Taxes / State tax rules / Colorado
Selling on eBay, Poshmark or Etsy from Colorado: sales tax and 1099-K rules
Since October 1, 2019, a marketplace facilitator has all of a retailer's liabilities, obligations and rights for sales that marketplace sellers make through its marketplace (C.R.S. § 39-26-105(1.5)), so the facilitator, not the seller, collects Colorado's 2.9% state sales tax on them, and a seller doesn't count those sales toward its own $100,000 economic nexus test. For Form 1099-K, the Colorado Department of Revenue's pages couldn't be read for this check and the statutes read don't address it, so no Colorado rule is stated here; the federal test is over $20,000 in more than 200 transactions.
General information, not tax advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
Colorado in short
- General sales tax:
- Yes, 2.9% state rate
- Marketplace facilitator law:
- Yes: C.R.S. §§ 39-26-102(3)(c), (5.8) and (5.9) and 39-26-105(1.5) (House Bill 19-1240), since Oct 1, 2019
- When a marketplace must collect:
- retail sales in Colorado of more than $100,000 in the previous calendar year, or in the current calendar year (then from the first day of the month after the 90th day after passing it), counting all sales by marketplace sellers through its marketplace (C.R.S. § 39-26-102(3)(c))
- Form 1099-K:
- No state rule stated on the pages checked
Who collects the tax on a marketplace sale
For sales that marketplace sellers make in or through its marketplace, a marketplace facilitator has all of the liabilities, obligations and rights of a retailer or vendor, even where the seller, as a multichannel seller, has or needs its own license (C.R.S. § 39-26-105(1.5)(a)), and it counts those sales toward its own $100,000 test (§ 39-26-102(3)(c)(II)(A)).
If you sell only through marketplaces
A marketplace seller doesn't count sales made through a facilitator's marketplace toward its own $100,000 test (§ 39-26-102(3)(c)(II)(B)), and doesn't have a retailer's obligations for those sales if it can show the facilitator contracted to collect and remit the tax, or, at the seller's request, gave it a certification, received in good faith, that the facilitator is registered and will collect (§ 39-26-105(1.5)(c)). The Department of Revenue's guidance couldn't be read for this check, so this page doesn't say whether a Colorado seller who sells only through marketplaces needs its own license.
The law: C.R.S. §§ 39-26-102(3)(c), (5.8) and (5.9) and 39-26-105(1.5) (House Bill 19-1240), effective .
"a marketplace facilitator has all of the liabilities, obligations, and rights of a retailer or vendor under subsection (1) of this section and this article 26"
"A marketplace seller shall not include any sales made in or through a marketplace facilitator's marketplace."
"and section 4 of this act take effect October 1, 2019."
Sources: Colorado Revised Statutes 2024, Title 39 (Taxation); House Bill 19-1240 (signed act).
Colorado's sales tax
Colorado's state sales tax is 2.9% of the amount of the sale (C.R.S. § 39-26-106(1)(a)(II), "two and ninety one-hundredths percent"), with schedules set so that no tax is charged on a sale of 17 cents or less. Local sales taxes are separate and aren't covered on this page.
"a tax at the rate of two and ninety one-hundredths percent of the amount of the sale"
Sources: Colorado Revised Statutes 2024, Title 39 (Taxation).
Form 1099-K: Colorado and the federal test
The Colorado Department of Revenue's pages couldn't be read for this check (tax.colorado.gov showed this site's crawler a challenge on October 18 and 19, 2026), and Title 39 (Taxation) of the Colorado Revised Statutes, 2024 edition, read in full for this page, doesn't mention Form 1099-K or IRC § 6050W, so no Colorado 1099-K rule is stated here.
The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.
Sources: Colorado Revised Statutes 2024, Title 39 (Taxation).
Worked examples
State tax on a $40 marketplace sale to a Colorado buyer
At the 2.9% state rate, a $40.00 taxable item carries $1.16 of state sales tax, which the marketplace facilitator collects as the retailer for that sale. Local taxes for the delivery address are left out of this figure.
Marketplace sales don't count toward your own $100,000
A seller outside Colorado has $90,000 of Colorado sales through marketplaces and $30,000 direct in 2025. Under § 39-26-102(3)(c)(II)(B) it counts only the $30,000, which doesn't exceed $100,000; the facilitators count the $90,000 toward their own tests.
Passing $100,000 partway through the year
A seller whose own direct Colorado sales first exceed $100,000 on March 10, 2026 is doing business in Colorado under § 39-26-102(3)(c)(I)(B) from the first day of the month after the 90th day after that, which is July 1, 2026 (the 90th day is June 8).
Edge cases and details
- A marketplace can be physical: C.R.S. § 39-26-102(5.8) defines it as a physical or electronic forum, including a store, a booth, an internet website, a catalog or a dedicated sales software application.
- A person that only provides internet advertising services or lists products for sale, and doesn't otherwise meet the definition, isn't a marketplace facilitator (§ 39-26-102(5.9)(b)).
- If a facilitator shows it made a reasonable effort to get accurate information and failed to collect because the seller gave it incorrect information, the facilitator is relieved and the seller is liable for the uncollected tax plus penalties and interest; that relief doesn't cover the facilitator's own sales or sales for an affiliated seller (§ 39-26-105(3)(b)).
- The economic nexus test doesn't apply to a person already doing business in Colorado through a physical presence such as an office, warehouse or a resident employee working from a home office (§ 39-26-102(3)(a) and (3)(c)(III)).
What to do
- Keep each marketplace's sales report and its contract terms or certification that it collects Colorado tax; § 39-26-105(1.5)(c) ties the seller's relief to one of the two.
- If you also sell direct to Colorado buyers, count only those direct sales against the $100,000 test, and check with the Department of Revenue or a tax professional about licensing and local taxes for them.
- If a 1099-K arrives, compare it with the platform's sales report and check with a tax professional about how it fits your returns.
Common questions
When did Colorado's marketplace facilitator law take effect?
October 1, 2019. Section 17 of House Bill 19-1240 made the new marketplace definitions and section 4, which added C.R.S. § 39-26-105(1.5), effective that day.
Do my marketplace sales count toward Colorado's $100,000 threshold for me?
No. C.R.S. § 39-26-102(3)(c)(II)(B) says a marketplace seller shall not include any sales made in or through a marketplace facilitator's marketplace; the facilitator counts them instead.
What is Colorado's state sales tax rate?
2.9%: C.R.S. § 39-26-106(1)(a)(II) imposes the tax at two and ninety one-hundredths percent of the amount of the sale. Local sales taxes are added separately.
Related
- Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules
- California: sales tax and 1099-K rules
- Connecticut: sales tax and 1099-K rules
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax advice
This page summarizes Colorado's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.
Sources
Official pages this page is built from, with the day each was read.
- Colorado General Assembly, Office of Legislative Legal Services: Colorado Revised Statutes 2024, Title 39 (Taxation); read . § 39-26-102(3)(c), (5.8), (5.9), (6): economic nexus, marketplace and facilitator definitions; § 39-26-105(1.5) and (3)(b): facilitator duties, seller relief, liability relief; § 39-26-106(1)(a)(II): 2.9% rate; no mention of Form 1099-K or IRC § 6050W in Title 39.
- Colorado General Assembly: House Bill 19-1240 (signed act); read . Section 4 adds § 39-26-105(1.5); section 17 makes it and the marketplace definitions effective October 1, 2019.
- IRS: Understanding your Form 1099-K, reviewed . The federal 1099-K test.
- IRS: Instructions for Form 1099-K, reviewed . Both parts of the federal test counted for the calendar year.
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