Small retailer exception
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. All retail sales are considered for the
purpose of the $100,000 threshold, regardless of
whether those sales would be subject to Colorado tax.
See Part 1: Retail Sales for rules for determining the
location of a sale.
If the retailer’s retail sales in Colorado in the previous
year were less than $100,000, then the retailer must
begin collecting sales tax if its retail sales into Colorado
during the current calendar year exceed $100,000. 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 fails to obtain a sales tax
license and begin collecting sales tax within the
prescribed period of time, the retailer is nonetheless
liable for all applicable state and state-administered
sales taxes for any subsequent sale made into Colorado.
If the retailer’s Colorado sales in the previous year
exceed $100,000, the retailer is subject to Colorado
sales tax licensing and collection requirements for the
entire calendar year.
The following examples demonstrate the application of
the small retailer exception for retailers who maintain
no physical location in Colorado.
Example #1
A retailer maintains no physical location in Colorado.
During the previous calendar year, the retailer’s retail
sales in Colorado exceeded $100,000. As a result, the
retailer is doing business in Colorado and is required to
obtain a Colorado sales tax license and collect sales tax
on all sales made in Colorado during the entire current
calendar year.
Example #2
A retailer maintains no physical location in Colorado.
During the previous calendar year, the retailer’s retail
sales in Colorado were less than $100,000. 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.
On June 15
th
of the current year, the retailer’s
cumulative retail sales in Colorado for the current year
exceed $100,000. 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. Consequently, the retailer must obtain a
Colorado sales tax license and begin collecting sales tax
on any retail sale the retailer makes in Colorado no
later than October 1
st
of the current year.
Since the retailer’s sales in Colorado in the current
year exceed $100,000, the retailer will be required to
maintain a sales tax license and collect sales tax on all
sales made in Colorado in the following year.
Example #3
A retailer maintains no physical location in Colorado.
During the previous calendar year, the retailer’s retail
sales in Colorado were less than $100,000. As a result,
the retailer is not considered to be doing business in
Colorado and is not required to collect sales tax on
sales made in Colorado as the current year begins.
On November 15
th
of the current year, the retailer’s
cumulative retail sales in Colorado for the current year
exceed $100,000. Since there are less than 90 days
remaining in the current year after the retailer’s
cumulative sales in Colorado exceeded $100,000, the
retailer is not required to collect sales tax on any sale
made in Colorado during the current year.
However, since the retailer’s retail sales in Colorado in
the current year exceed $100,000, the retailer must
obtain a Colorado sales tax license before January 1 of
the following year and collect sales tax on all sales
made in Colorado during the following year.