When preparing my sales tax return, what supporting documents for my deductions should I retain?

While there are a variety of deductions allowed on the sales tax return, common deductions include the following: 

  • Non-taxable service sales: Invoice should clearly denote the type of service performed. 
  • Sales to other licensed dealers for purposes of taxable resale: Certificate from buyer’s  home state documenting buyer is a wholesaler. 
  • Sales shipped out of city: Shipping documents that can be traced to invoice.  Shipping receipts should include individual/company where item was shipped, address and invoice number.  Invoice should include purchaser’s name and shipping address. 
  • Sales to governmental, religious and/or charitable organizations: Valid exemption certificate from  buyer’s home state or a letter from IRS indicating exempt status, including name of organization and employer identification number (“EIN”).  Note: In order for purchases to be tax exempt, the organization must be conducting regular religious, charitable, scientific, literary, or educational business.  For example, a church that has tax exempt status would have to pay applicable sales and lodging taxes to a hotel if church members are on a ski vacation, even if the lodging services were paid with a church check.  

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1. Is Aspen a home rule city?
2. What is the purpose of the vendor’s fee deduction?
3. When preparing my sales tax return, what supporting documents for my deductions should I retain?
4. I over collected sales tax on several transactions. How do I account for this excess tax on my return?
5. Should sales tax be collected on transactions for deliveries to customers in Aspen city limits?
6. I am a subcontractor working on a project within Aspen city limits. Do I need to charge sales (or use) tax on construction materials purchased for the project by the general contractor?
7. What do I do if a purchaser insists they are exempt from tax but cannot produce the appropriate documentation?
8. Will I ever get audited?
9. Are direct sales to charitable organizations exempt from sales and lodging tax?
10. Are direct sales to governmental entities exempt from sales and lodging tax?
11. What do I need to keep on file when I make a sale to one of these entities?
12. How do I obtain a wholesale license for the State of Colorado?
13. If my business is service oriented, would I ever need to collect sales tax?
14. When would I deduct bad debts or returned goods on my sales tax return?
15. I rent out my home but only on a long term basis. Do I need to collect sales tax?