How Should E-Commerce Firms in Colorado Comply wit...

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How Should E-Commerce Firms in Colorado Comply with New Sales Tax?

Online retailers and other e-commerce companies in Colorado will now have to abide by new rules on Internet sales taxes.

The new regulations primarily focus on a business’ physical presence, which can mean different things. The changes follow the US Supreme Court’s decision to change the rules in late June.

Physical Presence

Since most e-commerce firms have no physical stores, there are other ways to determine if you have a physical presence in Colorado. This includes having a warehouse or an office in the state. Those with sales representatives are also considered to have a physical presence.

For instance, you don’t have to collect sales taxes if you sold an item to a customer outside of Colorado, provided that you have no traditional store, warehouse, office or sales representative in that particular state.

Intra-state sales, such as a Denver-based company selling an item to some from Fort Collins, will be subject to sales taxes. Since the new rules will incur more expenses, e-commerce firms should find ways on how to increase their revenue to cover for the additional costs.

Knowing Your Market

Better search engine optimization (SEO) serves as one way to expand your Internet presence, and gain more customers in the process. In Denver, SEO services and campaigns will depend on your target market. It’s important to know the habits of your target customers, particularly their Google search habits.

An analysis of Google Trends data in 2017 showed that people in Colorado searched for handerpants, swim briefs and tube socks more frequently than those in other states. The popular search terms likely changed for this year, which means that you need to be constantly updated about trending topics among consumers.

The new sales tax could be an additional financial burden for many e-commerce firms, but it should prompt them to think of ways on how to make more money. A digital marketing campaign will be among those ways.

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