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So now I am worried...

Based on this thread: www.etsy.com/teams/7722/business-topics/discuss/10372613/page/3/#

I opened my shop April of last year and I collected about $8 dollars in sales tax from 7 customers from Colorado. I did this thinking, "Better collect it so I don't get in trouble later and be asked to pay up for these transactions" So should I pay my customers back? I have "robbed" my customers and I owe each one from .60 cents to $1.90. I have now removed my sales tax since I have no idea what to do next

I've read the Department of revenue on getting a sales tax license and I relate to this category: Small Home Businesses -- If all retail sales are from a private residence and the gross sales are less than $1,000 a year then a small home business is not required to hold a sales tax license.

I'm not making 1k a year so I shouldn't get a sales tax license? Should I not tax Colorado? And should I be refunding my customers?

Please help!

13 Responses

We're talking about 8 bucks divided among seven people...
Yes - 8 bucks divided among seven people 0.0
Visit the CO State tax department. They might have an office in Boulder, if not, there's one in Downtown Denver. They're going to be the best people to help you. Don't worry, you aren't going to get in trouble. At most, you'd have some small fine, but I really wouldn't worry about it. They're really very helpful. I'd see the tax people before refunding customers.
If you didn't have a sales tax license then I don't think you could legally collect sales tax from your customers. I would refund them. If you had a sales tax license then you need to remit the tax to your state.
It 'appears' from what your state requires, that you do not need to collect sales tax at this time. The few people you did, I would just let it go.
Keep track of your sales for the future tho.
Thank you HopSkipJumpPaper!
You were very helpful in both threads.

The more informed I am, the less stressed I am getting.

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Inactive Etsy Member 4:50pm May 28, 2012 EDT
register with the state, they will ask you when you opened and make you remit those back taxes anyway
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Inactive Etsy Member 4:52pm May 28, 2012 EDT
Kim from GriffithGardens says

If you didn't have a sales tax license then I don't think you could legally collect sales tax from your customers.


actually, in CO you can. the state doesnt require a home based craft business to even get a sellers permit, if they have under $1000 in yearly sales, but they still are required to collect and remit the sales taxes
Do you plan to make $1000 a year or more?

Get a license. If your CO sales are that minimal, you are only required to file once a year. Then you will be prepared once your business grows.

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