State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Colorado (CO)

CO Sales Tax - Name of Tax and General Application:

Colorado imposes a tax on the sale and purchase of tangible personal property at the retail level in the state. This tax is called a "sales tax". In addition there is a tax on the use, consumption or storage of tangible personal property that has been purchased at retail in Colorado. This tax is called a "use tax" and only applies where sales tax does not apply or has not been applied.

CO Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Colorado requires retailers who sell, lease or deliver their products in Colorado for storage, use or consumption to pay use tax from the purchaser. This includes having property or utilities in the state, soliciting business through catalogs or other advertising in the state, or soliciting business by representatives or agents in the state.

CO Local Tax - Do Localities Impose Tax?

Yes, Colorado imposes local sales tax.

CO Resale Certificate Renewal Agreements:

The vendor must get enough information from the customer to provide proof that the purchase is for resale. This proof must include a current copy of the sales tax account number for any such customer.

CO Resale Certificate Renewal Periods

Colorado does not provide resale certificate forms. Instead, information regarding the purchase must be made available to any Department of Revenue representative.

CO Statute of Limitations

Three years from the date the tax was due. The limitation does not apply if no return is filed or if a fraudulent return is filed.