Sales and Use Tax Rulings | Nexus
PLR-18-001 Place of Sale for Out-of-State Business
An out-of-state company hires a Colorado-based Printer to print and ship catalogs via common and contract carrier. Catalogs delivered by the common carrier to recipients in Colorado are subject to sales tax, however catalogs delivered to recipients outside of Colorado are not subject to Colorado sales and use tax.
PLR-17-008 Employee Nexus
The presence of Company's employee in Colorado establishes sufficient nexus in Colorado to require Company to charge sales tax on sales into Colorado.
GIL-17-005 Sales of Mobile Device
Company is doing business in Colorado because it has an employee who is located in Colorado and who solicits sales on behalf of Company. Therefore, Company has an obligation to collect sales or retailer’s use tax depending on where the sale occurs.
GIL-17-009 Retailer’s Use Tax on Leases
Because ownership and possession occur outside of Colorado and Company will be doing business in Colorado when it hires an employee who works in Colorado, Company must collect retailer’s use tax on sales shipped to Colorado once an employee works in Colorado.
GIL-17-015 Independent Contractor Creates Nexus
Company's hiring of independent contractors for maintenance and repair work in Colorado likely creates nexus in Colorado.
PLR-16-010 Local Tax Obligation
Company does not have a business presence in the state-administered cities and counties. However, Company does have an obligation to collect the state retailer’s use tax and state-administered special districts use tax.
GIL-16-016 Consignment Warehouse
Company is likely doing business in Colorado because it holds inventory in a warehouse in Colorado. Therefore, it appears Company must collect, report, and remit sales tax for taxable sales in Colorado.
GIL-15-016 Employee Creates Nexus
Company that is located outside Colorado but has an employee working in Colorado has nexus and must collect sales tax on sales made to customers in Colorado.
PLR-14-005 Internet Wine Sales
Out-of-state retailer’s employee working in Colorado creates nexus and retailer must collect sales tax on online sales to Colorado residents.
GIL-14-005 Mail Order Sales
Company is doing business in Colorado and is required to collect sales tax on sales made into Colorado. Company must collect local sales taxes in jurisdictions in which Company shares with the purchasers. If Company ships product into a local jurisdiction in which it does not have a direct or indirect location, then Company should report the sale on its Retailer’s Use Tax Account and collect state use tax and, if the customer is within a special district that levies a use tax, any applicable special district use tax.
GIL-14-010 Doing Business in Colorado
A shipper has substantial nexus with Colorado if it uses a contract carrier, which is an agent of the shipper, to make regular deliveries into Colorado.
The continuous presence of a lessor's business assets in a local tax jurisdiction is typically sufficient to create nexus in that local tax jurisdiction and, thus, the lessor must collect local sales taxes.
GIL-14-015 Nexus for Sales and Income Taxes
In general, a seller has sales tax nexus in Colorado if it has employees or independent contractors in this state, even if their activities are completely unrelated to the sales transactions. A contract carrier, unlike a common carrier, can also create substantial nexus with Colorado (and the local jurisdictions into which it delivers goods) if Company regularly ships goods via a contract carrier into Colorado. A company has substantial nexus for purposes of income tax if it has property, payroll, or sales in Colorado that exceed a certain dollar thresholds. Employees in Colorado for less than a day do not give rise to a wage withholding obligation. However, if the employee performs services for more than a single day in Colorado, they are required to file and pay Colorado income tax, and the employer is required to withhold and remit Colorado income tax.
PLR-13-009 Consigned Merchandise Procured for Auction
Company, which has nexus in Colorado, must collect sales tax on property sold at its auctions, which are conducted outside Colorado, if the taxable tangible personal property is delivered to a buyer who is located in Colorado, or delivered to a person who is designated by buyer to receive the goods and who is located in Colorado. Company also has an obligation to collect Colorado use tax if the sale is deemed to occur outside Colorado but is delivered into Colorado to the buyer for use, storage, or consumption in Colorado. Company does not have an obligation to collect sales or use tax if the property is sold at auction conducted outside Colorado and the property is delivered to the buyer or consumer who is located outside Colorado.
GIL-13-027 Drilling Equipment
Company’s purchases of steel, cement, pipe, and other material from suppliers are not wholesale purchases because Company alters and uses the materials to build structures. If the sale of equipment occurs outside Colorado and Company pays sales or use tax to another state and Company, thereafter, moves the machinery to Colorado for use in Colorado, then Company must pay Colorado state use tax and any state-administered local use tax applicable to the location where the machinery is registered. Company is entitled to a credit against any such Colorado state and local use taxes equal to the amount of sales or use tax paid to the other state.
PLR-12-002 Affiliate Nexus
Company has nexus in Colorado because it is a component member of a combined group of corporations and another component member has a business presence in Colorado. In addition, Affiliated Company is an indirect representative of Company when it acts on behalf of Company to solicit and facilitate sales and sales-related activities because, among other reasons, it accepts returns on behalf of Company and participates in a loyalty points program with Affiliated Company. Therefore, Company must open a sales tax account and retailer’s use tax account to report and collect local and special district sales taxes for sales shipped into local jurisdictions in which Affiliated Company's stores are located.
A sale of tangible personal property to a Native American tribal member is exempt from sales tax if the sale occurs on the tribal member's tribal land. However, sales to non-tribal members on tribal lands are not exempt, and sales to tribal members off the member's tribal lands are not exempt sales.
GIL-12-016 Affiliate Nexus
The affiliate nexus rule applies to state-administered localities.
GIL-12-018 Special Mobile Machinery
When Company and lessee / purchaser are located in the same tax jurisdiction, then Company must collect sales tax for that state-administered local tax jurisdiction, but does not have an obligation to collect the local sales taxes of other local tax jurisdictions in which Company does not have a sufficient nexus.
PLR-11-006 Local Sales Tax
The collection of local sales and use taxes depends on the local tax jurisdiction in which both the retailer and customer are located. The means by which a product is delivered can affect whether local sales and use tax applies.
GIL-11-012 Local Sales Tax on Internet Sales
An internet retailer who has a business presence in a local tax jurisdiction must collect that jurisdiction’s sales tax.
General discussion of taxability of mark-up charges in cases of resellers, agents, brokers, third party contracts. General discussion of nexus for income and sales tax purposes.
GIL-09-008 Nexus Created by Related Service Activity
Non-taxable services may create nexus for sales tax collection for one to two sales per year by nonresident single member LLC. Income generated from sources within Colorado is subject to Colorado income tax.
GIL-08-029 Leased Property
Local sales tax does not apply to retailer/lessor who did not have presence in local jurisdiction.
GIL-08-036 Surgical Stapler and Forceps
Medical supplies exempt from sales and use tax if they leave with the patient but subject to tax if they are used and consumed by the physician. General nexus discussion.
GIL-07-005 Special Events Creating Nexus
Out-of-state retailer which held special events in Colorado may have nexus for sales tax collection. Retailer's status as a 501(c)(3) does not make its sales exempt.
GIL-07-008 Nexus of Out-of-State Distributor
Discussion of nexus for out-of-state distributor.
GIL-07-009 Lease of Water Treatment Solutions
Discussion of nexus of out-of-state company that leases property located in Colorado and whether property is exempt from tax.
Out-of-state supplier not liable for sales or use tax for property delivered to in-state consumer. Out-of-state retailer may use another state's sales tax license to document wholesale sale exemption.
GIL-07-012 Local Sales Tax
Discussion of collection of local sales and use taxes.
GIL-07-023 Nexus of Out-of-State Distributor
Out-of-state distributor does not have nexus to Colorado.
GIL-07-026 Nexus for Conducting Sales Seminars
Out-of-state retailer which conducts the following activities in state has nexus: training seminars, sales representatives, arrange financing, and delivers product.
GIL-07-030 Nexus of Application Service Provider
Nexus discussion of an Application Service Provider.
GIL-07-031 Drop Shipments
A distributor that ships by common carrier and does not have representatives, a store, or any other connection with Colorado does not have nexus. However, a distributor that does not have nexus is nevertheless obligated to collect tax if it voluntarily obtained sales tax license.