Contact UsHow do I find a sales tax software vendor that handles Colorado addresses properly?
I know I can't rely on zip codes or even mailing addresses in Colorado so how do I make sure I charge the right sales tax? If I use a sales tax software solution do I have to pay if they are wrong?
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Tax Professional Answers
Alan Smith
Address verification is vital for proper sales tax compliance in Colorado as mailing addresses often do not indicate the true city.
There are also Special Districts that cross or encompass many city, town and county boundaries. The RTD and Cultural District in the Denver metro area are prime examples. Additionally, reliance upon zip codes would be inadequate to determining the applicable home-rule or state-collected city, the county and the special district jurisdictions' taxes that may be applicable.
If you’re doing business in Colorado, you may want to pick a sales tax compliance package and vendor uses a Colorado State-certified address database.
There may be others, but Exactor and Sovos (Taxify/ Taxware) both provide compliance solutions and are listed on the CO DOR's website as providers of free CO State-certified address verification with a hold-harmless provision: www.colorado.gov/pacific/tax/local-sales-use-tax-by-address
If you know of other vendors that use a CO State-certified address database, please post a comment.
Address verification is just one of the issues that make handling sales and use tax in Colorado so difficult. Using a certified database can help, but most home-rule cities do not honor it. If relied upon improperly, it can still result in significant audit assessments.
Alan Smith
Sales Tax Colorado, LLC
Providing multi-state sales and use tax consulting with an emphasis on Colorado
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380 weeks ago
There are also Special Districts that cross or encompass many city, town and county boundaries. The RTD and Cultural District in the Denver metro area are prime examples. Additionally, reliance upon zip codes would be inadequate to determining the applicable home-rule or state-collected city, the county and the special district jurisdictions' taxes that may be applicable.
If you’re doing business in Colorado, you may want to pick a sales tax compliance package and vendor uses a Colorado State-certified address database.
There may be others, but Exactor and Sovos (Taxify/ Taxware) both provide compliance solutions and are listed on the CO DOR's website as providers of free CO State-certified address verification with a hold-harmless provision: www.colorado.gov/pacific/tax/local-sales-use-tax-by-address
If you know of other vendors that use a CO State-certified address database, please post a comment.
Address verification is just one of the issues that make handling sales and use tax in Colorado so difficult. Using a certified database can help, but most home-rule cities do not honor it. If relied upon improperly, it can still result in significant audit assessments.
Alan Smith
Sales Tax Colorado, LLC
Providing multi-state sales and use tax consulting with an emphasis on Colorado