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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. Beginning June 1, 2019, sales tax will be calculated based on the buyer’s address when the taxable product or service is delivered to the consumer. This is called destination sourcing.
Destination sourcing is also used when a product or service has a lease/rental agreement with periodic recurring payments. Businesses will now be required to collect and remit sales tax for all retail sales to Colorado consumers, regardless of the physical location for the business. Exceptions to the new sales tax law may apply to small businesses and marketplace sellers. Information regarding exceptions to the new sales tax is below.
If a business does not have more than $100,000 of taxable sales into the state of Colorado in the past calendar year they are exempt from collecting and remitting state sales tax. They must still notify customers of their obligation to remit use tax.
HB19-1240 established parameters for how sales tax will be collected and remitted in situations where sales between a buyer and seller are facilitated by a third party. The new sales tax law defined the terminology used in such scenarios:
Marketplace facilitators, starting October 1, 2019, will be required to collect and remit sales tax for all sales to Colorado consumers which they facilitated on behalf of marketplace sellers. As a result, businesses and individuals that sell products through a marketplace facilitator may not have to collect and remit sales tax. If the marketplace seller provides incorrect information to the marketplace facilitator regarding the amount of tax that should be collected, then the marketplace seller can be liable for the amount of sales tax that the marketplace facilitator failed to collect, plus applicable penalties and interest. A multichannel seller will be responsible for sales tax collection and remittance for sales that are not facilitated through a marketplace facilitator.
Information regarding sales and use tax in Colorado can be found in the Department of Revenue Sales Tax Guide. Visit RevenueOnline to find information about how to remit sales tax and to file a Colorado Sales Tax Return. To view a copy of HB19-1240, visit the Colorado General Assembly website.
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If you cannot apply online, you are required to complete and submit the Sales Tax/Withholding Account Application (CR 0100) available on our website. Please write "Out-of-State Retailer" on the top of the paper sales tax application.
When you apply we will create your sales tax account for you. There is a fee for the license and a deposit.
DO NOT WAIT UNTIL THE LAST MINUTE TO ADD NON-PHYSICAL LOCATIONS
Processing of new sites may take longer than usual to process during peak hours.
To add a sales tax account:
To add non-physical locations for the state-collected jurisdictions in Colorado you ship to:
To close an account:
If you do not have a Revenue Online account but would like to close your account, please fill out our Business Closure Form.
NOTE: Do not close your Retailers Use tax account until all required filings have been submitted
There are certified address database providers that have taxing information by address. These provider services have been certified by the Department as accurate. Taxpayers who use these certified databases will not be liable for sales and use tax otherwise owed to the State of Colorado and state-collected municipalities, counties and special districts if the database incorrectly designates the jurisdictions to which tax is owed on the sale, storage, use or consumption of taxable tangible personal property or services. This is the “hold harmless” provision in Colorado statute.
Filing by Paper
If you cannot file through Revenue Online or another electronic method, please download the Retail Sales Tax Return Form DR 0100. Do not use old versions of the form. We cannot process old or photocopied forms.
Payment is due by the 20th day of the month following the reporting period.
Electronic Funds Transfer
Businesses that pay more than $75,000 per year in state sales tax must pay by Electronic Funds Transfer (EFT). Any business can pay by EFT. You can set up EFT ACH debit or ACH credit through your account in Revenue Online. The EFT payment must be submitted by 4:00pm Mountain Time on the due date.
Online Payment in Revenue Online
If you are using Revenue Online to file your return, you may choose to pay by credit card or e-Check.
Check or Money Order
To ensure your payment is posted to your tax account, you must include the eight-digit Colorado Account Number (CAN) assigned to your account by the Department on the check or money order sent with the tax return. Omitting the CAN on your payment could result in your payment not posting properly and you receiving a Balance Due letter (Notice of Deficiency) from the Department. Note: The Federal Employer Identification Number (FEIN) is not the same as the CAN and will not post the payment to your account.
If you owe money and filed online, or with a tax software and want to pay by check or money order:
To create a Revenue Online logon:
In order to be state-collected the jurisdiction must conform to a prescribed list of exemption elections and conform to the State’s tax base. There may be local ordinance changes required, or other conforming actions necessary before the self-collected jurisdiction can qualify for the Colorado Department of Revenue to administer, collect and audit as a state-collected jurisdiction.