Many of you have received a letter from the State of Colorado regarding new sales tax rules that become effective December 1, 2018. Below is a brief summary of how it may affect your business and the steps to take if it does.
Any business located in Colorado that delivers taxable goods to a jurisdiction outside its current sales tax jurisdiction will now be required to charge and remit sales tax to the State based on the point of delivery for those taxable goods. The State collects tax for many counties and special districts in Colorado; these taxes will also have to be charged and remitted where applicable.
For example:
If your business is located inside the City and County of Montrose you are collecting and remitting 7.95% tax as follows:
To the State: State of Colorado Sales Tax @ 2.9%
Montrose Special District Tax @ .75%
Montrose County Tax @ 1.0%
To the City: City of Montrose Tax @ 3.3%
Should you also deliver goods inside the City of Ouray (Non-Physical Location) you will now have to collect and remit 9.45% tax as follows (Ouray City and County taxes are collected by the State):
To the State: State of Colorado Sales Tax @ 2.9%
City of Ouray Sales Tax @ 4.0%
Ouray County Tax @ 2.55%
If you deliver taxable goods anywhere inside the State of Colorado these rules apply to your business. Each City and County has their own tax rates and some of these are collected by the State and some are collected by the individual municipality. It is your responsibility to collect and remit taxes to the proper agency.
The State of Colorado has made accommodations to streamline the process of setting up Non-Physical locations.
If you already have a Revenue Online account:
You do need to set up “Non-Physical Locations” for each tax jurisdiction where taxable goods are delivered. Filing requirements will be the same as for your current sales tax filing: monthly, quarterly or annually. Non-physical locations only require a return to be filed when sales are actively made in that tax jurisdiction for that filing period (month, quarter, or year). Sales in a jurisdiction where a Physical Location exists always require a tax return to be filed, even when there are no sales for that filing period (month, quarter, or year).
If you do not have a Revenue Online Account you may file reports on paper, but our firm strongly recommends that you create an account. Please contact our office if you need assistance with that process.
Cities for which the State does not collect local sales tax should be contacted directly. There are two counties that self-collect (Pitkin and Weld) and 72 municipalities that self-collect.
Steps you need to take before December 1, 2018:
Please contact our office if you need assistance or have further questions.
Any business located in Colorado that delivers taxable goods to a jurisdiction outside its current sales tax jurisdiction will now be required to charge and remit sales tax to the State based on the point of delivery for those taxable goods. The State collects tax for many counties and special districts in Colorado; these taxes will also have to be charged and remitted where applicable.
For example:
If your business is located inside the City and County of Montrose you are collecting and remitting 7.95% tax as follows:
To the State: State of Colorado Sales Tax @ 2.9%
Montrose Special District Tax @ .75%
Montrose County Tax @ 1.0%
To the City: City of Montrose Tax @ 3.3%
Should you also deliver goods inside the City of Ouray (Non-Physical Location) you will now have to collect and remit 9.45% tax as follows (Ouray City and County taxes are collected by the State):
To the State: State of Colorado Sales Tax @ 2.9%
City of Ouray Sales Tax @ 4.0%
Ouray County Tax @ 2.55%
If you deliver taxable goods anywhere inside the State of Colorado these rules apply to your business. Each City and County has their own tax rates and some of these are collected by the State and some are collected by the individual municipality. It is your responsibility to collect and remit taxes to the proper agency.
The State of Colorado has made accommodations to streamline the process of setting up Non-Physical locations.
If you already have a Revenue Online account:
- Log into your Revenue Online Sales Tax Account.
- Under “I Want To” click on “Add Non-Physical Locations.”
- Follow the steps to add non-physical locations to your sales tax account.
- Once you have completed your request, you will receive an email confirmation.
You do need to set up “Non-Physical Locations” for each tax jurisdiction where taxable goods are delivered. Filing requirements will be the same as for your current sales tax filing: monthly, quarterly or annually. Non-physical locations only require a return to be filed when sales are actively made in that tax jurisdiction for that filing period (month, quarter, or year). Sales in a jurisdiction where a Physical Location exists always require a tax return to be filed, even when there are no sales for that filing period (month, quarter, or year).
If you do not have a Revenue Online Account you may file reports on paper, but our firm strongly recommends that you create an account. Please contact our office if you need assistance with that process.
Cities for which the State does not collect local sales tax should be contacted directly. There are two counties that self-collect (Pitkin and Weld) and 72 municipalities that self-collect.
Steps you need to take before December 1, 2018:
- Familiarize yourself with the areas where you deliver taxable goods.
- Set up all Non-Physical Locations with Revenue Online as soon as possible.
- Update your Sales Tax Software to ensure that taxes are properly classified for ease of filing/remitting.
- Update your customer records to ensure proper taxes are charged on invoices dated after 11-30-18.
- Contact any “self-collected” municipalities where you deliver taxable goods. Take the necessary steps to establish Sales Tax licenses where needed.
- Establish a plan for collecting the proper amount of sales tax for all new jurisdictions you may deliver to in the future before the first sale is made.
Please contact our office if you need assistance or have further questions.