If you have ties to businesses in Colorado, including affiliates, you may have nexus. A business is presumed to be doing business in Colorado if it does business with, or is part of, an entity with a physical presence in Colorado that engages in any of the following activities:
- Sells taxable products or services under the same or similar business name as the out-of-state business
- Maintains an office, distribution facility, salesroom, storage place or similar place of business in Colorado to facilitate the delivery of taxable products or services sold by the out-of-state person
- Delivers, installs, assembles, maintains or repairs taxable products sold to in-state customers
- Facilitates the delivery of taxable products by allowing in-state customers to pick up products at an in-state facility
- Uses trademarks, service marks or trade names in Colorado that are the same or similar to those used by the out-of-state seller presumed to be doing business in Colorado.
However, this presumption does not apply to the following agreements or arrangements:
- Advertising: A person without a direct in-state physical presence purchases advertisements to be delivered in Colorado on television, radio, newspapers, magazines, the internet or any other mass-market medium
- Affiliate marketing agreements: Independent contractors or other representatives for a cost, commission or other consideration, directly or indirectly refer potential customers through internet promotional methods to the person without direct in-state physical presence
- Small businesses: Sales by the person without direct in-state physical presence to in-state customers in the prior calendar year are less than $50,000
The above affiliate nexus rules apply to state-administered local jurisdictions. Affiliate nexus provisions may or may not apply to Colorado localities that impose and administer their own taxes. For an example, see nexus rules for the City of Boulder.
