In Colorado, sales tax and use tax are separate types of tax that may be connected in certain circumstances. Colorado sales tax is imposed on the retail sale or purchase of tangible personal property, certain services, and specific transactions. Whereas Colorado use tax is imposed on the privilege of storing, using, or consuming any articles of tangible personal property that were purchased at retail outside of Colorado, where no sales tax was paid. Though both sales tax and use tax may both apply to certain purchases, they do not always apply jointly to every purchase.
As you may know, there are home rule cities in Colorado. These are locations within Colorado that are authorized by the state to levy specific taxes within their jurisdictions. These may include sales and use taxes and home rule cities may have tax laws and filing requirements for these taxes that may differ from those of the state. It is important to know the differences, and whether or not you are subject to home rule cities for tax purposes.
To further complicate an already complicated tax requirement, there are certain transactions that create a tax nexus. This is a fancy term for a connection that was created by those transactions. If this applies, you may have an obligation to collect, pay, and report taxes to other tax jurisdictions.
When reviewing the different types of taxes, and how they may apply to you and your business, it is important to remain informed and rely on the resources provided by the tax authorities.
There are also tax professionals who have experience with the various types of taxes, tax authorities, and the requirements to remain compliant. If you find yourself overwhelmed by these issues, do not hesitate to contact an experienced tax professional to discuss your concerns and the options available to help you with the process.
The state and local tax authorities have increased their examination of sales tax and use tax compliance. They are sending out notices to taxpayers and are even sending emails to businesses through their websites to inform them of the investigation of the tax issues. It is important to identify whether these communications are actually from the local government tax authority, or if they are a scam, before you send confidential information to them.
If you do find that you or your business have tax problems, it is important to read the notices carefully, know your rights, and understand the options available for handling the problems. There are options available to help you handle these tax problems and you do not have to deal with them on your own.
For help navigating your tax problems and negotiating a resolution, contact the experienced tax team at the Business Law Group. Our team is ready to help you by taking the burden of dealing with the IRS and helping you navigate your tax problem to find a resolution tailored to your situation. Call us at (719) 355-8840 or email info@businesslawgroup.us to get started today.
