A business has Colorado sales tax nexus once it either keeps any physical footprint in the state or ships more than $100,000 in retail sales to Colorado customers during the current or previous calendar year. Cross either line and you have to register with the Department of Revenue, collect state and local tax, and file returns on Colorado’s schedule. The physical test is old and broad. The economic test is newer, cleaner, and catches most out-of-state online sellers.
What Counts as Physical Presence
Under C.R.S. ยง 39-26-102(3), a company is “doing business” in Colorado if it maintains an office, warehouse, distribution center, salesroom, or any similar place of business in the state.1Justia. Colorado Revised Statutes Section 39-26-102 You don’t have to own or lease the space. Inventory sitting at a third-party logistics facility or an Amazon FBA warehouse is enough.
People trigger nexus too. Employees working from home offices in Colorado, sales reps calling on prospects, independent contractors performing services on-site, and staff attending trade shows all count. Even temporary visits matter: a technician sent to Colorado for a week-long repair job establishes a taxable presence for that period.1Justia. Colorado Revised Statutes Section 39-26-102
Assets are easy to overlook. Leased equipment sitting in a Colorado client’s facility, company vehicles on Colorado roads, or demo units stored with a partner all contribute. A single employee or a small storage unit satisfies the standard. Businesses that find these connections late often face retroactive assessments covering the entire period they should have been collecting.
The $100,000 Economic Nexus Threshold
Businesses with no Colorado footprint still have to collect once they exceed $100,000 in retail sales into the state during either the current or the previous calendar year.2Department of Revenue – Taxation. Out-of-State Businesses The threshold counts gross sales of tangible goods, commodities, and services shipped to Colorado customers, including sales that might otherwise be exempt. Colorado originally paired the dollar threshold with a 200-transaction test, but that count was removed by permanent rule in April 2019.
Stay below $100,000 in both the current and previous calendar year and you’re not required to hold a Colorado sales tax license as a remote seller.2Department of Revenue – Taxation. Out-of-State Businesses Cross it, and the clock starts. You have to apply for a license and begin collecting by the first day of the first month that starts at least 90 days after your Colorado sales exceed $100,000.3Department of Revenue – Taxation. Sales Tax Guide That window sounds generous until you factor in the registration process itself.
The threshold resets each calendar year, but the previous-year prong keeps you in. A business that crossed in 2025 must keep collecting through 2026 no matter what current-year sales look like. If both 2025 and 2026 come in under $100,000, the obligation pauses until one year or the other tops the line again.
Selling Through a Marketplace
Colorado defines a marketplace facilitator as a platform that contracts with sellers, communicates offers between buyers and sellers, and processes payment on the seller’s behalf.1Justia. Colorado Revised Statutes Section 39-26-102 Amazon, eBay, and Etsy fit. A facilitator that meets the $100,000 economic nexus threshold collects and remits Colorado sales tax on all sales made through its platform, and individual sellers don’t collect on those specific transactions.
That relief has limits. If the facilitator collects the wrong amount because of incorrect information the seller provided, liability shifts back to the seller.4Department of Revenue – Taxation. Sales and Use Tax Topics – Marketplaces Getting your product tax categories, sourcing details, and exemption statuses right inside the platform’s system is on you.
Sellers who also run their own website have to track two channels. Marketplace sales don’t count toward the seller’s own $100,000 threshold.1Justia. Colorado Revised Statutes Section 39-26-102 If your independent website sales separately cross $100,000, you register and collect on those direct sales yourself, even though Amazon is already handling your Amazon sales.
State License Doesn’t Cover Home-Rule Cities
Colorado’s local tax structure is unlike most states. Some jurisdictions are state-collected, meaning the Department of Revenue handles the local tax along with the state 2.90%. Others are self-collected home-rule cities that run their own tax codes, licensing, auditing, and collection completely independent of the state.5Department of Revenue – Taxation. Local Government Sales Tax Denver, Colorado Springs, Aurora, and dozens of other cities are self-collected. A state sales tax license doesn’t cover you in any of them.
Each home-rule city defines what’s taxable, and those definitions don’t always match the state’s. Software may be taxable in one city and exempt at the state level. Food service rules vary. Rates and filing deadlines vary. A business with customers across several Colorado cities may need separate licenses, separate returns, and separate payment schedules for each self-collected jurisdiction. The license fees are modest, but the compliance work stacks up.
The Sales and Use Tax System (SUTS) portal reduces some of that. SUTS lets you file a single return covering the state and any participating home-rule cities at the same time, and its lookup tool identifies the correct tax rates for specific delivery addresses.6Department of Revenue – Taxation. Sales and Use Tax System Not every home-rule city participates. For non-participating jurisdictions, you remit directly to the city.7Department of Revenue – Taxation. SUTS Participating Jurisdictions
Retail Delivery Fee
Businesses that cross nexus also need to know about a separate per-transaction charge that piggybacks on delivery sales. Colorado imposes a retail delivery fee on any delivery made by motor vehicle that includes at least one taxable item. From July 2025 through June 2026 the fee is $0.28 per delivery, rising to $0.31 for the July 2026 through June 2027 period.8Department of Revenue – Taxation. Retail Delivery Fee Rates
Small sellers are carved out. Retailers with a physical Colorado location are exempt if their total Colorado retail sales the prior year were $500,000 or less. Remote sellers with no Colorado location are exempt if prior-year Colorado sales were $100,000 or less. Above those thresholds, the fee gets added to qualifying deliveries, collected from the purchaser, and remitted alongside regular sales tax. It doesn’t factor into the sales tax base.
Registering and Starting to Collect
Colorado uses Form CR 0100, the Colorado Sales Tax and Withholding Account Application, for new registrations.9Department of Revenue – Taxation. CR 0100 – Colorado Sales Tax and Withholding Account Application You can submit it electronically through MyBizColorado or Revenue Online. The form asks for your FEIN (or SSN for a sole proprietor), legal and DBA names, proof of identification, the physical address of each Colorado business location, and the names, addresses, and SSNs of all owners, partners, members, or corporate officers.10Colorado Department of Revenue. Instructions for the Colorado Sales Tax and Withholding Account Application You’ll describe your products or services so the Department can assign a NAICS code, pick a license start date, and select a filing frequency.
Online applications typically generate your sales tax account number the same day. Paper applications take two to three weeks. Businesses with a physical retail location have to display the license on-site.
Filing frequency depends on volume. Monthly collections of $600 or more mean monthly returns. Under $600 per month allows quarterly. Monthly collections of $15 or less allow annual filing, as does a wholesale business with a total annual liability of $180 or less.11Department of Revenue – Taxation. Sales Tax Filing Information Returns and payments are due on the 20th of the month following the reporting period, shifting to the next business day when the 20th lands on a weekend or holiday. Self-collected home-rule cities set their own due dates.
What Happens If You Miss the Line
Late filing or payment triggers a penalty equal to the greater of $15 or 10% of the unpaid tax plus an additional 0.5% for each month the balance remains outstanding, capped at 18%.12Department of Revenue – Taxation. Tax Topics – Penalties and Interest Late payment also forfeits the vendor service fee that timely filers otherwise keep. Interest runs on top; the 2026 rate on unpaid Colorado tax is 11%, compounding daily. Filing on time when you can’t pay avoids the filing penalty, though payment penalties and interest still hit the balance.
Businesses that realize they should have been collecting for months or years have a way to soften the landing. The Department of Revenue’s Voluntary Disclosure Agreement program limits the sales tax lookback to three years for taxpayers who come forward before being contacted about an audit, and usually waives penalties.13Department of Revenue – Taxation. Voluntary Disclosure Program Interest on the unpaid tax still applies. One exception matters: if you actually collected sales tax from customers and never remitted it, the lookback goes as far back as necessary to recover those funds. Not knowing you had an obligation is treated very differently from collecting the money and keeping it.