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Colorado sales and use tax registration guide for online sellers

by TaxJar December 17, 2023

Please note: This blog was originally published in 2020. It’s since been updated for accuracy and comprehensiveness.

Sales tax is complicated, but a few states really take the cake when it comes to complexity. One of those states is Colorado.

Because we get so many questions from sellers on how to register and collect Colorado sales and use tax correctly, we thought we’d share our take. The below is based on consultation with the Colorado Department of Revenue and sales tax experts.

How Colorado wants online sellers to register & collect sales tax

Here are two common Colorado sales tax scenarios, and instructions on how Colorado wants online sellers to handle them:

Scenario 1:

You are located in Colorado and only make sales at your location – If you only hand over products to buyers from your location (i.e. a brick and mortar store, food truck, craft fair, etc.) then the state of Colorado wants you to register for a sales tax permit.

Scenario 2:

You are not physically located in Colorado but ship products to Colorado – If you are an online seller who has no location in Colorado but ships products to Colorado, then the state wants you to also register for a sales tax permit.

You can read more about in- and out-of-state retailer’s guide to filing sales tax on the Colorado Department of Revenue website.

Why is registering correctly in Colorado important?

For two reasons:

  • To collect sales & use tax correctly – Every state is different, and Colorado has specific rules you must follow in order to collect sales and/or use tax what they deem “correctly.”
  • To enroll in TaxJar AutoFile – If you want TaxJar to AutoFile your Colorado sales tax return for you, you must be registered for the Colorado sales tax permit.

For more information on registering for sales tax permits in Colorado, here’s our step-by-step guide. Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.

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