2019 Sales Tax Legislation
- Senate Bill 19-006: Electronic Sales And Use Tax Simplification System
- House Bill 19-1240: Sales And Use Tax Administration
- House Bill 19-1245: Affordable Housing Funding From Vendor Fee Changes
There are other bills that were passed in this session that have an impact on taxation in Colorado. Visit the General Assembly website for information on all of the legislation passed during the 2019 Legislative Session. For information on how a bill becomes a law, review the Colorado General Assembly Legislative Process document, watch this video, and visit the Office of Legislative Legal Services website.
This bill lays the pathway toward developing and implementing an electronic sales and use tax simplification system. This system would be used by the state and local taxing jurisdictions for the acceptance of returns and processing of payments for sales and use tax. For more information, about the bill visit the General Assembly website. For status updates on this project, visit the Geographic Information System web page.
As businesses have moved toward an online sales model, sales tax collection for the state of Colorado has changed with the passage of HB19-1240 to account for that shift. Sales tax is now calculated based on the buyer’s address when the taxable product or service is delivered to the consumer. This is called destination sourcing.
HB19-1240 has a second provision that went into effect on October 1, 2019. This provision deals specifically with sales tax collection when selling through a marketplace facilitator. Information regarding this change can be found in the Department of Revenue Marketplaces Guidance publication and on the Marketplace Information web page.
Out-of-State Economic Nexus
This video is an introduction to economic nexus for out-of-state retailers. For more information, visit the Out-of-State Businesses web page. Businesses located within Colorado should visit the In-State Businesses web page.
Marketplace Frequently Asked Questions
Effective January 1, 2020, the state vendor fee (also known as a service fee) increased from 3.33% to 4% and is capped at $1,000 per filing period at the account level. This limit applies to the company as a whole, regardless of the number of locations. Additionally, retailers with multiple locations are required to consolidate all locations into one account, if the retailer did not initially set up their account in this way.
If the combined Colorado state vendor fee calculated on all of the retailer’s sales tax returns for all sites/locations for the filing period exceeds $1,000, the retailer must complete the State Service Fee Worksheet (DR 0103). The worksheet is used to determine what amount, if any, the retailers must add to the total balance due calculated on the retailer’s returns. The DR 0103 can be downloaded from the Sales & Use Tax Forms web page.