Colorado Sales Tax Notice and Reporting Requirements Clarified for Non-Collecting Retailers

The Colorado Department of Revenue has issued an emergency regulation in order to clarify how a retailer that does not collect Colorado sales tax must comply with notice and reporting requirements that became effective July 1, 2017. Every non-collecting retailer with total gross sales into Colorado of $100,00 or more in a calendar year must:

  • provide a Transactional Notice to all Colorado purchasers at the time of purchase;
  • provide an Annual Purchase Summary to all Colorado purchasers by January 31 of each year; and
  • provide an Annual Customer Information Report to the Department by March 1 of each year.

Transactional Notice

The Transactional Notice is required with every Colorado reportable purchase that is not exempt from Colorado sales and use tax. The Transactional Notice must contain the following information:

  • the retailer does not collect Colorado sales or use tax;
  • the purchase is not exempt from Colorado sales or use tax merely because it is made over the Internet or by other remote means; and
  • the State of Colorado requires purchasers to (1) file a sales or use tax return reporting all purchases that are taxable in Colorado and for which no tax was collected by the retailerand, (2) pay tax on those purchases.

The regulation also provides: details on the required placement of the Transactional Notice for both online purchases and all other purchases not made online; additional information that may be, but is not required to be, on the Transactional Notice; and penalties for failure to properly provide a Transactional Notice.

Annual Purchase Summary

A non-collecting retailer is required to send an Annual Purchase Summary to all Colorado purchasers whose total Colorado reportable purchases for the prior calendar year are $500 or more. The summary must be sent by January 31 of each year and must contain the following information:

  • the total amount paid by the Colorado purchaser, including any taxable shipping charges or other fees charged to the customer, during the prior calendar year. However, if the retailer is certain the charges and fees are not subject to tax in Colorado, those charges and fees may be excluded;
  • the State of Colorado requires the purchaser to file a sales or use tax return and pay tax on all taxable purchases for which no tax was collected by the retailer;
  • the retailer is required by law to provide the Colorado Department of Revenue with the total dollar amount of purchases made by the purchaser during the prior calendar
  • year, but no information about the purchase other than the dollar amount of the purchase(s) will be provided to the Department;
  • if available, the dates of each reportable purchase;
  • if available, the amounts of each reportable purchase, including any taxable shipping charges or other fees charged to the customer. However, if the retailer is certain that the charges and fees are not subject to Colorado tax, those charges and fees may be excluded;
  • if available, a description of the type of item(s) purchased (e.g. books, food, consumer electronics, etc.); and
  • if known by the retailer, whether the purchase is subject to or exempt from Colorado sales and use tax.

The regulation also provides details on penalties for failure to properly provide an Annual Purchase Summary.

Annual Customer Information Report

Any retailer who is required to provide at least one Annual Purchase Summary to a Colorado purchaser must, by March 1 of each year, file an Annual Customer Information Report with the Department containing the following information:

  • the name of each Colorado purchaser;
  • the billing address, notice address, and shipping address of each Colorado purchaser;
  • and
  • the total dollar amount of Colorado reportable purchases.

If all of a retailer’s sales are below the $500 threshold, then the retailer is not required to send the Annual Customer Information Report to the Department. However, if any of the retailer’s sales are above the $500 threshold, the retailer is required to submit the Annual Customer Information Report to the Department with all of the Colorado reportable purchases, including those purchases that were under the $500 threshold.

If the retailer made more than $100,000 worth of total gross sales in Colorado during the prior calendar year, then they are required to send the Annual Customer Information Report to the Department electronically. By November 1st of each year the Department will publish instructions on its website regarding how to properly file the electronic report. The regulation also provides details on penalties for failure to properly file an Annual Customer Information Report.



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