Colorado will require out-of-state retailers to collect sales tax

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Online retailers who do business in Colorado will soon have to start collecting sales tax at the point of sale.

The Colorado Department of Revenue announced in a Tuesday press release that out-of-state retailers will be required to obtain a state sales tax license.

In June, the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. found that states may charge tax on purchases from out-of-state retailers even if the business has no physical presence in the state.

“Tax collection at the point of sale eases the process for our residents and creates a level playing field for Colorado businesses, as out-of-state retailers will be required to collect state sales tax, just as in-state retailers do today,” Colorado Department of Revenue Executive Director Michael Hartman said in the release.

Retailers will receive guidance by administrative rule, which is consistent the court’s ruling, and includes “prospective application and a small-seller exception for retailers whose in state sales of products do not exceed $100,000 or 200 transactions annually,” according to the release.

“The [Colorado Department of Revenue] will ensure fair, efficient and transparent implementation of this decision,” Hartman said. “We will pave the least burdensome road possible for businesses to comply with these regulations.”

Visit Colorado.gov/tax/sales-tax-changes after to Nov.1 to register for a sales tax license before the Nov. 20 deadline.

“Out-of-state retailers are not required to collect sales tax on sales prior to the registration deadline,” the release said.

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