Sales/Use/Indirect:
Colorado DOR Says Taxable Telecom Includes Call Conferencing and Stresses 30-Day Bundled Services Deadline

Sales & Use Tax Topics: Telecommunications, Colo. Dept. of Rev. (5/23). In released administrative guidance, the Colorado Department of Revenue (Department) explains that Colorado imposes sales tax on intrastate telephone and telegraph services and that telephone services subject to Colorado taxation includes transmission over circuitry “as well as call conferencing, routing, and switching.” However, the guidance does not specifically address web-based, video, and/or advanced conferencing services.

Regarding bundled services, the guidance explains that when nontaxable services are aggregated with and not separately stated from taxable services, the provider of such services may collect the tax only on the taxable intrastate telephone and telegraph services if such provider follows Department procedures. To this end, the provider of such services must maintain for three years documentation of the allocation of services provided that are taxable and nontaxable, because such documentation is subject to audit and the service provider is liable of any uncollected tax. The guidance also explains that such provider must notify the Department of the percentages of taxable and nontaxable services in a package of aggregated services “within 30 days of use on any invoice.” Please contact us with any questions.