Signed by Governor John Hickenlooper

Vote Smart's Synopsis:

Vote to pass a bill that expands the conditions under which an out-of-state retailer is required to collect sales tax, effective July 1, 2014.

Highlights:

• Expands the definition of “doing business in this state”, which is used to regulate sales tax collection, to include the following terms (Sec. 2):
• The delivering of taxable services;
• The maintaining of distribution facility or storage place within the state; or
• The employing of a resident of Colorado who works from a home office.

• Expands the presumptions that an individual is “doing business in this state” to include the following considerations (Sec. 2):
• An individual is part of a controlled group of corporations with a component member who has a physical presence in the state; or
• An individual in an agreement with another individual who has a physical presence in the state and is acting in capacity for the latter.  

• Exempts the following activity from being considered as “doing business in this state” (Sec. 2):
• The purchase of advertising by an out-of-state retailer to be delivered in Colorado;
• The affiliate marketing agreement between an out-of-state retailer and an in-state independent contractor, in which the in-state contractor refers customers to the out-of-state retailer for commission; and
• The agreement between an in-state and out-of-state entity, in which the cumulative gross sales receipts that the out-of-state entity paid to the in-state entity total less than $50,000 in any given year.

• Specifies that if any provision or application of this bill is considered invalid, then that invalidity does not affect the validity of the other provisions or applications of this bill (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that expands the conditions under which an out-of-state retailer is required to collect sales tax, effective July 1, 2014.

Highlights:

• Expands the definition of “doing business in this state”, which is used to regulate sales tax collection, to include the following terms (Sec. 2):
• The delivering of taxable services;
• The maintaining of distribution facility or storage place within the state; or
• The employing of a resident of Colorado who works from a home office.

• Expands the presumptions that an individual is “doing business in this state” to include the following considerations (Sec. 2):
• An individual is part of a controlled group of corporations with a component member who has a physical presence in the state; or
• An individual in an agreement with another individual who has a physical presence in the state and is acting in capacity for the latter.  

• Exempts the following activity from being considered as “doing business in this state” (Sec. 2):
• The purchase of advertising by an out-of-state retailer to be delivered in Colorado;
• The affiliate marketing agreement between an out-of-state retailer and an in-state independent contractor, in which the in-state contractor refers customers to the out-of-state retailer for commission; and
• The agreement between an in-state and out-of-state entity, in which the cumulative gross sales receipts that the out-of-state entity paid to the in-state entity total less than $50,000 in any given year.

• Specifies that if any provision or application of this bill is considered invalid, then that invalidity does not affect the validity of the other provisions or applications of this bill (Sec. 3).

Full Bill Text