Colorado Internet sales tax takes effect on March 1, 2010. Yesterday, as expected, Governor Bill Ritter signed several tax bills including HB1193. Colorado HB 1193 was signed, Internet sales tax in Colorado takes effect on Monday, March 1. As a result, online merchants are working quickly to determine the impact. Merchants are urged to retain professional counsel, a sales and use tax attorney or qualified accountant to make educated decision regarding this new law. (Final version of HB 1193 Colorado Internet Sales Tax)
Although the Colorado Internet sales tax law is a bit different than the legislation passed in other states, there are similarities. The common focus of all these pieces of legislation is the modernization of nexus laws to adjust to changes in consumer shopping patterns. States with sales tax actually have what is called a sales and use tax. If sales tax is paid to a seller by the consumer at time of purchase (and then remitted to Revenue department) it is a sales tax. If a merchant does not collect the sales tax at time of purchase, the consumer is supposed to remit the sales tax directly to the Revenue department; it is then called a use tax. Most states will tell you that many consumers aren’t doing this, most likely due to lack of understanding the requirement. States are seeing a need to recoup lost sales tax revenue.
Whether you agree or disagree with modern nexus laws or that affiliates create a nexus, one thing remains clear. As we have said since 2008, this is an issue that would be better addressed on a Federal level.
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