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New Use Tax Reporting Requirements in Colorado, Louisiana, and Vermont


Beginning July 1, 2017, Colorado will begin implementing and enforcing a 2010 law regarding use tax notifications. The law had been on hold while being challenged in court, but was found to be valid and not discriminatory against interstate commerce. In addition, Louisiana and Vermont are implementing similar new laws that were recently passed.

Colorado:

The law requires a vendor selling to Colorado customers to produce certain documentation even if the vendor has no physical presence with the state. If the vendor’s gross sales to Colorado customers is at least $100,000 during the previous year and expected to be the same in the current year, the vendor must:

–  Inform Colorado customers that their purchases may be subject to Colorado use tax (transactional notice),

Must send an “annual purchase summary” listing purchase dates and amounts, along with a reminder of use tax obligations to any Colorado customer with more than $500 of taxable purchases in one year, and

File an annual customer information report with the Colorado Department of Revenue listing the names, addresses and total purchases of their Colorado customers.

The first customer reports must be provided by January 31, 2018 and the first report to the Department of Revenue is due to the state by March 1, 2018. Penalties will apply for noncompliance.

Louisiana:

The new law is very similar to the Colorado requirements except that there is a $50,000 annual gross sale threshold. The due dates of reports are the same as noted above.

Vermont:

This state’s law applies to all “noncollecting vendors”, which are all vendors making taxable sales to Vermont purchasers but do not collect sales tax. While the customer reports are required, there are currently no Department of Revenue reports due to the state.

Vermont has also implemented an economic nexus model, where a company has sales tax nexus if it have sales over $100,000 or it has 200 or more individual sales transactions with Vermont customers and it engages in any advertising in the state (even by internet).

With the implementation of the Colorado rules, we expect many states will implement similar reporting requirements to increase their use tax collection opportunities. These reporting requirements can be avoided by registering with the state to collect and remit sales tax on all of these states’ sales.

Forms and instructions can be found on the state Department of Revenue websites. If you have any questions about this requirement, please contact your Berntson Porter representative at 425-454-7990. We’re here to help!