State and Territorial Sales and Use Taxes
For several years, there has been much discussion and debate about sales and use taxes for products that are sold online through the internet. There are many resources online to explain this, but I’ll try to put it in words that are easy to understand. The current laws state if a retailer has a physical presence (also known as "Nexus") in a particular state, such as a store, business, office or warehouse, it is required to collect state sales or use taxes. I’ll show some examples below, using a $10.00 purchase, with appropriate taxes applied.
EXAMPLE 1: WattsRunning, a business who has a physical presence in the state of Colorado sells a book to Joe Smith, who lives in Pueblo, CO, 81003 is REQUIRED to collect state taxes from Joe
EXAMPLE 2: WattsRunning, a business who has a physical presence in the state of Colorado sells a book to Fred Jones in Dallas, TX, 75205, is NOT required to collect state taxes, HOWEVER, Fred is still OBLIGATED to pay those taxes with the state of Texas. This scenario is commonly used as a loophole, so neither the buyer, nor the seller pays taxes. In this case, it is ILLEGAL if one or the other does not pay the tax.
To avoid possible legal ramifications, WattsRunning will collect state sales taxes for all states (if applicable), Washington D.C., Puerto Rico and Guam. If you are outside of these areas, you are responsible for paying the sales or use tax(es).
Local and Regional Sales and Use Taxes
In addition to state and territorial sales taxes, WattsRunning will collect the additional local taxes if you live in the areas where these taxes are normally collected at the point of sale.
If you live in the county of Arapahoe, CO, you will be charged the current county tax.
If you live within the confines of the 7 county Regional Transportation District (RTD) tax area, you will be charged the current RTD tax.
If you live within the confines of the 7 county Scientific Cultural Facilities District (SCFD) tax area, you will be charged the current SCFD tax.
I’ll show two examples in the diagrams below.
EXAMPLE 1: Shows a purchase made by someone who lives in Boulder, CO, 80303. Boulder is not within Arapahoe County, but this zip code is listed within the areas for the RTD and SCFD tax area.
EXAMPLE 2: Shows a purchase made by someone who lives in Byers, CO, 80103. Byers is not within the RTD tax area, but this zip code is listed within Arapahoe County and the SCFD tax area.
The five states that don't have a sales tax -- Alaska, Delaware, Montana, New Hampshire, and Oregon -- aren't affected by this.
The Sales Tax Institute provides a range of services and other resources associated with sales tax law.
The Streamlined Sales Tax Governing Board maintains a website regarding tax law and compliancy.
If there are any questions regarding this policy you may contact us using the information below.
Last Revision: 2023-26-October