Use Tax Notice and Reporting Requirements

Colorado adopted a Use Tax in 1937, which requires individuals and businesses to pay use tax on tangible personal property purchased from out-of-state vendors if the item is used, stored, or consumed in Colorado. Consumer use tax must be paid by individuals and businesses for tangible personal property used in Colorado for personal or business purposes (not to be resold) when tax was not paid at the time of purchase.
 
In 2010, the Colorado General Assembly passed HB 10-1193, which established notice and reporting requirements for retailers that make sales into Colorado but do not collect Colorado state sales tax. For seven years, state and federal injuctions prevented the Colorado Department of Revenue (CDOR) from implementing this law. In February 2017, the parties in DMA v. Brohl entered into a settlement, resulting in the dissolution of the injuctions that had prevented enforcement of the notice and reporting requirements.
 
CDOR began enforcement of the reporting and notification requirements on July 1, 2017. The Department has agreed to waive any penalties for failure to follow the law’s notice and reporting requirements for transactions occurring prior to the effective date of July 1, 2017. CDOR promulgated Emergency Rule 39-21-112(3.5), adopted on June 30, 2017 and again on October 23, 2017, to provide guidance to retailers that do not collect Colorado sales or use tax and are subject to the notice and reporting requirements of this law.
 
Read publication FYI General 10: Consumer Use Tax for more information about this tax type. Publication FYI Sales 79: Sales of Taxable Items Over the Internet also has more information and resources about this issue. You can also download the CDOR-AnnualCustomerInformationReport.TEMPLATE along with the Instructions, Format and FAQ for these reports.