Out-of-state retailers must collect sales tax if they meet Colorado’s economic nexus requirements. Collection requirements will begin on December 1, 2018. This new rule is issued in the wake of the decision in Wayfair v. South Dakota.
Economic Nexus Thresholds for Out-of-State Retailers
The sales thresholds for economic nexus in Colorado are:
- $100,000 or more in annual gross sales or services into Colorado, including exempt sales; or
- 200 or more annual sales to customers in Colorado.
Local Tax Collection
Retailers that must collect Colorado state sales tax must also collect:
- state-collected local sales tax; and
- special district sales tax.
Retailers should contact home rule cities for guidance.
Home rule cities that the state doesn’t collect local sales tax for should be contacted directly.
Sales Tax License Required
Out-of-state retailers meeting the nexus threshold must get a Colorado Sales Tax license. Online applications for out-of-state retailers will be available on November 1, 2018. Applications are due by November 30, 2018.
What Steps Do Out-of-State Retailers Need to Take?
The Department of Revenue provides detailed instructions for out-of-state retailers on:
- filing; and
Audits for Out-of-State Retailers
Out-of-state retailers are subject to audit.
Enforcement Date for Out-of-State Retailers
The first day out-of-state retailers must start collecting sales tax is December 1, 2018.
Information for Out-of-State Retailers, Colorado Department of Revenue, September 12, 2018; Emergency Regulation 39-26-204(2), Colorado Department of Revenue, effective October 1, 2018, and effective as noted above; News Release, Colorado Department of Revenue, September 11, 2018