Colorado Use Tax

[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.