The South Dakota v. Wayfair, Inc. decision impacted the Colorado economic nexus sales tax details. Colorado joined nearly every other state (and Washington, D.C.) in clarifying economic nexus for remote sellers and in how marketplace facilitators collect and remit sales tax. While Colorado enacted legislation similar to what was laid out in Wayfair, there are key differences. We have highlighted the larger points in the below blog post.
June 1, 2019; October 1, 2019 for marketplace facilitators.
Threshold applies to the previous or current calendar year.
Retail sales of tangible personal property delivered into the state.
When You Need to Register Once You Exceed the Threshold:
By the first day of the first month commencing at least 90 days after the retailer’s aggregate state sales in the current year exceed the threshold.
Summary: Out-of-state retailers are considered to have nexus in Colorado if their gross revenue from retail sales exceeds $100,000 annually in the current or previous years; remote sellers under that threshold are granted a “small business exception” and are not obligated to collect or remit Colorado sales tax on their sales, according to the Colorado Department of Revenue.
Colorado has a Notice and Reporting requirement for small business sellers, where if remote sellers do not have nexus (physical or economic) in the state, they must still include a note to their Colorado consumers indicating that sales tax was not collected and that the consumer must remit use tax to the state personally. Additionally, the remote seller must file an annual report to the state indicating who all of the Colorado consumers are in the state, from whom the state should expect use tax remittances.
The Colorado marketplace facilitator threshold is also $100,000. Marketplace facilitators must collect and remit all applicable state and state-administered local sales taxes for any sales made in Colorado through its marketplace. If a marketplace facilitator makes direct sales of its own goods and services through its marketplace, it has the same sales tax obligations with respect to those sales as any other retailer.
Colorado also has rules regarding local taxes as they apply to remote sellers with economic nexus. Working with the right partner can help ensure that all state and local regulations are followed and compliance is maintained.
Colorado Sales Tax Resources: Reach out to our team for more information on the Colorado’s economic nexus law. Additionally, check out our interactive sales tax nexus map for real-time updates on every state.