Sales Tax Colorado

Reading Room …

Information Worth Reading

Colorado Economic Nexus and Sourcing Emergency Rules Grace Period

by | Oct 30, 2018 | STC Blog | 0 comments

UPDATE 12/6/18 : The Grace Period has been Extended through May 31, 2019.

See the Colorado Department of Revenue (DOR) FAQs: Grace period and key facts​

 

UPDATE 11/26/18: (OBSOLETE) The State-wide Colorado sales tax collection Grace Period automatically extended to March 31, 2018 is now available to both in-state and out-of-state Retailers.  The Colorado Department of Revenue has made a change and has now included out-of-state retailers, but notes that noncollecting retailers must still abide by Colorado’s reporting requirements.

From the DOR’s FAQs:

What if I need more time to comply with the Dec. 1 deadline?

The destination sourcing rules will be implemented concurrently with the out-of-state retailer substantial nexus thresholds. We selected the Dec. 1, 2018 compliance date with that in mind. However, the Department will offer a grace period through March 31, 2019 to comply with the destination sourcing rules to ensure out-of-state retailers have sufficient time to make the required systems changes. Business will be granted a waiver from compliance with the destination-sourcing changes automatically until then.
 
A retailer that does not collect sales tax during this grace period must still comply with Colorado’s reporting statute: C.R.S. § 39-21-112(3.5). That statute requires non-collecting retailers to provide certain notices to individual Colorado customers and the Department regarding purchases where the retailer did not collect the tax. The reporting requirements for retailers that do not collect tax during the grace period will be strictly enforced. Non-collecting retailers seeking additional information about these reporting requirements should review the statute and Rule 39-21-112(3.5) in 1 CCR 201-1, which is available here.

UPDATE 11/5/2018: (OBSOLETE)

The State-wide Colorado sales tax collection Grace Period automatically extended to March 31, 2018 is only for In-State Retailers per a response I received from the Colorado Department of Revenue.

I also received information on the source of document noted below.  Loren Furman with the Colorado Chamber of Commerce (CACI) said it was a talking points document issued to Colorado Legislators.

Original Blog:

The Colorado Department of Revenue issued a notice about their recent Emergency Rules on Economic Nexus/ Wayfair and Sourcing which now require state-wide collection of all DOR administered local jurisdictions’ sales tax.

I written about the Grace Period in a prior Blog, but the DOR has now issued the notice: CO-Sales_Tax_Changes_Leg 2 10-26-18_Notice

It is still unclear that the Grace Period applies to out-of-state retailers.  The DOR’s website for in-state vendors had first noted the Grace Period under and FAQ.  There is no corresponding FAQ on the out-of-state retailer page.  In a Colorado DOR meeting with CACI that I attended, the grace period was addressed for in-state retailers.  The notice says “Who: All businesses that sell tangible goods to Colorado customers”, but it may have been sent only to in-state retailers.

I’ll provide an update when I’ve received clarification.