Sales tax compliance has always been a challenge for CO businesses. To make matters worse, effective Dec. 1, 2018, the Colorado Department of Revenue will adopt new sales tax rules. The new rules state that sales tax must be collected and remitted based on the jurisdiction’s tax rate at the point of delivery for the taxable good when taxable goods are delivered to a Colorado address outside the retailer’s jurisdiction. This applies to any applicable state-administered local and special district taxes, but currently does not apply to cities that administer their own sales taxes (home rule cities). For a complete list of cities and counties that this applies to see the attached document in the following link:
Nothing changes if all of your sales occur at your place of business. However, if you are shipping goods to a CO customer that is out of your taxing jurisdiction then you will need to withhold and remit the sales tax based on where the customer lives if it is on the attached list beginning on page four. The home rule cities that this new rule does not apply to are on page 8. However, the home city rules may adopt similar rules in the future.
For example, if you have a single business location in Denver and you ship goods to a customer in Keenesburg then you would need to collect and remit sales tax for Keenesburg where you would not previously have had to remit based on the old rules. The sales taxes can be remitted online when adopting the new rules. See the attached link on how to set up an account online as well as more information about this sales tax law change.