SALES & USE TAX QUESTIONS ACCOUNTANTS SHOULD ASK THEIR CLIENTS
January 2018
Your clients trust you to help them with their accounting and tax needs, but what about sales and use tax issues? This is a huge and complicated area of tax law, especially in Colorado !
Help Clients Avoid Costly Audits and Resolve Prior Liabilities
We know many accounting firms don’t want to handle sales and use tax issues and cringe at the thought, but your clients need help. Sales Tax Colorado, LLC can help your clients stay or get in compliance and resolve prior liabilities.
We’ve included five key questions with a link to important discussion points below to help accountants help their clients discover and understand common sales and use tax pitfalls:>>> continue
WHICH LOCAL SALES TAX DO YOU HAVE TO COLLECT IN COLORADO?
November 2017
We Only Have One Location. Do We Have To Collect For Other Areas? (The answer is often, “Yes “! )
The answer depends upon where you are “doing business” in Colorado and what those business activities entail.>>> continue
COLORADO DOR ANNOUNCES 2017 LOCAL TAX CHANGES
December 2016
The Colorado Department of Revenue Posted Local Tax Changes Effective January 1, 2017.
Several Colorado state-collected and home-rule jurisdictions tax changes will take effect January 1st, 2017. Businesses should update their billing systems accordingly.>>> continue
SALES TAX COMPLIANCE SOLUTIONS FOR QUICKBOOKS
March 2015
How Can QuickBooks Users Handle the Complexities of Sales and Use Tax Compliance?
Many businesses choose QuickBooks for a low-cost accounting system, but what about handling complex sales and use tax issues? We’ll address some of the specific difficulties in Colorado, but the solutions apply to other states as well.>>> continue
EXTENDED WARRANTIES, MAINTENANCE AGREEMENTS &SERVICE CONTRACTS
February 2015
Conflicts between Colorado State and Home-Rule Cities Result in Audit Assessments
Across the country, a common issue in determining the taxability of Extended Warranties and Maintenance Agreements is whether or not such service contracts are optional or mandatory. If they are included in the purchase price or are otherwise required as part of the purchase, they are generally considered as taxable.>>> continue
TEXAS ADOPTS NEW LOCAL TAX RULE (§3.334)
December 2014
Rule Addresses Texas Local Sales and Use Tax Determination, Collection, Accrual, and Remittance
The new Texas local tax rule addresses the following local tax topics>>> continue
DENVER UPDATES SOFTWARE TAX GUIDE
October 2014 supplement
Does Denver Tax Software?
Yes! Denver differs from Colorado State. Denver taxes software regardless of whether or not the software is canned or custom, on disk or downloaded, considered Cloud Computing SaaS or otherwise. This is often unknown until a business is audited and results in small audit assessments to those from the low hundreds of thousands to the multi-million dollar level on this issue. Software is also a complicated area sales and use tax. Denver has just updated their Tax Guide Topic No. 18 Data Processing to help clarify the issues.>>> continue
SALES TAX and FULFILLMENT BY AMAZON
October 2014
Do FBA Vendors Have To Collect Sales Tax For Multiple States?
Yes! Amazon is acting as your agent in the states in which it has fulfillment centers.
You send your products to Amazon’s fulfillment centers. Amazon stores your products. Customers purchase your products and Fulfillment by Amazon picks your products from inventory, packages them, ships your products from their network of fulfillment centers and provides support. These are generally considered nexus triggering activities allowing states to require you to collect their sales tax.>>> continue
COLORADO – SALES TAX EXEMPTION ON MANUFACTURING EQUIPMENT
March 2014
Changes Effective January 1, 2014
The Colorado Department of Revenue published revisions to two FYI noting changes that made the sales and use tax base of the Regional Transportation District (RTD) and the Scientific and Cultural District (CD) the same as the state sales and use tax base. The RTD and CD did not previously exempt Machinery and Machine Tools.>>> continue
COLORADO PROPOSES CHANGES TO MEDICAL MATERIAL, EQUIPMENT, AND DRUGS 39-26-717 1 CCR 201-4
February 2014 – Supplemental
Public Hearing to be held March 5th, 2014
The Definition of “Prosthetic Devices” be may changed!
The language to be struck is “A “prosthetic device” is an artificial part which aids or replaces a bodily function and which is designed, manufactured or adjusted to fit a particular individual. The foregoing descriptions also apply to prescription drugs and prosthetic devices for animals.”
The Proposed Changes may have significant impact on the medical services industry and their vendors. We recommend involvement in the hearing process.>>> continue
COLORADO’S RECOMMENDATIONS FOR A UNIFORM SALES AND USE TAX BASE THROUGHOUT THE STATE
February 2014
Joint Efforts Made to Simplify Sales and Use Tax in Colorado
The Colorado Department of Revenue recently published its recommendations Uniform Sales and Use Tax Base Throughout the State. Some report excerpts are as follows: “Currently, Colorado has nearly 300 taxing authorities with differing sales and use tax bases, but when overlapping boundaries are taken into account, there are over 700 areas with different rates and bases. This situation produces a heavy burden on businesses operating in our state>>> continue
COLORADO STATE-COLLECTED LOCAL SALES AND USE TAX
January 2014
When Do I Have to Collect Local Taxes? What about Home-Rule Cities?
How Do I Report State-Collected Local Taxes for Multiple Locations?
Retailers are to collect all applicable taxes within the boundaries of their taxing jurisdictions. These can include sales tax for Colorado State, most counties, state-collected (“Statutory”) cities, and any applicable special districts such as the RTA, RTD and Scientific/ Cultural District and others.
If you do business including performing services, soliciting sales, delivering or installing goods, renting or leasing, etc. in other cities, counties or special districts the situation gets far more complicated!>>> continue
OUT-OF-STATE RETAILERS REPORTING REQUIREMENTS
December 2013
CO HB 10-1193 Out-of-State Retailers Reporting Requirements
Injunction Dissolved December 10, 2013 – Now What?
The Colorado Department of Revenue provided guidance in an email notice on December 19, 2013.>>> continue
OCCUPATION PRIVILEGE TAX
November 2013
Doing business in Colorado? Check for OPT!
What is it? Does it apply to me?
An Occupation Privilege Tax “OPT” is a head tax. It is generally imposed upon employees and businesses or business owners for the privilege of doing business in some Colorado Home-Rule Cities such as Aurora, Denver, Glendale, Greenwood Village, and Sheridan. OPT is often an unknown tax until and an auditor assess tax, interest and penalties. There are generally thresholds for tax on employees, but a business or business owner may have a tax imposed for each month in which that entity has any activity in a city related to its business, trade, occupation, or profession, regardless of whether a permanent location is maintained in that city.>>> continue
TAX FILING & PAYMENT RELIEF FOR FLOOD VICTIMS Updated – October 21, 2013
October 2013
Was your business affected by the floods?
The Colorado Department of Revenue will postpone filing and payment deadlines to Dec. 2, 2013 and will waive penalty and interest for all taxes for taxpayers and tax professionals directly impacted by the severe storms, flooding, landslides and mudslides during September 2013.>>> continue
BUYING OR SELLING A BUSINESS IN COLORADO
September 2013
Is the business you are purchasing current on its sales, use and other taxes?
When a business is purchased the seller must pay any sales taxes due within 10 days of the sale. The new business owner may become liable for any unpaid tax due on the sales made by the previous owner if the taxes are not remitted. Note: Discovery of seller’s errors and a prior liability through an audit of prior periods under may not occur for a number of years.>>> continue
COLORADO VOLUNTARY DISCLOSURE AGREEMENTS
August 2013
What If You Didn’t Handle Sales Tax Properly?
- Proper sales tax not collected
- Consumer Use Tax not remitted (Use Tax impacts nearly all businesses!)
- Not licensed everywhere required
- Not filing all required tax types
- Collecting but not remitting tax – very serious!
Act quickly before the State or local home-rule cities contact you and your options are limited! But act with caution.>>> continue
COLORADO STATE SALES and USE TAX AUDITS
July 2013
What Should You Expect?
Colorado differs from most other states in that local jurisdictions can be State-collected (Statutory) or home-rule (self-administered). The Colorado Department of Revenue (DOR) is responsible for collecting and administering Colorado State sales and use tax, local sales taxes for all statutory cities, counties and special districts that impose a sales tax and various other taxes.>>> continue
COLORADO BUSINESS CONSUMER’S USE TAX
May 2013
What Is It? Does It Apply To Me?
Both businesses and individuals are to pay use tax upon purchases when a seller did not collect sales tax. Purchases made over the Internet or from out-of-state vendors that don’t have an obligation to collect sales tax for the purchaser’s state or local jurisdictions are common examples of when use tax may be owed. In Colorado, home-rule cities add to the complexity and increased obligation to self-assess, accrue and remit use tax. Note: Internet purchases are not tax free. The vendor may not have an obligation to collect sales tax, but the purchaser will likely still owe use tax.>>> continue
COLORADO – EXPANDED NEXUS PROVISIONS INTRODUCED
April 2013 – Supplemental
HB13-1312 Introduced 4/16/2013
A Bill For An Act Concerning The Circumstances Under Which A Person Who Sells Items Subject To Sales Tax Must Collect Such Sales Tax On Behalf Of The State. >>> continue
COLORADO EXTENDS SALES AND USE TAX REFUND DEADLINE
April 2013
What is the New Deadline?
The new sales and use tax refund application deadline for Colorado is three years after the 20th day of the month following the date of the purchase for sales tax refunds or following the date of initial storage, use or consumption in Colorado by the use tax refund applicant. >>> continue
DENVER SALES AND USE TAX AUDITS
March 2013
What Should You Expect?
Denver is a home-rule city and county combined that administers its own tax code and conducts its own sales and use tax audits. Taxpayers are often surprised by their assessment and by what Denver taxes. Denver’s tax code and exemptions differ from Colorado State’s code. >>> continue
SALES TO MEDICAL AND DENTAL SERVICE PROVIDERS IN COLORADO
February 2013
CO State Exempted Sales May Still Be Taxable! Beware of Use Tax!
There are several important issues for vendors of medical supplies and equipment and for medical and dental service providers to address. Colorado home-rule city exemptions often differ from the State’s exemptions. Home-rule cities have their own tax codes and commonly tax goods and services that the State exempts. >>> continue
