The Sales Tax nightmare of the Wayfair Decision continues. Colorado is now forcing out-of-state retailers to apply for a sales tax license. Colorado literally has HUNDREDS of taxing jurisdictions, each with their own rules and reporting requirements. They’re counting on retailers not being able to hire attorneys and go through the state court systems.
Many tax professionals are suggesting that all small retailers without a physical nexus in Colorado block all future online sales anywhere inside the state until tax relief is passed. The repercussions of inadvertently creating a sales tax nexus in Colorado could be catastrophic for a small retailer without nexus in the state; the reporting requirements and taxing rules are mind-boggling in their complexity. Colorado may even try to impose RETROACTIVE taxation, which could be disastrous for any retailer that has done past business in the state without a physical nexus.
Please warn your clients that do business online not to get caught out by Colorado--it is safer for now to cease doing business in the state altogether.