Colorado Sales Tax Changes for Out-of-State Retailers

Members are reminded that the grace period the Colorado Department of Revenue (DOR) extended to out-of-state retailers to comply with new sales tax collection rules ends on May 31, 2019. Starting, June 1, 2019, out-of-state retailers, including wineries, with substantial nexus must collect and remit Colorado state sales tax and state-collected local and special district sales tax.

Originally, the threshold for “substantial nexus” to require the payment of the tax was either $100,000 in annual sales or making more than 200 separate sales transactions directly to CO consumers annually. However, the permanent rules, effective as of April 14, 2019, removed the 200 separate transaction threshold. Under the new rules, ONLY wineries that have $100,000 or more of gross sales delivered in Colorado in the previous or current calendar year will be required to collect Colorado sales tax. Qualifying wineries should apply for a Sales Tax license by the end of the month in order to meet the June 1, 2019 deadline. Wineries not meeting the $100,000 annual sales threshold are not required to take any action.

More details on the sales tax changes for out-of-state retailers are available on the DOR website.