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    2 Replies Latest reply on Nov 28, 2008 2:55 PM by Santa Fe CPA

    Sales taxes on the internet for Colorado

    papasmurf Newbie
      Please forgive me if this has already been asked. I am starting a business....I have a Colorado State tax license and a Broomfield tax license. I was told that I need to charge sales tax for the point of delivery. The biggest part of my business is going to be online. I don't understand use taxes, etc. I understand charging state, city and county if applicable. Colorado has many home rule cities. Some of them have RTD taxes, lodging taxes, etc. The form I was sent to by Broomfield is the DR1001. That is a confusing form. Isn't there somewhere where you can get the TOTAL tax to charge for each city, without having to add it all up? I can't afford to pay these sites that give you the rates....all my money is going to tax licenses! I guess I have to manually add each and every tax rate per zip code into Pay Pal. I also don't understand, do I have to get a sales tax license from each city that I charge taxes? I am very frustrated and beginning to think about forgetting the whole thing. The business part of it is easy....it's the tax part that is a nightmare! Can someone help me figure all this out? I wanted to get this up and running for the holidays. It's going to take me months to figure this all out.
        • Re: Sales taxes on the internet for Colorado
          Lighthouse24 Ranger

          Most state taxing authorities don't do a very good job of explaining this, so don't feel bad. The "good" news is that you seem to be making it harder than it is.

          Assuming that your web-based operation has only one legal business address, and that it is in Broomfield, here's the deal: If the customer who is buying from you is also located in Broomfield, then you must collect Colorado state sales tax, plus any county and city taxes for that apply for Broomfield. If the customer is located elsewhere in Colorado, you must collect Colorado state sales tax only. If the customer is located out of state, you don't collect Colorado sales tax at all.

          So all you have to worry about is two rates -- your state + local sales tax rate for sales within your own taxing jurisdiction, and your state sales tax rate for sales to customers in all other parts of the state.

          Hope that helps. Welcome to the community and best wishes.
          • Re: Sales taxes on the internet for Colorado
            Santa Fe CPA Adventurer

            Hi there Papasmurf,

            Lighthouse24 has covered the question correctly.

             

            The Colorado Department of Revenue website or the local office there in Broomfield or in nearby Adams County community will be able to answeer any other question you may have,