Colorado marketplace sales tax depends on who makes the sale, which taxes the facilitator collects, and whether you also sell directly. In general, a marketplace facilitator must collect and remit applicable Colorado state and state-administered local sales taxes on marketplace sales. A seller that sells only through a facilitator that handles those taxes generally does not need a Colorado state sales tax license for those marketplace sales; sellers with their own website or other direct sales generally do.
Colorado is especially complex because dozens of home-rule cities administer and audit their own local taxes separately from the state. The Colorado Department of Revenue administers state taxes, while Revenue Online and SUTS support filing and payment for state-administered taxes and, through SUTS, participating self-collecting cities. The details can depend on the facilitator’s collection coverage and the jurisdictions involved, so confirm your specific setup before relying on a marketplace’s tax collection.
What counts as a marketplace facilitator in Colorado?
The Colorado Department of Revenue describes a marketplace facilitator as an operator that contracts with marketplace sellers to facilitate sales for consideration, communicates offers or acceptances between sellers and purchasers, and directly or indirectly collects payment from purchasers and transmits it to sellers. A marketplace can be an online forum where goods or services are offered for sale; the label a business uses for itself does not determine whether the legal test is met.
If you are unsure whether a sales channel meets these criteria, review the arrangement and the facilitator’s tax documentation. The exact position depends on how the channel operates and what it does with customer payments. Confirm the classification with the Colorado Department of Revenue or ask us to review the facts with you.
Who collects and remits tax on marketplace sales?
For sales made through a marketplace, a facilitator generally must collect and remit applicable Colorado state and state-administered local sales taxes. Colorado gives the facilitator the retailer’s administrative and substantive rights, obligations, and liabilities for sales made through its marketplace. The facilitator also has tax responsibilities for its own direct sales made through that marketplace.
A marketplace seller generally does not collect or remit state sales tax again on a marketplace transaction when the facilitator is responsible for collecting it. Do not assume, however, that every local tax is covered in every jurisdiction: Colorado’s home-rule cities administer their own taxes, and the facilitator’s collection responsibilities and coverage should be checked for the particular sale. Keep marketplace statements and transaction records so you can reconcile what was collected and identify any sales that were not handled by the facilitator.
When do Colorado marketplace sellers need a sales tax license?
The Department of Revenue does not require a seller that sells exclusively through a marketplace facilitator to obtain a state sales tax license when the facilitator handles the applicable state and state-administered local sales taxes. A facilitator may nevertheless require sellers to hold a license under its own policies; check its instructions rather than assuming the state rule answers that separate question.
If you also sell directly to Colorado customers through your own website, a physical store, or another channel, the Department says you are required to have a sales tax license for those direct sales. A seller’s licensing and filing obligations can also depend on whether the facilitator collects all applicable taxes and on local jurisdiction requirements. Confirm the current requirements with the Department and the relevant city where needed.
What is Colorado’s sales-tax economic nexus threshold?
Colorado’s Department of Revenue identifies a $100,000 retail-sales threshold for a retailer without a physical location in Colorado. A retailer that did not exceed $100,000 in Colorado retail sales in the previous calendar year must begin collecting when its retail sales into Colorado exceed $100,000 in the current calendar year. The Department’s guidance describes the start of collection as the first day of the first month commencing at least 90 days after the threshold is exceeded.
Marketplace sales and direct sales should be tracked separately and evaluated under the Department’s current rules; do not assume that marketplace-collected transactions remove every obligation for your own-channel sales. The threshold is not a substitute for checking physical presence, licensing, local taxes, or the facilitator’s collection coverage. If your sales are near the threshold or your channels are mixed, ask the Department or have us check your facts against current guidance.
Do you sell through a marketplace and your own website?
Yes, you may have different responsibilities for each channel. The facilitator generally collects and remits applicable state and state-administered local tax on sales made through its marketplace. You remain responsible for determining and meeting your obligations on sales made directly through your own website, store, or other channel, including obtaining a state sales tax license when required and filing returns for your direct activity.
Maintain records that distinguish marketplace transactions from direct transactions, including the destination, tax collected, and facilitator reporting. This helps prevent both missed tax on direct sales and duplicate reporting of marketplace sales. If the marketplace’s records do not clearly show which taxes it collected, confirm the treatment before filing.
How do Colorado home-rule cities affect marketplace sales?
Colorado is a home-rule state, and dozens of cities administer and audit their own local sales taxes separately from the state. A facilitator’s obligation to collect state and state-administered local taxes does not mean every self-collecting city’s tax is automatically handled in the same way. Check the facilitator’s jurisdiction coverage and the city’s rules for the destination of each sale.
SUTS is the Department’s optional filing system. It supports a consolidated return and payment for state-collected taxes and participating self-collecting home-rule cities; participation matters, so SUTS does not replace checking a city that administers its tax independently. Revenue Online is the Department’s system for state tax accounts and filings. For a city-specific question, confirm directly with that city or use the Department’s current SUTS information.
What returns must you file, and when are they due?
If you sell only through a facilitator and qualify for the Department’s marketplace-only treatment, you generally do not have the state sales tax licensing, collection, and filing obligations for those marketplace sales when the facilitator collects all applicable state and state-administered local taxes. If you make direct taxable sales, you may need to file Colorado returns for those sales. A return may still be required for a filing period with no sales or tax due once you have a filing obligation.
The Department sets filing frequency based on monthly sales tax collected. Its current filing information lists annual filing for $15 or less per month, quarterly filing for under $600 per month, and monthly filing for $600 or more per month; the Department determines or may adjust a taxpayer’s assigned frequency. Returns and payments are generally due on the 20th day after the reporting period, with annual returns due January 20; if a due date falls on a weekend or legal holiday, the next business day applies. Check your account’s assigned frequency and current Department instructions, especially where SUTS or a self-collecting city is involved.
Who handles Colorado’s retail delivery fee?
Colorado’s retail delivery fee applies to qualifying deliveries by motor vehicle to a Colorado location when the delivery includes at least one item of tangible personal property subject to state sales or use tax. For a marketplace sale where the facilitator is required to collect sales tax from the purchaser, the facilitator is also liable for the fee when the item is delivered by motor vehicle. A marketplace seller that is not liable for sales tax on that marketplace sale is not liable for the fee on that sale.
The fee has separate exemptions and conditions, so sales-tax collection alone does not settle whether a business must collect or remit it. Check the Department’s current retail delivery fee guidance for the transaction and any applicable exemption. Keep delivery and tax records that show which party collected the sales tax and fee.
When should you use Form DR 1290?
Form DR 1290 is the Colorado Department of Revenue’s Certification of Registered Marketplace Facilitator. It is provided for marketplace sellers to use, as applicable, in connection with a facilitator’s registered status and the seller’s marketplace tax treatment. It is not a general sales tax return and does not replace a seller’s license or filing obligations for direct sales.
Review the form’s current instructions and the facilitator’s request before completing it. The appropriate use depends on your marketplace relationship and the facilitator’s registration; do not submit it merely because you sell online. If you are uncertain whether it applies, confirm with the Department or ask us to check the form and your sales channels.
Get help managing Colorado marketplace sales tax
Colorado compliance can involve state-administered taxes, marketplace-collected transactions, direct website sales, retail delivery fees, and city taxes administered outside the state system. Sales Tax Compliance USA is a done-for-you service staffed by people. We can review your channels, reconcile marketplace reports with direct sales, identify questions that need confirmation with the Department or a home-rule city, and help manage the applicable registration and filing work.
Because city participation and tax treatment can vary, we do not assume a marketplace has covered every obligation. Share your sales channels, Colorado destinations, and marketplace tax reports, and we can help determine what needs attention. For a definitive ruling on a disputed legal position, confirm directly with the Colorado Department of Revenue or the relevant city.
Colorado marketplace and direct-sale responsibilities at a glance
| Situation | Typical Colorado treatment | What to verify |
|---|---|---|
| Sale made through a marketplace facilitator | Facilitator generally collects and remits applicable state and state-administered local sales taxes; seller generally does not collect those taxes again on that transaction. | Whether the facilitator covers the destination jurisdiction and which taxes appear in its transaction records. |
| Seller uses only a marketplace facilitator | The Department does not require a state sales tax license when the facilitator handles applicable state and state-administered local taxes. | Any facilitator license requirement and any separate local jurisdiction requirements. |
| Seller also makes direct website or store sales | Seller must obtain a state sales tax license for direct sales and handle applicable tax and return obligations for those sales. | Economic nexus, physical presence, taxable products, and destination-specific local rules. |
| Marketplace delivery by motor vehicle includes taxable tangible goods | Facilitator responsible for collecting sales tax on the marketplace sale is also liable for the retail delivery fee, subject to applicable rules and exemptions. | Whether the delivery and goods qualify and whether an exemption applies. |
| Tax filing frequency for a state account | Department guidance lists annual at $15 or less monthly, quarterly under $600 monthly, and monthly at $600 or more monthly. | The frequency assigned to the account and current instructions for state and participating city filings. |
| Self-collecting home-rule city tax | City administers its own local tax; SUTS can support filing for participating cities. | Whether the city participates in SUTS and what its own rules require. |
Frequently asked questions
What is a marketplace facilitator in Colorado?
It is generally an operator that contracts with sellers to facilitate sales for consideration, communicates offers or acceptances between sellers and purchasers, and collects payment from purchasers and transmits it to sellers. The Colorado Department of Revenue’s criteria focus on what the operator does, not simply the name of the sales channel.
Does a marketplace facilitator have to collect Colorado sales tax?
Generally, yes: a facilitator must collect and remit applicable Colorado state and state-administered local sales taxes on sales made through its marketplace. Home-rule cities administer some local taxes separately, so verify the facilitator’s coverage for the destination and transaction.
Do Colorado marketplace sellers need a sales tax license?
The Department does not require a state sales tax license for a seller that sells exclusively through a facilitator that collects all applicable state and state-administered local taxes. A seller that also makes direct sales through its own website or a store is required to have a state sales tax license for those direct sales; check any separate facilitator or local requirements.
Do marketplace facilitator rules apply to home-rule cities in Colorado?
Facilitator rules cover applicable state and state-administered local taxes, but Colorado home-rule cities administer their own taxes separately. Check whether the facilitator collects the particular city tax and whether the city participates in SUTS; confirm directly with a city when its requirements are not clear.
What is Colorado’s sales-tax economic nexus threshold?
The Department identifies a $100,000 Colorado retail-sales threshold for a retailer without a physical location in the state. A retailer that did not exceed that amount in the previous calendar year must begin collecting after exceeding it in the current year, under the Department’s stated start-date rule; confirm current guidance for your sales mix and circumstances.
Are marketplace facilitators responsible for Colorado’s retail delivery fee?
For a marketplace sale where the facilitator is required to collect sales tax from the purchaser, the facilitator is also liable for the retail delivery fee when the qualifying item is delivered by motor vehicle. The fee has separate conditions and exemptions, so check the Department’s current guidance.
Do sellers need to collect tax on sales made through their own website as well as a marketplace?
A facilitator generally handles applicable tax on sales made through its marketplace, while the seller remains responsible for its own direct website or store sales. Direct sales can require a state license, collection, and returns, so keep channel records separate and assess nexus and local obligations.
What is Colorado Form DR 1290 used for?
DR 1290 is the Department of Revenue’s Certification of Registered Marketplace Facilitator, provided for marketplace sellers to use as applicable. It is not a sales tax return and does not remove obligations for a seller’s direct sales; follow the current form instructions and facilitator requirements.
How we handle this for you
Because Colorado is a home-rule state, local jurisdictions there can administer and audit their own tax separately from the state, which is where doing this yourself usually stops being viable. We are a managed service: our team registers you with the Colorado Department of Revenue, prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about Colorado.
Official sources
- https://tax.colorado.gov/marketplace-facilitators
- https://tax.colorado.gov/marketplace-sellers
- https://tax.colorado.gov/sales-use-tax-FAQ
- https://tax.colorado.gov/sales-tax-filing-information
- https://tax.colorado.gov/SUTS-FAQ
- https://tax.colorado.gov/retail-delivery-fee
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.