Sales Tax Changes
Choose In-State or Out-of-State:
Key Changes from HB19-1240:
- The new sales tax law goes into effect June 1, 2019.
- The law clarifies economic nexus for retailers without physical presence in the state of Colorado. This codifies the requirement for out-of-state retailers to collect and remit sales tax for purchases made in the state of Colorado.
- The law also codifies the Department of Revenue’s destination sourcing rule for state sales tax collection. Destination sourcing refers to collecting tax based on where the good or service is received by the purchaser, versus taxing based on the physical location of the business.
- The law does provide an exception for destination sourcing to small businesses physically located in the state of Colorado that have less than $100,000 in retail sales in the state during the previous calendar year, until the time that the Department of Revenue can facilitate a technology solution for easily looking up sales tax rates.
- The new law also allows small businesses that exclusively use an online marketplace facilitator to be exempt from collecting and remitting sales tax, that responsibility would fall to the marketplace.