Any claim for refund or credit must be made using the applicable Department form(s) and submitted to the Department within three years from the due date of the return on which the overpayment was made or within one year of the date of overpayment, whichever is later. If the purchaser is claiming exemption as a retailer, wholesaler, or tax-exempt organization, or as a contractor purchasing building materials for a tax-exempt construction project, the retailer must verify that the purchaser’s sales tax license or exemption certificate is current and valid at the time of the sale and can do so online at Colorado.gov/RevenueOnline. A transaction involving taxable property is a sale whether the seller acts on her own behalf or as the agent for another party. This temporary exception will expire 90 days after the Department has made a geographic information system (GIS) available to the public on the Department’s website. Department publication, For any purchaser claiming exemption as a retailer, wholesaler, or tax-exempt organization, the retailer must verify that the purchaser’s sales tax license or exemption certificate is current and valid at the time of the sale. However, Colorado law exempts several types of tangible personal property from sales tax. Our Colorado Sales Tax Guide will give you the confidence to effectively manage your Colorado sales tax from beginning to end. See Department publication Sales & Use Tax Topics: Leases for sourcing rules for lease payments. This. If a retailer ceases to maintain any place of business in Colorado, the retailer may no longer be doing business in Colorado, depending on its other activities within Colorado, as described below in, Retailers with no physical location in Colorado. The sourcing rules described in this section apply to both state and state-administered local sales taxes. Colorado generally does not impose a state sales tax on services. Additional penalties may be imposed for negligence or fraud. Retailers whose prior year state sales tax collection did not exceed the $75,000 threshold may nonetheless elect to remit sales taxes via EFT. The Colorado Department of Revenue does not administer use taxes for any city or county. Any sale made in Colorado may also be subject to state-administered local sales taxes. Individuals and businesses with specific questions should consult their tax advisors. If the retailer issues the buyer a receipt, invoice, or other document setting forth the purchase price, the retailer must separately state the tax on such document. See, A retailer that relies on the Department’s GIS database, a third-party database that is verified to use the most recent information provided by the GIS database, or a certified electronic address database and claims relief from liability based upon such reliance must retain records sufficient to demonstrate proper use of and reliance on the database. Any retailer who does not maintain a physical location in Colorado is exempted from state sales tax licensing and collection requirements if the retail sales of tangible personal property, commodities, and/or services made annually by the retailer into Colorado in both the current and previous calendar years are less than $100,000. See, obtains tangible personal property from the retailer to sell on the retailer’s behalf; or. In addition to the income tax credits discussed in this guide, state law authorizes sales and use tax exemptions for machinery and machine tools used solely and exclusively in enterprise zones. Short-term rentals of rooms and accommodations are also subject to Colorado sales tax. A purchaser who holds a direct payment permit (a “qualified purchaser”) assumes responsibility for remitting all applicable sales taxes directly to the Department and not to the retailer. The following is a list of statutes, regulations, forms, and guidance pertaining to sales tax collection. However, the allowable percentage for local service fees varies by jurisdiction. Individuals and businesses with specific questions should consult their tax advisors. Contents of sales tax ordinances. Additionally, otherwise nontaxable services may be subject to sales tax if they are provided as part of a transaction involving the sale of tangible personal property. The tax due constitutes a part of the price or charge and, until paid by the purchaser to the retailer, is a debt from the purchaser to the retailer that is legally recoverable in the same manner as other debts. USE TAX. On June 15th of the current year, the retailer’s cumulative retail sales in Colorado for the current year exceed $100,000. Under this exception, all of a small retailer’s sales will be sourced to the retailer’s business location, except that any sale delivered to a location outside of Colorado will not be sourced to Colorado. for information about penalties and interest. In general, a sale takes place within a state-administered local taxing jurisdiction if it is delivered to the purchaser at a location within that jurisdiction. See Part 4: Retailers Who Must Collect and Part 8: Local Sales Tax for additional information regarding state and local sales tax collection requirements. Retailers required to collect Colorado sales tax are also required to collect any applicable state-administered local sales taxes on any sales made at the retailer’s location in Colorado, as well as on any sales delivered in Colorado. As a result, the retailer is not considered to be doing business in Colorado and is not required to collect sales tax as the current year begins. The tax applies to any charge paid for the use, possession, or the right to use or possess any room in a hotel, apartment hotel, lodging house, motor hotel, guesthouse, guest ranch, trailer coach, or mobile home and to any space in any camp ground, auto camp, or trailer court and park, under any concession, permit, right of access, license to use, or other agreement, or otherwise. Any retailer who sells their retail business to another retailer must collect sales tax from the purchaser on any tangible personal property, other than inventory, transferred to the purchaser as part of the sale. A statement of the tax rate only is not sufficient. The purchaser must ensure that seller has satisfied all sales tax liabilities of the business and assumes the liability for any unpaid sales taxes. All sums of money paid by the purchaser to the retailer as sales taxes are and remain public money and the property of the State of Colorado, or the appropriate local jurisdiction, in the hands of such retailer. The retailer must apply for and obtain a sales tax license and begin collecting Colorado sales tax by the first day of the first month commencing at least 90 days after the retailer’s aggregate Colorado sales in the current year exceed $100,000. If a retailer contracts with a certified database provider or a third-party database that is verified to use the most recent information provided by the Department’s GIS database for a “hosted” or “on premise” solution that integrates database utilization into the retailer’s billing system, the contract in effect at the time of the sale will demonstrate the retailer’s reliance on the database with respect to the sale. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. However, the Department does not administer and collect sales taxes imposed by certain home-rule cities, which instead administer their own sales taxes. See Department publication Sales & Use Tax Topics: Motor Vehicles for additional information. A retailer must also retain copies of any of the following forms the retailer has accepted from an out-of-state purchaser: Standard Colorado Affidavit of Exempt Sale (DR 5002), Sales Tax Exemption Certificate (DR 0563), or Multistate Tax Commission Uniform Sales & Use Tax Exemption/Resale Certificate. However, Colorado law exempts several types of tangible personal property from sales tax. Please visit colorado.gov/pacific/tax/sales-tax-GIS for additional information about the Department’s GIS. The retailer must retain a copy of the completed exemption form. If the retailer does not issue a document that sets forth the purchase price, then the retailer must disclose the tax of each item on signage clearly visible to the purchaser. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. Phone: (719) 385-5903 Fax: (719) 385-5291 Email Sales Tax Payments made on a weekend or legal holiday are treated as paid before 4:00 P.M. of the next business day. However, the Department does not administer and collect sales taxes imposed by certain home-rule cities that instead administer their own sales taxes. As a result, the retailer’s sales will be sourced under the origin sourcing rules as the current year begins. There are additional levels of sales tax at local jurisdictions, too. Examples of intangible personal property include the following: Colorado does not generally impose sales tax on services. Individuals and businesses with specific questions should consult their tax advisors. A retailer will only qualify for origin sourcing if the retailer’s total retail sales of tangible personal property, commodities, and/or services in Colorado during the previous calendar year were $100,000 or less. This, If a retailer overpays any tax due, the retailer may either claim a credit on a subsequent return or request a refund for the overpayment. The following is a list of statutes, regulations, forms, and guidance pertaining to the calculation of tax on sales of tangible personal property. If a purchaser asserts that the sale qualified for exemption and the tax was collected by the retailer in error, the retailer may claim a refund or credit on behalf of the purchaser, but is not required to do so. See the Colorado Sales Tax Guide for additional information. Exemptions County, Municipality, and Special District Sales/Use Tax Exemptions Options: If an exemption is not listed, state-collected local jurisdictions do not have that exemption option. In general, leases of tangible personal property are considered retail sales and are subject to Colorado sales tax. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. the net proceeds from the charitable organization’s otherwise taxable sales in the current calendar year are less than $45,000. This publication is designed to provide retailers with general guidance regarding sales tax licensing, collection, filing, remittance, and recordkeeping requirements prescribed by law. Land and buildings are real property. An associated service charge is separately stated if it appears as a distinct line item on a written sales contract, retailer’s invoice, or other written document issued in connection with the sale, apart from the price of the property sold. In general, leases of tangible personal property are considered retail sales and are subject to Colorado sales tax. A retailer is liable for the tax due even if the retailer has failed or refused to obtain a Colorado sales tax license. the funds raised through the sales are retained by the organization to be used in the course of the organization's charitable service; the net proceeds from the charitable organization’s otherwise taxable sales in the preceding calendar year were less than $45,000; and. On November 3, 2015, Colorado Springs voters approved a sales and use tax rate increase of 0.62% to fund road repair, maintenance and improvements. The following examples demonstrate the application of the small retailer exception for retailers who maintain no physical location in Colorado. Well, speaking of Colorado, the general sales tax is 2.9%. House Bill 20-1023 - Concerning certain address database systems used for sales and use tax collection. The retailer must apply for and obtain a sales tax license and begin collecting Colorado sales tax by the first day of the first month commencing at least 90 days after the retailer’s aggregate Colorado sales in the current year exceed $100,000. If the retailer’s average or estimated monthly state sales tax collection is less than $300, the retailer will be required to file returns and remit tax on a quarterly basis. If a retailer properly uses the GIS database, a third-party database this is verified to use the most recent information provided by the GIS database, or a certified electronic address database to determine the local jurisdictions to which tax is owed for a given sale, the retailer will not be held liable for any local sales tax the retailer failed to properly collect solely as a result of an error or omission in the database. The deduction is allowed to be retained by the business to provide assistance from business disruptions due to COVID-19 pandemic. Intangible personal property constitutes mere rights of action with no intrinsic value. Colorado has a destination-based sales tax system, * so you have to pay attention to the varying tax rates across the state. Retailers may claim either a refund or credit for an overpayment of tax made with a previously filed return and the Department may assess any additional tax due, but not previously reported and paid. The information in the following sections does not apply to the calculation of sales tax imposed on the following sales: For sales of tangible personal property, the sales tax is calculated on the full purchase price. Filing Frequency & Due Dates. Colorado state sales tax is imposed at a rate of 2.9%. City and County of Denver, Colorado. Additional information regarding licensing and filing requirements for mobile vendors can be found online at Colorado.gov/Tax. The retailer must collect the tax if the retailer has reason to doubt that a purchase is: In the case of a sale to a tax-exempt organization or governmental entity, the retailer must also verify that the purchase is made directly from the funds of the organization or entity claiming the exemption. Any claim for credit must be made with the Colorado Retail Sales Tax Return (form DR 0100) and any refund claim must be made with the Claim for Refund (form DR 0137). The Tax Guide covers the following topics: Advertising agencies; Agents, salespersons, auctioneers, and manufacturer's representatives ... city of pueblo colorado. Individuals and businesses with specific questions should consult their tax advisors. Any retailer that is required to collect sales tax, as discussed in Part 4: Retailers Who Must Collect, must apply for and obtain a sales tax license prior to making any sales. The following is a list of statutes, regulations, forms, and guidance pertaining to recordkeeping requirements. See Part 7: Filing and Remittance and the Colorado Retail Sales Tax Return (DR 0100) for additional information. Colorado imposes sales tax on retail sales of tangible personal property. Direct pay permits issued by the Department have the words “Direct Pay Permit” in the upper left corner. For tax purposes, coupons are classified as either manufacturer's coupons or store coupons. Retailers are required to remit, with the filing of each return, all tax reported on such return, minus any service fee allowed to the retailer. The, The Department owns and maintains a publicly accessible geographic information system (GIS) and certifies qualifying electronic address databases that retailers can use to determine the local taxing jurisdictions to which taxes is owed and to calculate appropriate sales and use tax rates for individual addresses Additional information about the GIS database and a list of certified electronic address databases can be found online at, If a retailer properly uses the GIS database, a third-party database this is verified to use the most recent information provided by the GIS database, or a certified electronic address database to determine the local jurisdictions to which tax is owed for a given sale, the retailer will not be held liable for any local sales tax the retailer failed to properly collect solely as a result of an error or omission in the database. This Part 10 provides information regarding refund claims, assessments, and the period of time allowed by law for both. Consequently, any retail sale the retailer makes on or after October 1st of the current year will be sourced using the general destination sourcing rules. solicits business on behalf of the retailer. A retailer submitting a refund claim bears the burden of proving the appropriate exemption of any sales that are the subject of the claim. If the seller relies on a physical copy of the license or certificate for verification, the seller must retain a copy of the document for their records. A description of the taxpayer's activities and the date the activities began; 2. If, upon examination of a filed return, the Department determines the correct amount of tax has not been paid, the Department will issue a notice of deficiency to the retailer. If a retailer does not collect tax on a sale because the purchaser holds a direct payment permit, the retailer must retain a copy of the direct pay permit. See Department publication. A retailer maintains no physical location in Colorado. Special event license requirements apply to sellers participating in the event regardless of whether such sellers have been issued a standard retail sales tax license for their regular business location. A seller participating in the event may make this election even if the seller has obtained a special event license of their own. In general, the tax does not apply to sales of services, except for those services specifically taxed by law. See Part 7: Filing and Remittance for information about penalties and interest. If the charge for the maintenance agreement or warranty is both separately stated and separable, the charge is not subject to tax. A sale by a wholesaler or jobber to an end user or consumer is a retail sale and not a wholesale sale. Retailers are liable and responsible for state sales tax equal to 2.9% of their total taxable sales, regardless of whether the retailer actually collected such tax, as well as any tax collected in excess of this amount. SOFTWARE. Any retailer that is required to collect Colorado sales tax must obtain and maintain a Colorado sales tax license. A retailer must exercise due diligence with respect to any sale for which the purchaser claims exemption from sales tax. See the Colorado Sales Tax Guide for additional information. Such documentation must reflect the physical address in question, the jurisdiction(s) identified by the database for the address, and the date that such information was accessed. In general, the tax does not apply to sales of services, except for those services specifically taxed by law. If the retailer does not issue a document that sets forth the purchase price, then the retailer must disclose the tax of each item on signage clearly visible to the purchaser. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. Some Colorado home-rule cities (that collect their own local sales tax) charge a sales tax on certain services. If the written agreement to sell the business is a lump sum transaction that does not separately state the purchase price for the tangible personal property included in the sale, the sales tax is based on the book value set up by the purchaser for income tax depreciation purposes or, if no such value is established, the fair market value. The retailer must include with their return the sales tax due for any tangible personal property, other than inventory, transferred to the purchaser as part of the sale of the business. A wholesaler that makes retail sales in addition to wholesale sales is subject to the same filing requirements as retailers and must file returns and remit tax monthly or quarterly, as applicable, unless the wholesaler has received permission to file less frequently. 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