United States

Colorado: Employee Conducting Non-Sales Related Activities Created Nexus

Dec 11, 2017
From KPMG TaxWatch

Loading the player...

Recently, the Colorado Department of Revenue issued a private letter ruling addressing whether an employee’s presence in the state created nexus for an online retailer. The retailer made sales into Colorado, but had no office or inventory in Colorado. It did have a single-employee working remotely from his/her Colorado residence. The employee was not a sales representative, but was engaged in research and contract negotiations.

Under Colorado law, a retailer is required to collect and remit sales and use tax if it is “doing business” in the state. “Doing business” generally means selling, leasing, or delivering tangible personal property and engaging in certain activities related to the sale of property. The Department of Revenue concluded that the retailer was “doing business” in Colorado because it sold taxable goods to Colorado customers. In addition, the retailer had a Colorado-based employee. Citing to the National Geographic case, the Department concluded that the online retailer had substantial nexus with Colorado despite the fact that its employee’s activities were unrelated to the company’s sales transactions. Please contact Steve Metz at 303-382-7177 with questions on PLR 17-008.


For more information about TWIST or to view archived episodes, please visit our TWIST homepage.

 Subscribe to TWIST via iTunes, or  Subscribe via RSS.

To receive TWIST e-mails each Monday morning, make sure that state, local and indirect is checked off as one of your topics of interest on the KPMG TaxWatch registration site.


The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.