Frequently Asked Questions About Sales Tax in Colorado
In Colorado, sales taxes can be administered at both the state and local levels. State-collected taxes are managed by the Colorado Department of Revenue and apply to areas that are not home-rule cities. Home-rule cities have the authority to administer and levy their own sales and use taxes, which may have different rates, definitions, exemptions, and enforcement practices compared to state-collected taxes. This dual system can complicate compliance for businesses operating in multiple jurisdictions within Colorado.
Your business needs to collect sales tax in Colorado if it has a physical presence or meets the economic nexus thresholds in the state. Physical presence includes having an office, warehouse, or employees in Colorado. Economic nexus is established if your business has more than $100,000 in gross sales or 200 transactions in Colorado during the current or previous calendar year. Once nexus is established, you must register for a sales tax license and begin collecting and remitting sales tax on taxable sales.
To register for a sales tax license in Colorado, visit the Colorado Department of Revenue's website and complete the online registration process. You will need to provide information about your business, such as your business name, address, and federal employer identification number (FEIN). After registration, you will receive a sales tax account number to use when filing sales tax returns. STC can also help with this registration process.
Sales Tax Colorado offers audit assistance and advocacy, sales and use tax diagnostic reviews, exposure resolution, sales tax planning and consultation, and refund reviews and claims. They assist with licensing, collection obligations, delinquent returns, notices, audits, determining taxability, and more, with a special focus on Colorado’s complex sales tax system.
Sales Tax Colorado generally bills hourly under an engagement letter with a retainer. For specific services like handling bulk Voluntary Disclosure Agreements, they offer a fixed fee per jurisdiction with a fee cap. They strive to provide accessible services regardless of company size or budget.
Sales Tax Colorado serves various industries, including advertising, construction, financial services, hospitality, internet sales, IT services, oil and gas, manufacturing, pharmaceuticals, restaurants, retail, software, telecommunications, and more.
The team at Sales Tax Colorado consists of multi-state sales and use tax specialists who focus exclusively on sales and use tax issues. They have extensive training and experience in audit defense, exposure resolution, nexus determination, sales tax planning, and other related areas, providing in-depth expertise that general practitioners may not offer.
Sales Tax Colorado provides audit assistance by defending your business during audits, responding to notices, disputing assessments, requesting letter rulings, and refuting responsible person assessments. They aim to minimize assessments and ensure that your business does not provide excessive information to auditors, promoting a fair audit process.
A Voluntary Disclosure Agreement (VDA) allows businesses to voluntarily report and pay past due sales and use taxes, often with reduced penalties and a limited look-back period. Sales Tax Colorado can help businesses negotiate VDAs with tax authorities, minimizing penalties and interest, and efficiently resolving prior tax liabilities.
Yes, attorneys and accountants can engage Sales Tax Colorado to provide specialized sales and use tax services for their clients. Sales Tax Colorado collaborates with legal and accounting professionals to address sales and use tax issues, enhancing their clients’ success.