Colorado Marketplace Tax and Retail Delivery Fee Collection FAQ

What is a Marketplace Facilitator (MPF)?

MPF is commonly defined as a business that contracts with third-party sellers to “facilitate” the sale of physical property, digital goods, and/or services owned and supplied by the third party through an online store or “marketplace.” Based on this definition, Amazon is a marketplace facilitator.

What is Marketplace Tax Collection (MTC)?

MTC is a common term Amazon uses for marketplace facilitator laws that identify the MPF as the party responsible to collect and remit sales and use taxes and/or regulatory fees on products shipped to customers in those jurisdictions (state, county, city, district) that have enacted such laws.

What is unique about Colorado’s marketplace facilitator legislation?

Colorado’s marketplace tax collection rules apply to sales and use tax in state-administered jurisdictions. The state’s legislation does not include home rule jurisdiction taxes (jurisdictions which self-collect) which have not enacted ordinances to do so. As a result, orders destined to a home rule jurisdiction could have multiple parties (“the seller” and Amazon) responsible for individual jurisdictions that a total tax rate consists of.

For example, an order shipping to a home rule jurisdiction will have the applicable state-administered tax (state, county, district) which will be calculated by Amazon, however a home rule city tax cannot be calculated by Amazon, as this is a home rule jurisdiction tax and remains the seller’s responsibility.

Home rule jurisdictions must enact their own marketplace tax collection rules for Amazon to calculate, collect, and remit the home rule jurisdiction tax onto third-party seller orders. Otherwise, Amazon cannot collect home rule jurisdiction taxes and the tax obligation remains the responsibility of the sellers to remit.

For a complete list of home rule jurisdictions, go to page 9 of the Colorado Department of Revenue form DR1002, available on their sales and use tax website.

Do any home rule jurisdictions have Marketplace Tax Collection?

Taxes will move to Marketplace Tax Collection as local ordinance changes and are implemented by Amazon. Taxes collected by Amazon will be reflected in your order reports, available in Seller Central. For additional reporting information, go to Sales tax information in seller reports.

For other home rule questions or additional information, please contact your local home rule jurisdiction.

What taxes will Amazon calculate on third-party orders shipped to Colorado?

Amazon will calculate and collect state administered and participating home rule sales and use taxes (under MTC law), from buyers, and remit (as the taxpayer) to the appropriate tax authority. Amazon will not calculate and remit taxes for home rule jurisdictions if they have not enacted Marketplace Tax Collection legislation.

Will Amazon collect the Colorado retail delivery fee on third-party orders shipped to Colorado?

Yes, Amazon will collect the Colorado retail delivery fee from a buyer on applicable orders. The fee applies to a buyer’s whole order versus an individual item you sell. Due to this, the fee will not be included in your order or transaction detail pages, or payments reporting.

For additional information, go to the Colorado Department of Revenue Retail Delivery Fee website.

What tax am I as a seller responsible for on orders shipped to Colorado?

You may potentially still have an obligation to remit home rule sales and use taxes that Amazon cannot collect, even though you also cannot collect the home rule tax on orders using Amazon's Tax Calculation Services. Your responsibility depends on your business obligations. Please consult your professional tax advisor to determine the impacts of Colorado’s marketplace facilitator legislation on your business.

What is Amazon doing to support home rule tax calculations?

We are prioritizing enhancements to our Tax Calculation Services to support Colorado home rule jurisdictions that have not enacted marketplace tax collection legislation. In the meantime, we encourage you to work with your tax professional to determine any impact to your business.

How do I find orders shipped to Colorado to determine home rule city taxes?

Your Payments Date Range Report is the best option to locate orders shipped to a Colorado home rule jurisdiction.

1. Go to your Date Range Reports and click Generate Report. In the Generate date range report pop-up window select the following:
   
   1. Select Transaction.
   2. Select your desired Reporting Date Range.
   3. Click Generate a report.
2. When the report is ready, the Download button will appear under Action. You can open the report in Excel, Google Sheets, or a similar spreadsheet program.
3. Apply filters in your report starting on row 8 (headers for the columns):
   
   1. Filter column "order state" for Colorado and CO to capture all Colorado orders.
   2. Filter column "order city" for cities within Colorado that are home rule jurisdictions. For a complete list of home rule jurisdictions, go to page 9 of the Colorado Department of Revenue form DR1002, available on their sales and use tax website.
4. Product sales (amounts) are located in column M.

Additional resources

For more information, please visit Colorado's Department of Revenue website or read through the legislation HB19-1240.