Country / Language

New Colorado Legislation Broadens Sales Tax Nexus



Recently signed Colorado legislation expands the definition of  “doing business” for sales tax purposes and shifts the burden to the taxpayer to prove that it is not subject to Colorado’s sales tax provisions.  


On June 6, 2014, John Hickenlooper, the Colorado Governor, signed into law House Bill 14-1269 (HB 14-1269), also known as the Marketplace Fairness and Small Business Protection Act, pursuant to which a retailer will now have to prove that it does not have physical presence in Colorado.

Under the law in effect prior to this enactment, the Colorado Department of Revenue, generally, had the burden of proving that a retailer had a physical presence in the state. The new law creates a rebuttable presumption that a taxpayer, if certain requirements are met, has a physical presence in Colorado for sales tax purposes and shifts that burden to the taxpayer to prove that it is not subject to Colorado’s sales/use tax collection and reporting provisions. Note that certain taxpayers are not presumed to be doing business in Colorado, including:

  • Out-of-state taxpayers contracting with a third party who will only perform advertising services in Colorado;
  • Out-of-state taxpayers contracting with an  “affiliate marketing” company based in Colorado who will solicit on-line sales; and
  • Small businesses with cumulative gross receipts of less than $50,000 of annual sales in the state.

The Marketplace Fairness and Small Business Protection Act is effective July 1, 2014.

What Does CohnReznick Think?
Colorado’s approach to expanding its “doing business” rules is interesting in that it does not go as far as many other states have in expanding their “doing business” provisions. Taxpayers that have sales to Colorado customers should review these provisions to determine whether, and if so how, these new provisions impact their Colorado sales tax position.


For more information, please contact Patrick Duffany, Partner and State and Local Tax Practice Leader, at 860-368-3607 or Scott Smith, Senior Manager, State and Local Tax Practice, at 973-364-7720.

To learn more about CohnReznick’s State and Local Tax Practice, please visit our webpage.

Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

Search Our People

Search Our People

Look ahead. Gain insight. Imagine more. Is your business ready to break through?

View our new TV commercial..

Industry Outlooks

Industry Outlooks

Gain insight into what is ahead for the Commercial Real Estate, Technology and Middle Market Private Equity industries.


Learn about our upcoming events.


Working With Us

Working With Us

What makes CohnReznick different from others in our profession? And what should our clients come to expect when working with us? The answer is The CohnReznick Advantage. Contact us to learn how we can out the CohnReznick Advantage to work for your business.


The value of an organization is determined by the skills and qualities of its leaders. With more than 280 partners serving clients nationwide, CohnReznick is renowned for the diverse experiences, knowledge and backgrounds of its leadership.

Learn More


We align our services in three segments: Accounting and Assurance, Tax, and Advisory. This approach allows us to provide holistic solutions to complex business problems and to seize upon opportunities requiring an integrated approach.

Learn More


Accounting and tax issues different significantly based on an organization's industry. We provide clients with expertise in nearly two dozen industries – we know the opportunities, the obstacles, the competitive landscape.

Learn more


CohnReznick professionals are thought leaders in their industries. Clients benefit from relevant and timely economic, legislative and industry insights that can keep them a step ahead of competition.

Learn More

Global Reach

Our involvement in the Nexia International network of firms enables us assist our clients wherever they do business-providing local expertise and connections wherever they needed. Nexia is comprised of 20,000 professionals operating in over 100 countries.

Learn More