Sales Tax Information for Online Sellers

Introduction to Marketplaces for Online Sellers

Sales Tax Responsibilities of Marketplace Sellers

If you sell products online through a marketplace facilitator, you are considered a marketplace seller. As of October 1, 2019, marketplace sellers are no longer required to collect and remit state sales tax for products sold through a marketplace facilitator. 

If you also sell products from your own website and/or in a store in addition to the sales you make via a marketplace facilitator, you would be considered a multi-channel seller. This means you would need to collect and remit state sales tax for the sales made in your shop or on your website. You would not need to collect and remit state sales tax for products sold via a marketplace facilitator. 

Here are some examples to help illustrate what these changes mean for marketplace sellers and multi-channel sellers:

  • Example 1: You make handcrafted hammocks that you sell on Etsy. Etsy is the only place you sell your hammocks. In this circumstance, you have no obligation to collect or remit state sales tax in Colorado. 
  • Example 2: Your handcrafted hammocks are sold on Etsy, but you also have a brick and mortar store in Johnstown where you sell your hammocks. You have no obligation to collect and remit state sales tax on the Etsy sales, but you must collect and remit state sales tax on the sales made from your store in Johnstown.

For more information, review the Marketplace Guide from the Colorado Department of Revenue. It contains information for both marketplace facilitators and marketplace sellers.  

Certification of Registered Marketplace Facilitator (DR 1290)

This form has been provided by the Colorado Department of Revenue for use by marketplace sellers, as applicable. Please refer to the form instructions for more information. Click here to view the DR 1290.