Use tax reporting requirements, proposed rules | KPMG | US

Colorado: Use tax reporting requirements, proposed rules

Use tax reporting requirements, proposed rules

The Colorado Department of Revenue held a public rulemaking hearing concerning Rule 39-21-112(3.5), that once finalized, would provide guidance on the state’s use tax notice and reporting requirements.

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The current version of the proposed rule largely follows an emergency rule adopted on June 30, 2017. There are, however, changes from the version of the rule adopted in 2010 (shortly after the use tax notice and reporting requirements were enacted). 

After years of litigation, Colorado’s use tax notice and reporting requirements became effective on July 1, 2017. Under these requirements, retailers that do not collect sales or use tax on sales into Colorado (non-collecting retailers) must: 

  • Inform Colorado purchasers at the time of the sale that the purchase may be subject to Colorado’s use tax
  • Mail an annual purchase summary with the dates, amounts, and categories of purchases to all Colorado purchasers with over $500 in purchases from the seller
  • File with the Colorado Department of Revenue an annual customer information report listing the names, addresses, and total purchases for each Colorado customer

Non-collecting retailers that violate the notice and reporting requirements are subject to a $5 penalty for each failure to provide the required transactional notice; a $10 penalty for each failure to provide an annual statement to the customer; and a $10 penalty for each customer that should have been included in the annual report to the Department.

 

Read an August 2017 report [PDF 118 KB] prepared by KPMG LLP

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