Sales Tax Responsibilities of Marketplace Sellers
If you sell products online through a marketplace facilitator, you are considered a marketplace seller. As of October 1, 2019, marketplace sellers are no longer required to collect and remit state sales tax for products sold through a marketplace facilitator.
For more information, review the Marketplace Guide from the Colorado Department of Revenue. It contains information for both marketplace facilitators and marketplace sellers.
Online Sellers Who Sell Through Other Channels
What is a multichannel seller?
If you also sell products from your own website and/or in a store in addition to the sales you make via a marketplace facilitator, you would be considered a multichannel seller. This means you would need to collect and remit state sales tax for the sales made in your shop or on your website. You would not need to collect and remit state sales tax for products sold via a marketplace facilitator.
Additionally, a marketplace facilitator can operate a marketplace in a physical location. If you sell products via your own website/store and in a physical marketplace, you are also a multichannel seller.
If you only sell products via a marketplace facilitator and at special events (an event held in the same location 1 or 2 times per year), you may not be considered a multichannel seller. Visit the Special Event Sales Tax section of our website to learn more about your tax responsibilities at special events.
Here are some examples to help illustrate who is or is not a multichannel seller:
- Example 1: You make handcrafted hammocks that you sell on Etsy. Etsy is the only place you sell your hammocks. In this circumstance, you have no obligation to collect or remit state sales tax in Colorado, because you are a marketplace seller.
- Example 2: Your handcrafted hammocks are sold on Etsy, but you also have a brick and mortar store in Johnstown where you sell your hammocks. You have no obligation to collect and remit state sales tax on the Etsy sales, but you must collect and remit state sales tax on the sales made from your store in Johnstown. In this example, you are a multichannel seller.
- Example 3: You sell your hammocks on Etsy, but also at a crafts fair that is held once per year in Estes Park. You have no obligation to collect and remit state sales tax on your Etsy sales. However, you will need to file a Special Event Sales Tax Return for the crafts fair in Estes Park. In this example, you would not be considered a multichannel seller.
If you only sell products via your own website, you are an online retailer. This means your sales tax responsibilities are the same as a brick and mortar retailer. Visit the Sales & Use Tax section of our website to learn more about your tax responsibilities.
Certification of Registered Marketplace Facilitator
The DR 1290 form has been provided by the Colorado Department of Revenue for use by marketplace sellers, as applicable. Please refer to the form instructions for more information. Click here to view the DR 1290.