp: Well, I know. That’s one of the issues. Even if you look at people in the state house, we are paid and we can get health insurance, which is awesome. It’s way better than when I was on the school board. But still, state representatives make around $40,000 a year, which is fine. It’s a lot better than the school board, but for people who are younger, have a family, and are trying to raise kids, send them to college, it can be challenging.

Judy Vorndran: Right, people can’t give up their time and talent without money because they have to pay their livelihoods.

Cathy Kipp: Right. It’s a dichotomy in the system. You want the best and the brightest to help you, but there are constraints. During my time on the school board, we had an interim superintendent who said that in Florida, they pay their school board members $90,000 a year. I thought, do I really want someone motivated by that kind of salary, or do I want them to care more about kids? Somewhere in the middle, between $90,000 a year and nothing, is probably a good compromise. But it’s hard to say what that is. I did have one woman I recruited to run for the school board, but when she learned we didn’t make anything, she said she couldn’t do it.

Judy Vorndran: Well, thank you.

Cathy Kipp: It’s an honor to do it. There are thousands of locally elected officials in the country, and hopefully, they’re all there because they want to serve their community.

Judy Vorndran: Yes, I agree.

Meredith Smith: For our listeners, it might seem a little out of the ordinary that we have a politician on our podcast, as we are usually apolitical. But we are particularly interested in speaking with Cathy today because of her work on the Colorado Legislative Sales and Use Tax Simplification Task Force. Representative Tharp initially chaired that task force. How did you get up to speed on such a complex topic without a tax background, knowing that our Colorado sales tax system is not the easiest?

Cathy Kipp: It’s the Colorado Sales and Use Tax Simplification Task Force. We’re trying to simplify a very complex system. I got pulled into this initially in my first year in the legislature. One of my constituents reached out to me. They have a small business here. I met them at a local coffee shop, bought some toffee from them, and they explained that if they sell to me here, they have to charge the sales tax for where they are because that’s where they’re delivering it to me.

[00:07:30]

Cathy Kipp: But if we were up in our store, we would be charging you the sales tax where our store is. But if we were to ship it to you, we would charge you a different rate. They explained to me what they were going through in trying to figure it out. They were particularly concerned because, as a candy business, they would get lots of orders for Christmas. So if you were a business and you wanted to send 300 of your customers throughout the state of Colorado a box of toffee, how do you figure that out? We have around 760 separate taxing jurisdictions with different rates within Colorado, and you’re doing destination sourcing. It’s a big problem. Oh my gosh, that’s a big problem. So I talked to Tracy Kraft-Tharp, and she said, well, we were doing this, we’ve got this law. I think we passed a law that year that made some additional changes. I don’t remember which year of the task force that was, but that was my first year in the legislature.

Judy Vorndran: There was a small seller exception initially for the destination source, but that kind of went away.

Cathy Kipp: This was a family business and they didn’t fall under that exemption, so they had to look it up. At the time, there wasn’t a good way to look that information up, so it was really challenging for them. We had a lot of conversations. I was talking to the Department of Revenue folks, talking to everybody I could. I think it was two years later that I joined the committee, after Tracy Kraft-Tharp left the legislature. There are four members of the legislature on that committee: a Democrat and a Republican from the House and a Democrat and a Republican from the Senate. When Tracy Kraft-Tharp left, they appointed me to be the Democrat from the House.

10:25 Meredith Smith: What’s great about that story is that a constituent reached out and said, hey, here’s something we feel as small business owners in this jurisdiction. We don’t know how to do something about it, but we’re going to reach out to our representative. It indicates that government matters and can truly work for the people. I love that you took that opportunity to listen to a member of your constituency and took it beyond just a smile and a handshake at a coffee shop, taking it back to the halls of the Capitol to try to do something about it.

Judy Vorndran: We did because now we have the lookup tool online, the GIS, and there’s a rate and some taxability answers on the Colorado website. So you could self-serve for this particular business. But I remember meeting them and thinking, I don’t know how to tell you to do it. There was no good way to do it. If you’re only in one state, it’s expensive to buy rates for just one. It’s not that accessible to buy a one-system solution. They’re more built for all the states instead of just a bit and a piece. Now you’re seeing a lot of vendors in the sales tax space who don’t want to just sell rates. They want to sell tax calculations and sales tax returns, so they’re not willing to do just a little bit. It’s really hard for a small company that’s not operating in multiple places to manage that compliance. They had to wing it for a while, as I recall. I remember thinking this is terrible.

Cathy Kipp: Well, now there’s a part of the statute that I read and said, well, I think you could probably interpret this to mean that you could continue doing it the way you’re doing it. I don’t remember what that was.

Judy Vorndran: Probably sourcing into their own domicile, like it’s sold here and then we just put it in the box and send it off. So I’m going to charge tax at my location. That’s probably what they did.

Cathy Kipp: I don’t know how exactly they ended up doing it. That was my suggestion because I didn’t know how else to recommend it. But if I can just say, in my part of the world, and I hope in your part of the world, you have your local government people. A lot of people don’t get that there’s anybody between City Council and Washington, D.C. But there are several layers of government. You have your City Council, your County Commissioners, school board members, people in local government, and local electives like me who serve at the state level. Local House and Senate members are accessible. We’re not like the people in Washington who have a million constituents or more each. Most of us are willing to sit down in a coffee shop with you or at least make sure we respond to your issue if you have one. The number of people we helped navigate unemployment insurance during the pandemic was enormous.

[00:14:00]

Cathy Kipp: You know, we have listening sessions, we have town halls. Our job title is the description: representative. That’s what we’re supposed to be doing.

Meredith Smith: You spoke earlier about your background in IT. How do you think that background in analytical and critical thinking helped you understand the complexities of managing the sales tax system at both the state and local levels?

Cathy Kipp: Yeah, so, I mean, I think it’s interesting because I was working in IT at the CSU Veterinary Teaching Hospital. When I saw my first spreadsheet, I fell in love. They didn’t have spreadsheets before then. This was a long time ago. I was there at the beginning of the world of databases. I eventually wrote a book on database programming and management because it’s a cool thing. The tools we have today are great. It boggles my mind. We had a bill that came out of the recent Sales and Use Tax Simplification Task Force. It was supposed to give you another way to look it up besides just by the number. We wanted to say, what if you wanted to look it up by name? That shouldn’t be hard to do, yet it had close to a $10,000 fiscal note on it. I mean, what software are they using now? The last time I was professionally in this world was in the 1990s, but things should be easier now, not harder. I don’t get why we have such enormous fiscal notes on these types of bills. Maybe when I get over to the Senate, if I get over to the Senate…

16:37 Judy Vorndran: Well, I sat through all the sessions to choose the products we’re using for the GIS database and the taxability decisions and the backend so we could incorporate the home rule cities with the Colorado Revenue Online Filing. I sat through all of that. I had no idea how big the IT department is at the state of Colorado or how many buildings we have. I was like, wow, we’re at this location in Lakewood, we’re at this location in Golden. There are a lot of people that work for the state of Colorado that do tech and lots of buildings they work in. I was astounded at the amount of effort to make a decision on a vendor. It’s onerous. It was quite an interesting discussion. People don’t really know how to buy IT. That’s the other problem. We use the GenTax system for our backend, and it’s very customized. It’s not an out-of-the-box solution, but it took months to make the decision, maybe even a year. Our executive director of the Department of Revenue at the time was a former IT person, so she helped guide us through. It was helpful because she had a different view of things. She said, you have to start with something and then build from it as exceptions arise. That was very helpful to have that technology education in making the decision on the GIS backend system.

Cathy Kipp: That’s so right. Sometimes it makes sense to make sure that, oh, yeah, I’m just going to go and make this one little fix. I remember reading an article years ago that said 10 of the most expensive mistakes ever made in IT were things like changing one character in a line of code. They thought it was a simple fix and didn’t go through all the testing to make sure it worked. If you’re going to make software, change software, you should be doing that. Sometimes people will change something they think is simple, and it screws other stuff up. Unintended consequences. There is something to be said for it costing a little more than you think. But yeah, the hours of red tape in government, in terms of the selection process, you want to make sure you’re being fair because you’re a governmental entity. You want to make sure you’re giving everybody an equal shot. But sometimes that red tape can really slow things down. Trying to achieve the balance, we probably aren’t there yet. We probably need to work harder at that.

19:25 Meredith Smith: Well, Judy, you brought up the GIS database, which I know was a huge lift.

19:35 Judy Vorndran: The lift was politically getting the meets and bounds and cities and counties to believe the jurisdictions were incorporated, that they had the right information to source the tax to their city and county. It was more political than practical. It did exist because taxpayers need accurate rates. If the rates aren’t accurate, then the vendor is in trouble. This vendor had invested in accurate rates, but the cities and counties didn’t believe it. They were like, no way, it’s not going to be accurate.

20:38 Meredith Smith: We talked about the SUT system and how there is this lack of trust with the home rules and the state. That’s a similar issue, bringing the two together. You had to get the locals on board to say that, you know, zip code 80211 is in Denver and the rate should be this versus, you know, this zip code that’s in Arvada and Wheat Ridge. Which side of the street are you on to get that right? So there is a lot of dependency and trust that you’ve got to get over with the home rules to make sure that everyone’s getting what they’re supposed to.

Meredith Smith: And so with that, Senate Bill 24-023, the hold harmless for errors in the GIS database legislation. Can you explain the significance of that bill and how it addresses some of the challenges businesses or municipalities face?

Cathy Kipp: Well, and Judy can probably tell you more than I can, but frankly, it just seems like a duh, right? If you’re getting information on where your taxing jurisdiction is from the state government and the state government gives you the wrong information, and you end up paying an incorrect amount of tax based on that or to the wrong entity, why should you be held liable for that? That’s just wrong. I don’t even understand why we necessarily had to run legislation to do that, but we did because it was an issue.

Judy: Well, no, it was an issue before. There were all kinds of issues where rates were wrong, but we had the wrong jurisdictional allocation. That’s very common. So when a city comes in, they’re like, that’s our money. You gave it to the wrong city. They’re very particular. They know where they are. But a business doesn’t always know that. They’re like, I have a Commerce City address. Oh, but I’m in unincorporated Nowhereville. It does exist, and businesses don’t know that.

Cathy Kipp: Right. And it just didn’t make any sense. Anybody who looked at it would say, why do we do this to people? That doesn’t make any sense. That’s one of the great things about the Sales and Use Tax Simplification Task Force. It’s a bipartisan committee with one member from each chamber in each party. That means all the legislation we pass has to be bipartisan. Anything that gets past our committee has to have agreement. We’re just sitting there saying, well, yeah, you think this? Yeah, I think that too. It’s not rocket science. Most legislators are laypeople. We all come from different backgrounds, but hopefully, we’re all just reasonable human beings who can look at a situation and say, well, that doesn’t seem reasonable. We can’t expect our constituents to do that. Let’s make this better.

Judy Vorndran: Yeah. For me, though, I thought it was interesting that we passed it because it really helps small businesses. Most large businesses aren’t using our GIS locator. It’s a verification tool, but they have a system of record that pulls rates and rules for their locations based on address information they put in their billing system. So a lot of people aren’t really using that specifically to validate after the fact. They use a holistic approach. Do the rates everywhere in America. A lot of people can’t take the time and effort to look a rate up every single time they have a transaction. That’s just not efficient if you have a larger business. We’re supposed to solve some of that, but even they have issues with where the rates are. We definitely have issues on audits where rates are misapplied because of the way the sourcing happens within the billing system to the rate system.

Cathy Kipp: Yeah, and you go back to the candy company, right? If somebody sent them a spreadsheet with 300 addresses and said, send a pound of toffee to each of these addresses, you weren’t going to want to look up each one of those, even if you can. You want to submit the spreadsheet of addresses and get back the tax rate for each of those so that you can do your spreadsheet automatically. That’s why we have technology, right? Can you imagine doing this before we had technology? It’s not possible.

Meredith Smith: Not possible. One of my first days when I started in public accounting almost 20 years ago, our sales tax person had this giant stack of maps in his office. As a junior in college, I’m an intern, and I was like, wow, why is he constantly looking at maps? He was like, well, because it depends on what side of the street is going to be your sales tax rate. He had everything highlighted, like, well, this boundary is here, this is Commerce City, this is here, and just had stacks and stacks of maps. This was almost 20 years ago. There weren’t the rooftop rates, there wasn’t the GIS system. Judy, maybe if you want to give us a little overview of Colorado’s hold harmless provisions. It was a big deal.

Judy Vorndran: No, it was a huge deal. It was very important legislation to protect the tax-collecting community. But yeah, it was very manual. A lot of these things are very manual, trying to figure it out and not really knowing for sure if you got it right. Taking extra time to call a jurisdiction to say, is this right? If they have the time and bandwidth to do that internally. I knew a lot of larger software and other tech businesses and multi-state businesses didn’t really live in Colorado. They sold to Coloradans. They didn’t care about the nuances of Colorado, but what they had was a gotcha because they were applying the state rules.

[00:27:00]

Judy Vorndran: To the city issues and not doing the cities at all. So we have this huge non-collection group of humans, and you wanted to get more collectors in the state of Colorado at the local level. But they were like, we’re not doing it because it’s too difficult to figure out the rates and make sure it’s right in a mass way. I think we’ve made a lot of progress with the whole registration, common registration, no registration fees. That’s huge for taxpayers. You were there when they learned it was like $2,000 a year to get all these licenses, $20 here, $30 there, $5 here. Crazy. And then to auto-renew them every year, people are just not going to comply with that when they owe $5 in tax or $30. They’re not going to do it where it’s not material. They’re like, come catch me. And the governments couldn’t catch them. It was just a bit and a piece here and there. So we got rid of that.  

Cathy Kipp: It was a financial nightmare. It was a logistical nightmare. Nobody could keep track of all the pieces.Yeah. So I’m glad something we’ve done has been useful because sometimes I feel like a lot. I know, isn’t it? It’s like, so have we made your lives any easier? That’s my question.

Judy Vorndran: We’re still having some issues with SUTS, I will tell you, but that’s more of a connection issue on the backend. Aurora is a great example. They just can’t get some of the information being fed through SUTS to jive with their system. They blame SUTS. SUTS blames Aurora. It’s funny, but it’s going somewhere. 28:17 It’s funny who can and can’t do it. We had a recent one. What city was it? It was a tiny little city. Call a city like, oh, yeah, I see it. All set up because we definitely have a transition between, I’m licensed in Aurora. I want to convert it to SUTS, and there’s not a matching somehow where there’s a little bit of an extra step that’s time-consuming and annoying to make SUTS work. But it’s come so far from where it was, even when we started. So I feel like, you know, you got to say there’s progress because if we didn’t have that, we’d still be talking today about these crazy cities that we can’t apply in. Now, at least we can. There’s hope.

Meredith Smith: And I think SUTS kind of takes the brunt of and is kind of the representative for all things that are happening with Colorado sales tax. If it is a difficult system to navigate, that’s what NON-Colorado taxpayers see. When we talk to tax professionals who aren’t in Colorado, they’re around the country, they’re like, SUTS isn’t possible. We don’t understand all of these things. So it is easy to have that perception that, well, what is this simplification task force doing? Because the larger thing that the nation sees doesn’t totally work, but there are all these other smaller things happening internally that are huge wins. We need to get those out more so it’s not just, well, no one likes SUTS and so Colorado’s still all messed up. We are trying, things are happening.

For our non-Colorado listeners, things are happening and we are trying.

Judy Vorndran: It takes a village to make it happen. People don’t understand that it’s just a system issue. I was in Michigan, they have a ton of jurisdictions, but they have a very different set of sales tax laws and they’re not allowed to increase their rate. They have not increased their sales tax rate since 1996. That’s crazy. The world has changed since then. So that’s a problem with the way they’ve set their system up. It’s all relative to the state.

Cathy Kipp: But you can say that here in Colorado, a lot of our problems stem from stuff we have in our state constitution that says home rule has these rights and they can do different stuff. Unless it’s a matter of statewide concern, we aren’t allowed to mandate that home rule system. So there’s a lot more carrots and sticks involved in this space. But I think hopefully we all have the goal of trying to get to the point where we can make it easier for everybody.

Judy Vorndran: I think it’s interesting that things are in our constitution. Every time you get a vote, we got to vote something to the constitution. My husband’s like, I just have a rule. I don’t want our constitution to get bigger, but it’s the only way to get things on there to make change. I’m like, why can’t we make statutes?

Cathy Kipp: Well, and we can, except there’s all this stuff in there already. The state of Colorado, the legislature, and anything that has a letter on it on your ballot, instead of a number this year, anything with letters on it, those are things that we, as the legislature, referred to the ballot. We aren’t going to put stuff in the constitution, generally, unless we really think that it’s important or there’s no other way to do it. So, like, well, anyway, you don’t need to go into this election, but there’s a lot there. I think there were six different constitutional amendments.

Yeah, so it’s a lot. And then you’re like, well, I like the law, but do I want it in my constitution? But some of them, at least, are taking stuff out of the constitution this year, so that’s something.

Meredith Smith:  Well, and so what do you see as the biggest unresolved challenge in the sales and use tax administration in Colorado? Are there any particular areas that you think future legislative efforts should focus on for remediation?

Cathy Kipp: Those are great questions. So I guess, two things there. First, the committee, there were conversations this year about ending the committee because it’s like, well, how’s it going to end? Should we just put that elsewhere? To my mind, I’m not convinced that we’re done until we have achieved the goal where this is easier to use. I don’t think we’re there yet. For me, I can’t tell you. I have to ask people like you guys. How are we doing? What is the next thing we should be looking at every year? Because you guys are the experts. I always tell everybody I’m a legislator. I am like a mile wide and an inch deep and occasionally I get deeper here and there and I learn more. I’ve learned a lot about taxes since I’ve been here, but I don’t do them. I’m not on the ground like you guys are. To be able to say, well, yeah, you guys did this over here, but we need you to do this next thing over here. What we need you guys for is to say, hey, this still isn’t working well. This is the next thing we think you need to do. Or, oh, everything’s working fine now. We think you can dissolve the committee and go home. That would be great. But I don’t think we’re quite there yet. So I really think it’s up to you guys to tell me, or any legislators on that committee, or any legislators in the legislature, what you think is the status of things and where you think we should go next.

[00:34:00]

Judy Vorndran: Yeah, because I felt pretty stressed that we were going to maybe stop it. What I thought was good about this is the conversation. Stakeholders are there. We’re making sure it happens. There’s a mandate, right? Because we have a task force. We all need to come together and talk about what we’re learning and how we can continue to make it better. I know people feel a little pressure and stress. But that’s the way it goes. We got to do it. I feel like it’s a tool and a vehicle to have the conversation, to have a record, to bring the stakeholders together in a regular and concentrated way to advance the ball. 34:45 You got to do it. If you don’t make a point to mandate and discuss, you don’t get it done. Which is why we didn’t even have this all these years I’ve been practicing. People said this could never get done. I’ve been practicing 30 years.

Cathy Kipp: There is also a viewpoint that was expressed by one of the groups that the committee is just a roadblock, putting up roadblocks every time we get together every summer and do stuff. It’s like, well, okay. How would you propose making progress? You could go and advocate for different bills through various legislators, but that’s not a cohesive way of approaching it.

Judy Vorndran: Yeah. You’re siloing it instead of bringing the discourse to a common set of potential people who could resolve it.

Cathy Kipp: Well, and you guys are all experts. This is one of the committees where the task force means that we have more than just legislators. You don’t want just legislators because, again, I don’t do your job, and I couldn’t tell you the next thing we should be doing without your input.

Judy Vorndran: Even the experts we have in the cities and the counties, they have their own view of how things get done. They’re like, well, this works for us and this doesn’t work. I know there were a lot of people threatened by it in the very beginning, but I feel like there’s been a ton of collegiality created through the process. There’s momentum towards Denver, especially. We’re good, we’re going to do it. We’re fine. We’re going to set the standard. We’re probably the biggest city in the state. We’re good with this. We’re going to make it work. We’re going to dedicate resources to make this work for the state. Having that example just ripples across the state.

Meredith Smith: Well, and I wonder how many jurisdictions thought that the whole secret initiative of the task force was to remove the constitutional ability for home rule cities. We’ve been granted this authority to do what we want. The easiest way to simplify Colorado sales tax is to get rid of home rules. Let’s be honest. I would imagine there’s a lot of potential fear that you’re going to have this giant coalition of people that want to simplify this and get rid of those cities’ authority to do what they want.

37:30 Cathy Kipp: Right. Home rules are one of those things that’s in the state constitution. You’re not getting rid of home rules, you’re not getting rid of their authority, but there are places where it is important for the state to be able to set a baseline and then everybody operates from that as the floor so that you have a little bit of consistency.

Judy Vorndran: I think Paul Archer and Kathleen Conti actually worked on getting the simplified definitions at the cities. Define things the same way, please. Tax them differently, but tell us what they are so we can consistently know that’s what you mean. That was a Herculean effort because everybody just made statutes over the years of ordinances to tax things or not and define it the way they defined it. One city didn’t define things the same way as the state nor as the other city. They would take an example from one city and then modify it for themselves. That makes it very difficult to comply with and frankly, for me to advise people on. I don’t even have a matrix out there that I can pull all the cities, how they handle things. I have a situation now with a car wash. Some cities tax car washes if it’s manual versus automatic or automatic versus manual. Some cities don’t even address it. So is it taxable or not? I just want to comply. Tell me what to do, but your laws aren’t clear enough for me to comply with them.

Cathy Kipp: Let’s make it harder and let’s just tax services too and make it really complicated. Oh, I’m sorry. Maybe that wasn’t the way you wanted to do it.

39:25 Meredith Smith: Well, and so you’re likely not going to be in this role forever, right? What advice would you give to the next person who takes over your seat on this committee, or even a new colleague that’s coming in as a representative from each party, from each chamber, to ensure that this momentum continues and things continue to move forward?

Cathy Kipp: I would say listen to people and listen to the stories. Making sure that you hear the stories that people are telling you so that you don’t think that things are just all hunky-dory. Oh, well, that’s just the way government works. It’s always been like that. It’s going to be that way forever. No, you have to think about things. If you’re talking to people who aren’t legislators, sometimes you get that kind of response. Oh, well, this is just the way it is. It’s like, well, okay. But why is it that way? Is it that way because of statute? Is it that way because people just do it that way? Is it in the state constitution? Is it federal, which we can’t do anything about? Where is the level of the problem so that we can address it? Once you start hearing how complicated our system has been and how time-consuming it has been for so many of our small business people.

[00:41:00]

Cathy Kipp: We want to support our small business people here in Colorado, right? People are like, Democrats don’t support small business people. It’s like, no, I think we do. We really are trying to do that. And I think this is one of those areas where Democrats, Republicans, whoever you are, come together and say, we want this to work for the people in our communities. I don’t think you’re going to have too hard of a time. I think the person who I believe is likely to win my seat in the House is a tax attorney. She might very well be interested in coming and serving on this kind of committee.

41:25 Judy Vorndran: Really? Ooh, I don’t know who this is. I don’t pay attention to all these things.

Cathy Kipp: Well, you wouldn’t know at this point, but yeah. Okay. But yeah, we can talk.

Judy Vorndran: I love that people speak tax.

Cathy Kipp: Well, Bob Marshall’s already a tax attorney. He’s got a really tight seat. I don’t know if he’ll be back for sure. So he might be interested. But Yara is likely to win the seat that I am leaving to run for the Senate. We’ll know by tomorrow.

41:57 Judy Vorndran: What I usually find with the tax attorneys that I associate with, because I’m on the Colorado Bar Tax Committee, they’re like estate and gift attorneys. They do federal structure planning. They don’t do state and local or they’ll file a federal estate return, but they don’t understand sales tax. There’s a big dichotomy between the actual minutia of state and local tax filings and the federal tax system. That’s the big kahuna, right? But what I found in my career is that this tiny little transaction-based tax is huge for business. If you have a million-dollar business and anything’s taxable, that’s $80,000 of risk you need to protect yourself against if you need to collect it from your customer and you don’t. So $80,000 is a lot of money. It’s probably more tax than they’re paying per year that they need to collect and it’s a problem for business.

Cathy Kipp: If somebody like me, who’s not a tax attorney, can figure this out, I imagine even if it’s not their specialty, a regular tax attorney can figure it out. And Yara is involved in state and local taxes in the sense that she is currently our deputy assessor for property taxes.

Judy Vorndran: Yeah, that’s an interesting area of tax too.

Meredith Smith: Judy and I were at the open meeting when Colorado went to destination-based sourcing. I don’t think we will ever forget the amount of people that were in that room from all over the state. They were just like, hey, from a small business perspective, it’s not possible for me to do this. Especially if you have to significantly change from one jurisdiction, completely changing the Colorado tax return, which would be my vote to simplify the Colorado sales tax return. There’s a lot of stuff in there and I have filed a lot of those returns and even I’m like, it’s not right, but I can’t tell, and this is the best information I have. As a state and local tax practitioner for 20 years, sometimes I can’t even fill out that return.

But that’s just like, there is power in hearing from those on the ground doing the work. Joe tax attorney isn’t filing a Colorado sales tax return monthly to report all this stuff. They’ve never filed a Colorado sales tax return in their life. They have no idea what they’re doing. It is truly the people doing the work who are going to push forward change.

Meredith Smith With all of those people in the room, the state responded and they pushed back the start date of the reporting.

Judy Vorndan: There were hundreds of people in this room. People were crying. The line was huge to talk to. I think Josh was there. It was surreal. It was heartbreaking, honestly, how sad and stressed these people were. You don’t want to go into business and feel that way. The state heard them and tried. So that’s a good thing.

Cathy Kipp: That’s good. Obviously, you guys found Tracy Kraft Tharp, Kevin Van Winkle, and those people who wanted to take this cause on. I think those were both founding members of this group.

Cathy Kipp: I think you’re right. I think Kevin Van Winkle was. Tracy’s the one I remember the most. Kevin is running for county commissioner, so he will likely not be in the legislature after the election for too much longer. That means you are going to get new people, but what I think is more important is to consider all of you guys in your tax community who want to see change. You all have people in your house who represent you and people in the Senate who represent you. Reach out to those people and tell them your stories and why it’s important. You’re going to get somebody like me who’s going to say, wow, why is this so hard? This shouldn’t be so hard. What can we do to make it better and easier? That’s why we’re there. For you guys, to be able to tell your stories to people like me, because you’re not going to get people who are deep in the weeds and know everything that you do.

[00:47:00]

Cathy Kipp: So being able to tell that story to people, I think, is really important. It’s something we do a lot in the legislature. We have these things called fact sheets. Usually, there’s a fact sheet for a bill. If we want to talk to somebody, we make a little fact sheet and say, this is what it takes to do this in Colorado, this is what it would take to do it in another state, this is the amount of time, resources, and money it’s taking your small businesses in Colorado to comply with the law. Don’t you want the law complied with? Because that means you’re going to have more revenue to work with, right?

Meredith Smith: . Well, Cathy, I think that’s the perfect spot to end with the perfect call to action. Thank you so much for joining us on the SALTovation podcast. For those listeners, this will come out after the day, but today is election day. There is a lot happening. Again, thank you for sharing your time with us. We really appreciate it.

Judy Vorndran: It just shows that grassroots efforts make a difference and volunteerism is real and unpaid but highly valuable. You can make a huge difference in the world you live in. So thank you for that and your family for making that sacrifice so that you could do it.

Cathy Kipp: I want to thank you guys for all you do to try and put us into a better place too. What you’re doing is really volunteering a lot of your time to try and make the whole system easier for all of those small businesses in Colorado. Everybody’s got their sort of little niche in the world, and you being able to bring it and share it with people like me is what will create change.

Meredith Smith: Well, thank you again, and this has been SALTovation. Until next time.