Colorado Sales Tax Filing Update October 2019
Colorado passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective October 1, 2019.
• Amazon, eBay, Etsy and Walmart began this collection on October 1, 2019.
Please review general information regarding Marketplace Facilitators and how your TaxJar Sales Tax Reports support these changes here in our FAQ.
In this article, we summarize Colorado's state guidance on the following questions:
- Do I need to register for a sales tax license in Colorado?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on Colorado sales on non-marketplace platforms?
- Do I still need to file returns in Colorado?
- How do I file without paying double tax on the sales that were collected and remitted by my Marketplace?
I've never registered for a Colorado license. Do I need to register for a sales tax license in Colorado now?
If you have never registered for a sales tax license in Colorado and your only sales in Colorado are through a Marketplace and your Marketplace Facilitator collects and remits sales tax on your behalf in this state, you will NOT need to register for a Colorado sales tax license.
If you are a retailer with a physical presence in Colorado or you are a remote seller who has crossed the economic nexus threshold for Colorado ($100,000/year in gross revenue in the previous calendar year), then you will need to register for a Colorado sales tax license.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that create nexus in Colorado (physical, economic or otherwise), you won't need to register for a sales tax license in this state.
I have already registered for a license in Colorado and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
If you do not meet any of the criteria that create nexus in Colorado, (physical, economic or otherwise) you will no longer need a license.
- If you previously opened a sales tax account and obtained a sales tax license, then you must either close the account or file returns reporting no sales activity.
- You'll need to work with the state directly to cancel your existing license.
Do I need to collect taxes on my Colorado sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in Colorado on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Colorado orders that are processed on the other platforms.
Do I still need to file returns in Colorado?
Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns.
- If all your sales are Marketplace collected, you would still need to file a return reporting no sales activity.
I still need to file returns in Colorado. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
Currently, you're not required to include marketplace sales in your Colorado returns. For informational purposes only, we've denoted your marketplace sales in your Colorado Report as "Marketplace Sales".
- Please note, as of October 25, 2019, we received confirmation from Amazon that as a marketplace facilitator, they are not collecting home-rule jurisdiction taxes. As a marketplace seller, you would still be responsible for collecting and reporting on any local taxes for Colorado's home rule cities.
If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for Colorado, our system will handle the Marketplace-collected changes automatically.