Sales tax collection in Colorado (Denver, Colorado Springs: apartment, house, buy)

[EscapeCalifornia]

I have a mobile business and I'm considering moving to Colorado. Since I go to the customer, I understand that I'd need to collect and remit to proper sales tax for their address. The problem appears to be in determining exactly which tax districts I'm in at the moment since zip code boundaries don't coincide with tax boundaries. Short of having GPS tied to a tax rate database, how do you figure it out? I won't be selling that much tangible goods (I do mostly service) and want to comply with all the laws, but it looks like they make it as difficult as possible. Has anyone else dealt with this and found a good solution?

[winglady]

I'm sure there must be some software you could buy that would calculate this for you based on full address. I was involved in a software project ages ago for larger businesses, and users would subscribe to a sales tax computation service. I'd imagine that there'd be something now to let you do this from a PC/laptop.

Then again, many times when we've purchased a large item that will be delivered (e.g. automobile, refrigerator), the merchant has simply asked us which local taxes apply to us at our home address. So, even the car dealers and places like Sears seem to handle this in a pretty casual manner!

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[Katarina Witt]

As per winglady, merchants usually just ask you where you live. If your zip code is 80027 you could live in Louisville or Superior for ex. You just tell them where and they seem to look it up in some table. At least that has been my experience. I am not a businessperson, I don't know where they get these tax rate tables.

[COflower]

You typically don't go by ZIP code per se. You go by city, county and state.

Services here are no taxed, they are tax for your income based on the general federal income tax guidelines...for example, you go to some house that is in Colorado Springs yet your business resides in Denver or Pueblo, you report it if it's over $600.

As for goods, If you ship to Colorado Springs from Denver, Littleton, etc. only state taxes apply. If your customer picks it up then your customer pays CO state taxesa and Littleton taxes and whatever county taxes are.

There is a seriously grey area if you sell the product from the house and deliver it. It's mostly (from my past experience but please consult a professional) that only state taxes are owed in that case.

I used to sell windows and doors. They were manufactured in Colorado Springs but regardless if they were delivered via our truck or through a trucking service, only state taxes applied. Yes, we had my home as a point of sale but since the product originated from Colorado Springs, only state taxes were charged.

It can be complicated but I think that you should talk to a tax pro but I think you will be safe in the idea of origination being your business base and state taxes are more likely. I used to "sell" software but only had to add state taxes if I sold out of the county and city.

[EscapeCalifornia]

Thanks. I just made a list of all of the home rule cities in the Denver metro area and it looks like I'd need a ton of permits and spend a lot of time filing returns over very little money. My business is mostly service and I only sell physical goods incidental to that service. In California, all sales tax is paid to the state and they let me file annually since my taxable volume is so low. I think I only paid about $1200 last year. I can only imagine having to file returns with Colorado DOR and every home rule city, sending them each a couple of bucks. I guess I could just forgo the sales tax permit and sell everything at cost so the customer is just reimbursing me but I'm not sure that's even legal.

[OREGONRAIN]

Well there is one benefit you found living in California versus Colorado, the method in which sales tax in collected.

[EscapeCalifornia]

Originally Posted by OREGONRAIN

Well there is one benefit you found living in California versus Colorado, the method in which sales tax in collected.

Yeah its definitely way simpler and easier to administer here. Not sure its worth being house poor or living in an apartment the rest of my life for it though.

[OREGONRAIN]

Then I wouldn't wait too long to make the decision to move there. I have a strong feeling Colorado, at least that front range area, is going to be the next California in terms of housing and cost of living, it is just a matter of time now. Anyone that has lived in calif, should be able to recognize the signs.

[EscapeCalifornia]

Originally Posted by OREGONRAIN

Then I wouldn't wait too long to make the decision to move there. I have a strong feeling Colorado, at least that front range area, is going to be the next California in terms of housing and cost of living, it is just a matter of time now. Anyone that has lived in calif, should be able to recognize the signs.

We'll be visiting in July to check it out. Can't wait.