Amazon CO States

Will the new Amazon facility create Colorado sales tax nexus?

by Jennifer Dunn

Colorado Sales and Use Tax

Amazon recently announced it’s first facility in Colorado. This announcement comes on the heels of Amazon’s announcement earlier this year that they would begin collecting sales tax from their Colorado customers.

There’s been a bit of chatter online about whether or not this will mean that Amazon FBA sellers may find themselves required to register for a Colorado sales tax permit and collect sales tax from Colorado buyers.

Colorado Amazon Facility Facts

Amazon’s first Colorado facility will be located in the city of Aurora. Fortunately, it looks like the Aurora facility will be a “sort center.” The good news here is that – in our understanding after consulting with sales tax experts – sort centers do not create sales tax nexus based on inventory. In other words, if your products are in a sort center they are probably already in the “stream of commerce” and won’t create sales tax nexus for your business.

Of course, you may have sales tax nexus in Colorado due to other factors such as a location, personnel, etc. You can see exactly what Colorado (and other states) have to say about what creates sales tax nexus here.

You may be wondering which Amazon facilities are “fulfillment centers” (that create sales tax nexus) and which are “sort centers” (that don’t create nexus.) We have two handy guides right here:

Where are the Amazon Fulfillment Centers?

Where are the Amazon Sort Centers?

And for more information about Amazon sales tax, check out our FBA Sales Tax Guide.

Do you have questions or something to say about Amazon’s move into Colorado? Start the conversation in the comments or over on our Sales Tax for eCommerce Sellers Facebook Group!

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