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Colorado: Reporting Requirements for Non-Collecting Retailers


 Colorado: the injunction against non-collecting retailers' reporting requirements has been dissolved.

The Colorado Department of Revenue has published a notice regarding Non-Collecting Retailer Reporting Requirements. It pertains to the 2010 law (HB 10-1193) that created reporting requirements for retailers not collecting tax on Colorado sales. The law was challenged and a federal court issued “an injunction enjoining the Department’s enforcement of the law and regulations.”

On December 10, 2013, the injunction was dissolved. Out-of-state retailers must therefore comply with the law in the manner outlined by Colorado Department of Revenue Regulation 39-21-112.3.5.

According to the regulation, non-collecting retailers making at least “$100,000 in total gross sales in Colorado in the prior calendar year” must “give notice to all Colorado purchasers that Colorado sales or use tax is due on all purchases that are not exempt from sales tax.” The regulation provides definitions for “Retailer that does not collect Colorado sales tax,” “Colorado purchaser,” “Colorado purchase,” and “Obligation to give notice with each purchase.”

Penalties waived

Because the law has been under an injunction, the department will not:

  • Enforce any penalties for failure to comply during the period the injunction was in place” (calendar years 2010-2013);
  • Assess penalties for a retailer’s failure to comply with the January 31, 2014 deadline to provide annual purchase summaries to their customers;
  • Assess penalties for a retailer’s failure to comply with the March 1, 2014 deadline to provide the annual report to the Department for their 2013 purchases.”

Another challenge

Colorado’s non-collecting retailer reporting law has overcome one challenge. However, the Direct Marketing Association continues to fight the law and is seeking “a preliminary injunction against enforcement of the law” in state district court. The Department of Revenue is “cognizant” of this and promises to review the scope of the injunction should one result from the legal challenge. If and when that occurs, “further guidance” will be provided.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.