Colorado Use Tax Instructions

Background:

CO sales tax is not paid on some online purchases. The TY2015 Colorado income tax form now requires taxpayers to report the total of their online purchases that were not taxed. The total amount is used to calculate the state tax which is added to their income tax. Most common situations: purchases on Amazon.com, eBay.com HSN.com, QVC.com; any retailer that has no physical stores or warehouses in CO. Does not apply to retailers such as REI.com, Walmart.com, Target.com, etc since those sites have stores in CO and they are required to withhold sales tax on purchases.

What to do:

Counselors should explain the above background to the TP and ask TP: Did you make any of these purchases and did you keep a record of these purchases?

If TPs do not have records, TPs can log on to their accounts at Amazon, QVC, eBay, HSN, etc. and obtain their total purchases for the year. They could just pick one retailer if there is a predominant one. Enter the amount for which they did not pay CO sales tax on line 29. Select SDCU code for line 31 – default for Boulder and Broomfield counties is 12.

If TPs have records, counselors enter the total purchases for which they did not pay CO sales tax on line 29. Select SDCU code for line 31.

If TPs did not make any of these types of purchases, or if they think the amount they purchased is negligible, or if they cannot or choose not to obtain their records, counselors can advise them to enter zero for line 29. Tell them that CO DOR may follow up with them someday.

 

Mark Riley, DC

1/20/2016