Colorado Politics

Just in time for the holidays, sales tax collection for Coloradans who order online

Coloradans, get ready to pay sales tax at your favorite online retailers, if you aren’t already – just in time for Black Friday and the holiday shopping season.

The Colorado Department of Revenue will require retailers who do business in Colorado to obtain a sales tax license and collect sales taxes from purchasers here, the department announced.

The change in policy comes as a result of South Dakota v. Wayfair, Inc., a case involving an online home decor store, in which the Supreme Court struck down the requirement that a retailer have a physical presence in a state if it’s to be required to collect sales tax.

“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,” said the department’s executive director, Michael Hartman.

“We will pave the least burdensome road possible for businesses to comply with these regulations,” he added.

Colorado purchasers already were supposed to pay a “consumer use tax” on online purchases from out of state when a sales tax wasn’t charged, but that often didn’t happen.

The announcement doesn’t affect online retailers that have physical presences in Colorado like Amazon.com Inc. and Walmart Inc.; they’re already collecting state sales tax on online orders.

The department has “no solid number” regarding online retailers with no physical presence in Colorado who do business in the state, a department spokesman said Wednesday via email.

“Many retailers have voluntarily complied under the old standard, even without physical presence,” he added.

Smaller retailers whose in-state sales do not exceed $100,000 or 200 transactions annually will not be required to collect sales tax, according to the release.

Out-of-state retailers who do not qualify for the exception must register for a Colorado sales tax license by Nov. 30 and may do so as early as Nov. 1. They are not required to collect state sales tax prior to the deadline, according to the release.

Just in time for the holidays, sales tax collection for Coloradans who order online
(Photo by Jenny Kane, Associated Press)
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