As marketplace facilitators begin collecting state-administered taxes in Colorado, Boulder issues guidance taking steps to make sure it gets what is due.

By Connie Zoerink

Voluntary compliance is a growing trend in marketplace facilitator tax collections, and the City of Boulder in Colorado has just jumped on the wagon. Boulder, the home of the University of Colorado, high-tech firms such as Google and Zayo, and countless start-ups, is a home-rule jurisdiction that collects and administers city sales tax locally.

The City has exercised that right in releasing guidance for marketplace facilitators and sellers, layering a “voluntary” duty on top of statewide collection duties that became enforceable as of October 1, 2019. Under the statewide rule, marketplace facilitators in the state that meet economic thresholds must register, collect and remit sales tax to the state.

The Boulder guidance basically says give to the State their due, but you also have a duty to Boulder. Specifically, the guidance states:

The City of Boulder is aware that several marketplace facilitators are changing their tax collection methodology in light of the State of Colorado’s implementation of HB19-1240. While the City of Boulder has not amended its nexus standards, any business that voluntarily collects City of Boulder taxes must remit those taxes directly to the City of Boulder.

Boulder has not amended its physical presence nexus standards. It has, however, requested that as marketplace facilitators begin collecting state-administered taxes, they voluntarily collect Boulder’s local sales tax and remit that tax either directly to the City or to their marketplace sellers to remit to the City, ensuring Boulder gets it due. Marketplace facilitator that choose to remit taxes directly to the City of Boulder, it must apply for a City of Boulder Sales and Use Tax Business license.

Marketplace sellers are ultimately liable for the Boulder sales tax due on their sales. City guidance further states that Boulder businesses using marketplace facilitators have a responsibility to confirm that their marketplace facilitator is licensed with the city and collecting and remitting city of Boulder sales tax on all sales sourced to Boulder. Using a marketplace facilitator does not relieve a City of Boulder licensed business from the responsibility to file tax returns. 

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Connie Zoerink can be reached at Follow Connie on LinkedIn.

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