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Colorado Destination-Based Sourcing Expansion

by DMADevelopers DMADevelopers | Oct 14, 2019

For businesses without physical presence in Colorado, the non-physical presence locations will continue to be used to report sales made into the state. However, there have been some changes for businesses with traditional, physical presence in Colorado. Following the enactment of economic nexus provisions, the state of Colorado will standardize their sourcing by shifting their sales tax calculations to destination-based for both in- and out-of-state businesses that exceed $100,000 in sales during a calendar year. The passage of HB 19-1240 also requires that the Colorado Department of Revenue provide a Global Information System (GIS) to allow businesses to look up the sales tax rate for an individual address. The GIS is to also include sales tax rates and boundaries for counties, municipalities, and special taxation districts. The small seller exception ($100K threshold) will sunset 90 days after the GIS system is operational. 

Starting June 1, 2019, sales in Colorado are taxed at their destination, not their origin, if the seller in question has exceeded $100,000 in sales in 2019. The Colorado Department of Revenue offers information pages for both in-state and out-of-state retailers.

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