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TR 31: Nexus

To determine if a vendor must collect a city's sales tax the vendor must first determine if there is "nexus" between the vendor and the city. To have nexus there must be a connection between a taxing jurisdiction and a vendor before the jurisdiction may require the vendor to collect the jurisdiction's tax. A vendor must meet the definition of "engaged in business in the city" for the City of Boulder to require it to collect the City of Boulder's sales/use tax.

The Boulder Revised Code states at section 3-1-1 "Engaged in business in the city means performing or providing services or selling, leasing, renting, delivering, or installing tangible personal property for storage, use, or consumption within the city. Engaged in business in the city includes, without limitation, any one of the following activities:

  1. Directly, indirectly, or by a subsidiary, maintaining a building, store, office, salesroom, warehouse, or other place of business within the city;
  2. Sending one or more employees, agents, or commissioned sales persons into the city to solicit business or to install, assemble, repair, service, or assist in the use of its products, or for demonstration, or for any other reason;
  3. Maintaining one or more employees, agents, or commissioned sales persons on duty at a location within the city;
  4. Owning, leasing, renting, or otherwise exercising control over real or personal property within the city; or
  5. Making more than one delivery into the city within a twelve-month period."


  1. A carpet store that is located outside the City of Boulder sells carpet and delivers and installs it for customers in Boulder. The store has created nexus by performing services inside the City. Therefore, the store is required to be licensed with the City of Boulder and collect sales tax.
  2. A national women's store that is located in Boulder sends out catalogues to Boulder residences. The catalogue warehouse is in New Jersey and all shipments will be made from there. The store will have to collect Boulder sales tax on deliveries shipped from New Jersey, because the store has created nexus by having a location in the City.
  3. A computer leasing company located outside of the City of Boulder leases computer systems to Boulder vendors. The leasing company is required to have a sales and use tax license from the City because it is renting personal property within the City.