Colorado Use Tax

[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?