Need to understand Colorado sales tax reciprocity? Focus on whether you’re a business selling *to* Colorado or a resident purchasing *in* Colorado. This drastically changes the rules.
For businesses, reciprocity agreements are rare. Generally, you collect Colorado sales tax on all sales to Colorado customers, regardless of your location. The Colorado Department of Revenue website provides detailed guidance on sales tax nexus – the connection triggering your obligation to collect. Check their resources for specifics on your situation; their forms and FAQs are excellent.
For Colorado residents purchasing goods and services, reciprocity usually affects only purchases made in neighboring states. Confirm whether a specific state has a reciprocity agreement with Colorado before expecting tax exemptions on your out-of-state purchases. State tax laws vary significantly, so direct verification with the relevant state’s revenue department is always recommended.
