On February 22, 2017, the Data and Marketing Association and the Colorado Department of Revenue reached a settlement in the lawsuit challenging the Colorado sales/use tax reporting requirements for remote (i.e., non-Colorado) retailers. Under the agreement, Colorado will start enforcing its sales tax reporting rules against non-Colorado retailers beginning on July 1, 2017. 

This means that retailers without a physical presence in Colorado (and thus do not have to collect Colorado sales/use tax) will still be required to file reports with Colorado concerning their sales to customers in the state, including submitting customer information; notifying customers of their requirement to pay Colorado sales/use tax on purchases; and sending customers an annual summary of purchases to facilitate the payment of Colorado sales/use tax. 

Failure to send these reports and notices will subject the remote retailer to substantial fines and penalties by Colorado. Therefore, non-Colorado retailers that market to customers in Colorado by email, mail or otherwise should be prepared for these new reporting requirements.

Note: Retailers with less than $100,000 in annual sales in Colorado will not have to file an annual report with Colorado. Additionally, retailers are not required to send an annual summary of sales to customers with $500 or less in purchases.

For Further Information

If you would like more information on how this may affect your company, please contact Stanley R. Kaminski, any other member of the State and Local Tax Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.