Colorado Sales and Use Tax Notice & Reporting Requirements

Colorado’s sales and use tax notice and reporting requirements for remote retailers…Still Alive! Previously, the District Court granted DMA’s motion for summary judgement and granted an injunction against the Department of Revenue from enforcing such requirement.  However, on February 22 the U.S. Court of Appeals for the Tenth Circuit held that the requirements do not violate the Commerce Clause.  In other words, (depending on any further litigation/appeals) Colorado can reinvigorate its efforts to force certain out-of-state retailers selling to in-state customers to:

1) notify Colorado customers that they are obligated to self-report and remit use tax on their purchases;

2) to provide Colorado customers with an annual report, detailing a customer’s purchases in the previous year;

3) notify the customer that the retailer was required to report the customer’s name and amount of purchases to the Department; and

4) report to the Department, the name, billing address, shipping address and total amount of purchases made by Colorado customers.

While Colorado has led the charge, many others states may jump on the reporting requirement band wagon.

Read Sutherland’s full legal alert outlining the background on Colorado’s Use Tax Reporting Requirements, District Court Ruling, Tenth Circuit Ruling, and the possibility of Future Congressional Intervention here.

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