Colorado Use Tax

[electronman1729]

Anyone else get the notice in the mail about online purchase's from retailers?

Last time I do business with new egg.

[Delfuego]

Yep B&H photo. Last time I use them...

[TheGrey]

Really? Damn. I'll keep an eye out on the mail.

[Zundfolge]

Before y'all start boycotting your favorite online retailers, the law changed recently and now they have to report your untaxed purchases to the greedy little fuckers.

[Eric P]

Hopefully palmeto state and midway doesn't comply. Time to repeal the use tax. It makes no sense since the tax does not support the infrastructure of the selling business. Roads already supported by gas tax and p.o. is self sufficient..

[DenverGP]

Any retailer who makes more than $100,000 per year in sales in Colorado and does not collect Colorado sales tax is required to send an annual use tax notification to all Colorado customers and to the state of Colorado.

This notification should be sent to each customer by January 31 of the following year and include the following:
date of the purchase(s)
amount and category of the purchase(s)
whether or not the purchase(s) was tax exempt (if known by the retailer)

The seller must also send the following to the Colorado Department of Revenue by March, 1:
names of all Colorado customers
addresses of all Colorado customers
date of the purchase(s)
amount and category of the purchase(s)
whether or not the purchase(s) was tax exempt (if known by the retailer)

Failure to send this notification will result in a penalty of $5 per customer.



https://blog.taxjar.com/use-tax-notification-law/

[Gman]

This thread is like deja vu all over again.

[KevDen2005]

Yep, wife got one from Zulily. I let her know not to buy anything else from them.

[ben4372]

Well, more Colifornia. The amount of money the state and everyone down the line wants is crazy. My Property taxes went up 30 percent. That was based on a valuation from 2016. I can only imagine what next year will be. I heard a bit on the radio about Colorado tying to stop the military retirees from leaving. Colorado is turning into an expensive hassle. My guess is it cost them almost as much to enforce this as they make in revenue.

[KevDen2005]

Well, more Colifornia. The amount of money the state and everyone down the line wants is crazy. My Property taxes went up 30 percent. That was based on a valuation from 2016. I can only imagine what next year will be. I heard a bit on the radio about Colorado tying to stop the military retirees from leaving. Colorado is turning into an expensive hassle. My guess is it cost them almost as much to enforce this as they make in revenue.

Although not military I have no plans to retire here. I think those in public service or that have regular 401K retirements are out of their minds to retire in such a place.

[NFATrustGuy]

So is this going to be crosschecked and verified like the Feds handle 1099’s? The way I understand it, if someone sends me a 1099, they also send the Feds a copy of my 1099. The IRS then verifies that I’ve accounted for the 1099 on my taxes.

If XYZ Retailer sends me a notice saying I’ve spent $100 in 2017, will Colorado be verifying that I report that purchase and pay my taxes on the purchase? Also, I’m too lazy to look it up right now... is the tax rate 3%-ish.

[brutal]

Hopefully palmeto state and midway doesn't comply. Time to repeal the use tax. It makes no sense since the tax does not support the infrastructure of the selling business. Roads already supported by gas tax and p.o. is self sufficient..

Who says the ammo I buy is going to be used in Colorado?

F*** them.

[Great-Kazoo]

Well, more Colifornia. The amount of money the state and everyone down the line wants is crazy. My Property taxes went up 30 percent. That was based on a valuation from 2016. I can only imagine what next year will be. I heard a bit on the radio about Colorado tying to stop the military retirees from leaving. Colorado is turning into an expensive hassle. My guess is it cost them almost as much to enforce this as they make in revenue.


The same people who are against building a wall, want to prevent U.S. citizens , our military no less, from leaving. [facepalm]


As for on line retailers charging tax. I believe it's part of the states unspoken extortion plan. Want to do business or consider relocating here, charge Colorado residents tax. Or there will be no tax incentive package available when you do.

Amazon never charged tax, till they considered CO as a potential move

[kidicarus13]

Also, I’m too lazy to look it up right now... is the tax rate 3%-ish.

Long explanation short... it's based on what county you live in.

[CS1983]

The only way to stop this at the election level is for people to understand what money is: a fungible proxy for a man's time and labor.

When they stop viewing money as some thing unto itself and realize that every tax dollar is a % of time they literally worked as an indentured servant, there will be some semblance of hope to change things.

[Zundfolge]

Amazon never charged tax, till they considered CO as a potential move

Actually Amazon has been charging Colorado tax for some time now because they have a physical presence here (a warehouse in Aurora I believe).

Now that only applies to stuff you buy on Amazon FROM Amazon, not stuff you buy through third party vendors. The company I work for sells stuff through Amazon and I don't think we've been collecting sales tax on any of it.

[Skip]

So is this going to be crosschecked and verified like the Feds handle 1099’s? The way I understand it, if someone sends me a 1099, they also send the Feds a copy of my 1099. The IRS then verifies that I’ve accounted for the 1099 on my taxes.

If XYZ Retailer sends me a notice saying I’ve spent $100 in 2017, will Colorado be verifying that I report that purchase and pay my taxes on the purchase? Also, I’m too lazy to look it up right now... is the tax rate 3%-ish.

(Not a tax professional)

My understanding is they are voluntarily reporting sales to the state to avoid litigation. This is the game they played with Amazon; report or we go to court. There isn't an official reporting mechanism/form. So the larger the dollars the more likely the enforcement.

I don't think any state has won such a lawsuit because these retailers don't have nexus in our state. And shipping to customers in the state hasn't been a means to impose nexus. No one wants to find out which way that would go. The trend has been to decrease state autonomy when it suits Libs and increase it subjectively for the same reason. CO can't enforce it's own marriage laws but can cross state lines and impose nexus on companies in other states?!?

After this threat, Amazon agreed to open a fulfillment center in Aurora, with some huge tax breaks (of course).

The retailers sending our purchase data to the state costs them nothing and transfers the burden onto us. The state can then beat us up for it. Retailer is off the hook.

[Eric P]

What the problem is, is all the dummies that voluntarily comply with this law. How else would the state know that XYZ company in another state shipped goods to Colorado? They wouldn't. Colorado has no right to demand records from out of state companies. They have no way of enforcing this law except when information is volunteered.

Also what would happen, if say you use pre-pay cards or fake names to order stuff online.

fvck I dislike this solid blue state more & more

[crays]

Quick question, because I truly don't remember:

Are Gift Cards taxable?

I know that if I redeem a gift card, I will be taxed on the merch I buy (if taxable), but I don't think the purchase of the gift card is.

All this is directed at the above post regarding "anonymous"/guest purchases using prepaid debit/credit vehicles. Some merchants do not allow their use.

[Rumline]

Yeah I bought a bunch from Newegg and got the letter. The whole reason I chose them was to avoid sales tax. Now I will happily take my business back to Amazon.


Long explanation short... it's based on what county you live in.
So to make a long story long, is it just the county sales tax rate? Or do they calculate based on your actual address? Or is it some other arbitrary amount? I live in unincorporated El Paso County so I better not get charged the COS 8.25% rate.

[kidicarus13]

So to make a long story long, is it just the county sales tax rate? Or do they calculate based on your actual address? Or is it some other arbitrary amount? I live in unincorporated El Paso County so I better not get charged the COS 8.25% rate.

Please do not ask me to decipher... 73412

[skoodge]

What if I lost those tax forms they sent me in a boating accident?

[Irving]

Who says the ammo I buy is going to be used in Colorado?

F*** them.

This is an interesting point, maybe. Is there a threshold for how much something needs to be utilized in state for this to apply? Say I buy a drone for my business which operates nationwide, but due to local laws, I can't use the drone here? What if I purchase course material for rules and regulations for another state? Pretty difficult to argue that it'd be utilized in state.

*The thing about not being able to use a drone here is made up, just for the purpose of the example.

[Circuits]

What if I lost those tax forms they sent me in a boating accident?

If the amount is large enough that DOR decides to go after you, they'll demand payment. If you don't pay, they'll eventually enter a garnishment order against any wages you get, and an offset against any federal or state tax returns you're owed until the state is paid what it says you owe them.

[skoodge]

If the amount is large enough that DOR decides to go after you, they'll demand payment. If you don't pay, they'll eventually enter a garnishment order against any wages you get, and an offset against any federal or state tax returns you're owed until the state is paid what it says you owe them.

That sounds like fun. But I really have no idea where my newegg one went. Big brother needs their share.

[TFOGGER]

No Hablo ingles?

[Eric P]

Wonder how many throw these away thinking its just junk mail from the vendor???

The state is probably hoping most toss them so they can steal more through late fees or fines.

I check mail once a week, and 99% goes in the shredder un-opened if my name is on it or garbage for standard junk mailers. I check more often when I am expecting something like standard tax forms. But it is amazing how much junk is disguised as official mail.

[jslo]

Long explanation short... it's based on what county you live in.

If it's a state sales tax, what does the county have to do with it? Or are they getting local taxes also? I believe the state sales tax is 2.9

[TFOGGER]

If it's a state sales tax, what does the county have to do with it? Or are they getting local taxes also? I believe the state sales tax is 2.9

The state collect most county sales taxes as well. I have to file sales tax returns every month, and the county and RTD taxes are on that return.

They also collect city and town taxes for non-home rule cities.

[crays]

I'll just leave this here...

https://www.colorado.gov/pacific/sites/default/files/DR1002.pdf


Nevermind... I missed kid's post earlier containing this info in pdf form.

[kidicarus13]

If it's a state sales tax, what does the county have to do with it? Or are they getting local taxes also? I believe the state sales tax is 2.9

Colorado use tax is calculated at the same 2.9% rate as the state sales tax. Some cities, counties, and special districts in Colorado also impose a use tax. The Department of Revenue administers use tax for certain special districts, but does not administer use tax for any city or county. Instead, any use tax imposed by a city or county in Colorado is remitted directly to the applicable city or county. See Department of Revenue publication DR 1002, “Colorado Sales/Use Tax Rates,” available online at Colorado.gov/Tax, for information about use taxes, exemptions, rates, and remittance information for cities, counties, and special districts in Colorado.

[skoodge]

What if, one of the items I bought from newegg in 2017 and is showing up on the year end tax letter from newegg, got returned in January. Do I still have to pay taxes on it now, or will they adjust for it on next year's taxes?

[NFATrustGuy]

Is the State assembling a list of taxes due so they can compare our returns against what they think we should be paying? Or are they assuming that we’ll just pay up on the suggestion that they’ll be actively comparing what XYZ vendor submits to what we submit?

To compare, the IRS receives 1099 and W2 information from employers via electronic means. These documents contain our Social Security numbers. It’s very easy to cross check individual tax returns to make sure the 1099’s and W2’s are accurately reported. If the state receives a text-based email from New Egg saying that Pete Jones spent $99 on computer supplies, the State would have to somehow build a database and properly associate the purchase with Pete Jones’s tax return—without benefit of having Pete’s social security number—because New Egg doesn’t collect SS# as a condition of retail purchases.

I really wonder if this is just an intimidation tactic to encourage a greater percentage will comply with the self-disclosure and payment of use taxes.

Does anyone actually know the details of how this will work?

[Rumline]

Well all they have is your name and billing/shipping addresses, so if neither of those are your actual residence then I doubt they'd be able to figure it out.

[KevDen2005]

You could claim the smaller amount numbers if you feel like you don't have to claim them all so that it appears you are doing the right thing and make it less likely to get audited. They aren't sending actual 1099s

[CS1983]

Well all they have is your name and billing/shipping addresses, so if neither of those are your actual residence then I doubt they'd be able to figure it out.

That's why I buy all items online under the name of John Hickenlooper, and have them mailed to a 3rd party postal drop in Denver near the HQ of CCCP (Colorado Communist Collective Party), aka, the Capitol.

[davsel]

Filed with TurboTax, answered $0 in the online purchase question, received my full return two weeks later. YMMV

ETA: Received a tax letter from McKenzie Taxidermy Supply after filing and before receiving my return.

[68Charger]

I wonder if they sent a notice to my previous CO address (house was sold in April, PO box shutdown in Jan)

regardless, I'm sure they can go pound sand... all of it is being used in TX now

[Irving]

Is the State assembling a list of taxes due so they can compare our returns against what they think we should be paying? Or are they assuming that we’ll just pay up on the suggestion that they’ll be actively comparing what XYZ vendor submits to what we submit?

To compare, the IRS receives 1099 and W2 information from employers via electronic means. These documents contain our Social Security numbers. It’s very easy to cross check individual tax returns to make sure the 1099’s and W2’s are accurately reported. If the state receives a text-based email from New Egg saying that Pete Jones spent $99 on computer supplies, the State would have to somehow build a database and properly associate the purchase with Pete Jones’s tax return—without benefit of having Pete’s social security number—because New Egg doesn’t collect SS# as a condition of retail purchases.

I really wonder if this is just an intimidation tactic to encourage a greater percentage will comply with the self-disclosure and payment of use taxes.

Does anyone actually know the details of how this will work?

I asked a tax accountant this question today. He said he's been ignoring these letters for years. Basically they are apparently not also sent to the IRS.

[kidicarus13]

Hopefully your tax accountant will also represent you during an audit if you are so unfortunate.

Tangible personal property purchased over the internet and delivered into Colorado is not exempt from taxation simply because it was purchased online. However, if the seller does not have a store, warehouse, or other physical location in Colorado, the seller might not collect the applicable sales tax or retailer’s use tax at the time of the purchase. If a person, business, or other legal entity purchases tangible personal property online for use in Colorado, and pays no tax to the seller at the time of purchase, that purchaser will owe consumer use tax on the purchased property.

Beginning July 1, 2017, if you purchase taxable property over the internet from an out-of-state retailer that does not collect Colorado tax, the retailer must:

• present you with a notice at the time of the sale advising of your obligation to pay consumer use tax directly to the Department;

• send you an annual summary in January listing the purchases you made during the prior year; and

• report the total dollar amount of the purchases you made to the Department.

The annual summary you receive will assist you in reporting and paying consumer use tax. See “How to Report and Pay Consumer Use Tax” below for information about reporting and paying consumer use tax.

Per DOR website.

[Irving]

Totally understood. It's like telling someone that they drive 5 over all the time and never have a problem.

[Jer]

There's an awful lot of posts here that might indicate most consumers don't realize they're supposed to be paying tax on ALL online purchases. This is nothing new. Now retailiers are required to send notice because the next step is a big time crack down since it's harder to plead ignorance now that these businesses are doing the .gov's bidding for them.

[kidicarus13]

No one wants to be a test case. The State wants what they feel they're due. Like gambling... do your taxes based on what you can afford to potentially lose.

[hurley842002]

I'll say it again, screw Colorado!

[Circuits]

If the state receives a text-based email from New Egg saying that Pete Jones spent $99 on computer supplies, the State would have to somehow build a database and properly associate the purchase with Pete Jones’s tax return—without benefit of having Pete’s social security number—because New Egg doesn’t collect SS# as a condition of retail purchases.

They'll have a list of names and addresses, which they can pretty easily check against state income tax returns, computerized property tax and deed records, wage withholding, etc. That doesn't get them all the way to Pete Jones, but it wouldn't be hard to follow up on if Pete has things shipped to his home or business addresses.

I'm sure the state doesn't really start checking at all until the amount they figure to collect is up in 4 figures, or at least past the mid-threes, at which point they might assign an investigator to match those purchase reports against those tax and property records. Anything much less would cost the state more to try to collect than they'd get in tax, interest and possible fines.

If you bought $10,000 worth of crypto mining hardware from newegg, for instance; or bought a $20k rare book online, the state might well be interested in spending some time running down that $290 or $580 in taxes owed. $2k on a new gaming PC? probably not so interested in spending resources to collect the $58.

[Eric P]

Again, what does the state do to deserve the revenue from out of state sales?

Abosulely nothing.

[hurley842002]

Again, what does the state do to deserve the revenue from out of state sales?

Abosulely nothing.Colorado is run by Democrats, therefore they are "entitled" to the revenue.

[Irving]

Does anyone know of any other states that require this?

[Grant H.]

Does anyone know of any other states that require this?

From http://www.salestaxinstitute.com/Sales_Tax_FAQs/What_states_impose_sales_use_tax


Currently 45 states plus the District of Columbia impose a general sales tax.

Snip...

Currently, every state that imposes a general sales tax also imposes a use tax.

From http://www.salestaxinstitute.com/Sales_Tax_FAQs/the_difference_between_sales_tax_and_use_tax?utm_c ampaign=DifferenceFAQ&utm_medium=WhatStatesImposeFAQ&utm_source=stiwebsite


The sales tax is imposed on retail transactions. It applies to all retail sales of tangible personal property, and in some states services, in the state. The use tax is imposed on consumers of tangible personal property that is used, consumed, or stored in this state. Consumer’s use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Sales and Use tax generally applies to most leases of tangible personal property. The sales tax and the use tax are "mutually exclusive", which means either sales tax or use tax applies to a single transaction, but not both.

[Irving]

So 45 out of 57 states are liberal cesspools?

[Grant H.]

So 45 out of 57 states are liberal cesspools?

57?

[Grant H.]

So 45 out of 57 states are liberal cesspools?

Some that don't are liberal cesspools as well...

From http://www.salestaxinstitute.com/Sales_Tax_FAQs/What_states_impose_sales_use_tax


The five states without general sales taxes are: Alaska, Delaware, Montana, New Hampshire and Oregon. However, Alaska permits local sales taxes. Delaware imposes a rental and service tax. Most of these states also impose different excise, meal or lodging taxes even though they don’t impose a general sale and use tax. New Hampshire imposes a meals and rooms (rental) tax. Montana imposes lodging facility use and sales taxes, miscellaneous telecommunications taxes, and a severance tax on oil and gas production. Oregon imposes a lodging tax and a severance tax on timber harvesting.

[68Charger]

Well looky there, Texas has use tax as well... just not much mechanism to report or pay it. (No state income tax)

There is a form 01-156 (makes one wonder what the other 155 were) to file by Jan 20th for the previous year's taxes of less than $1000 (more than that is to be filed quarterly or monthly)

But to further complicate things, many purchases/uses on my property are exempt if they're related to agricultural purposes (yes, I have an ag exempt tax #). Although they specifically state that predator control does not qualify.

[Grant H.]

It's a joke referring to Obama's mentioning of visiting all 57 states. (out of 58)

https://www.snopes.com/politics/obama/57states.asp

I knew I was missing something...

[DenverGP]

Growing up 40 years ago in pennsylvania, it was common practice to drive down to delaware for any larger purchases since delaware didn't have any sales tax. It's no coincidence that one of the largest shopping centers in the area is just across the delaware border.

On a smaller scale, when I made a large purchase from Home Depot, I drove down to the highlands ranch store where the sales tax was 5%, vs the one up Wadsworth charging 7.5%.

[Eric P]

Going to finish taxes tomorrow.

Has anyone received notice from Midway or Palmetto state that they reported purchases to Colorado?

I made some purchases, but don't feel the urgency to sift through cc statements and give undeserved money to the state. Probably $80.00 in tax at most.

[hatidua]

Well, I just tried to make a payment for my "use tax".

Dear CO dept of revenue, if you WANT money, how about making it a wee bit @#$%&@! easier to give you the money! [Rant1]

[KevDen2005]

Well, I just tried to make a payment for my "use tax".

Dear CO dept of revenue, if you WANT money, how about making it a wee bit @#$%&@! easier to give you the money! [Rant1]

Was this not an option when doing taxes?

[TFOGGER]

Well, I just tried to make a payment for my "use tax".

Dear CO dept of revenue, if you WANT money, how about making it a wee bit @#$%&@! easier to give you the money! [Rant1]

It's a sign...

[jreifsch80]

So what happens when my under 18 kids buy things online and I get a notice of tax owed by them? I’m not a tax person so I’m actually curious

[crays]

So what happens when my under 18 kids buy things online and I get a notice of tax owed by them? I’m not a tax person so I’m actually curiousJust curious as to the method of payment?

Sent from somewhere