As an organization, we worked hard during the legislative session with lawmakers to try and create a destination sourcing sales tax system that small retailers could actually comply with. The compromise reached is not perfect but does offer some relief. To avoid confusion and the possibility of misinformation about this complex rule that is further complicated by all of the local and special taxing jurisdictions in the state, we are publishing information that has been posted on the Colorado Department of Revenue website.
Destination Sourcing:
Beginning June 1, 2019, sales tax will be calculated based on the buyer’s address when the taxable product or service is delivered to the consumer. This is called destination sourcing. Businesses will now be required to collect and remit sales tax for all retail sales to Colorado consumers, regardless of the physical location for the business. Exceptions to the new sales tax law may apply to small businesses and marketplace sellers. Information regarding exceptions to the new sales tax is below. For a complete list of location/jurisdiction codes for sales tax filing, see form DR0800 on the Department of Revenue website.
Temporary Exceptions for Small Businesses:
HB19-1240 provides an exception to destination sourcing for small businesses physically located in the state of Colorado that have less than $100,000 in sales to within Colorado during the previous calendar year. Such sellers may source their sales to the business location of the seller and collect all applicable state-administered and special district taxes for their business’s jurisdiction. This is called origin sourcing.
Click here to download the full version of the Grand Junction Area Chamber of Commerce July 2019 Newsletter.