I'm a new CO resident and need help understanding this. The "Learn More" states
"Consumer use tax is tax on online or out-of-state purchases where you did not pay Colorado sales tax to the seller. Enter the total of all online and out-of-state purchases where a Colorado sales tax was not paid and the program will calculate the Colorado use tax for you."
Is this saying that I should have kept track of all online purchases, their amounts, and whether they included state tax? I don't have this information. I've made purchases from Amazon, Ebay, etc., and I assume that they collect appropriate taxes. Can I put zero here?
It would seem overly burdensome to have to poor through every single online purchase from the past year to see whether state tax was collected.
Update: tax.colorado.gov indicates that "Taxpayers may confidentially and without fear of criminal prosecution report zero on the use tax line of their individual income tax return." So I'm inclined to leave it blank.
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States require residents to report sales tax (use tax) when you buy something out-of-state and paid no sales tax.
Leaving the use tax box blank or entering $0 does not absolve you of use tax liability. It’s possible you could face a use tax audit, particularly if you purchased high-dollar items or were running a business.
Colorado says, “However leaving it blank does not mean that the taxpayer is formally stating there is no use tax liability … The Department's working assumption will be that the taxpayer either had no use tax liability or they chose to report it through one of the other methods available to them.”
Learn more Consumer Use Tax | Frequently Asked Questions
I've done some research and it looks like most reputable online retailers (Amazon, Ebay, AliExpress, etc.) include state sales tax in their transactions.
Yes. Most companies collect sales tax. If you made a lot of small eBay or Etsy purchases, for example, from individuals, they are the ones who probably will not charge sales tax.
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