Spotlight On: What is the Service/Vendor Fee?
The GREAT news is that the service/vendor fee is NOT a fee at all but the amount of money that a retailer is allowed to retain for collecting and remitting the required state sales tax ON TIME! The purpose of the state sales tax service fee is to assist Colorado retailers in complying with the obligation to collect and remit sales tax. Here’s the details:
- If your taxable sales are $1,000,000 OR LESS for any filing period, the service fee allowed is 4% with a maximum amount of $1,000.
- If your taxable sales are GREATER than $1,000,000 for any filing period, NO vendor fee is allowed.
- When applying these rules, a retailer’s taxable sales from ALL locations are considered.
- Your payment must be received by the due date to qualify for the vendor fee.
- Service fee information can be found in the DR 1002 – Colorado Sales/Use Tax Rates.
Please note the DR 1002 is updated twice yearly on January 1st and July 1st.
Learn more about the Service Fee
View this week's tax tip here
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