Does an online marketplace facilitator have to remit Colorado's firearms and ammunition excise tax on guns and ammo sold by third-party sellers through its platform?

Plain-English summary

Colorado created a new firearms and ammunition excise tax — a 6.5% tax on the net taxable retail sale of firearms, firearm precursor parts, and ammunition — that took effect in 2025. The statute makes the "vendor" responsible for remitting it. A company that runs an online marketplace (where independent sellers list and sell their own guns and ammo) asked whether it has to remit that excise tax. The Department said no.

The reason is who counts as the "vendor." For the excise tax, a vendor is "an ammunition vendor, firearms dealer, or a firearms manufacturer." The marketplace here never takes title to or possession of any product: third-party sellers list the items, set up the transaction, and ship them — ammunition directly to the buyer, and firearms to an in-state federally licensed dealer (FFL) for the background check before transfer. The marketplace just facilitates and collects ordinary sales tax.

The Department drew a clean line between two bodies of law. "Marketplace facilitator" is a sales tax term. Sales tax law treats a marketplace facilitator as a retailer, so the platform does collect and remit sales tax on Colorado deliveries. But the excise tax is a separate statute that puts the duty on the vendor — the actual seller of the firearm or ammunition. Because the marketplace is not the seller and never owns the goods, it is not the vendor, and the third-party seller remains responsible for the excise tax.

What this means for you

Online marketplaces selling firearms or ammunition

Being a marketplace facilitator for sales tax does not automatically make you the excise tax vendor. If you never take title or possession of the firearms, precursor parts, or ammunition — sellers list, set up the sale, and ship to the buyer or to an FFL — the excise-tax remittance duty stays with the seller. Keep the two obligations mentally separate: you still collect and remit ordinary state sales tax as a facilitator.

Third-party sellers (gun and ammo dealers) on a marketplace

Don't assume the platform covers the excise tax the way it covers sales tax. As the actual vendor of the firearm, precursor part, or ammunition, you are the one "doing business in this state" by retail sale, and the 6.5% excise tax is your responsibility to remit.

Accountants and tax professionals

The whole ruling turns on the gap between the sales-tax definition of "marketplace facilitator" (§ 39-26-102(5.9); Special Rule 44 makes it a retailer for sales tax) and the excise-tax definition of "vendor" (§ 39-37-103(18)). The marketplace-facilitator-as-retailer rule lives in the sales tax title and does not import into the firearms excise tax. Title/possession and "who is the seller" are the controlling facts.

Common questions

Q: Does an online gun marketplace owe Colorado's firearms excise tax?
A: Not if it is only a marketplace facilitator that never takes title or possession. The Department ruled the platform is not the "vendor," so it does not remit the 6.5% excise tax.

Q: Then who pays the firearms excise tax?
A: The vendor — the actual seller (an ammunition vendor, firearms dealer, or firearms manufacturer) who makes the retail sale.

Q: Doesn't the marketplace collect tax on these sales?
A: It collects and remits ordinary sales tax as a marketplace facilitator. The excise tax is a separate tax with a different responsible party (the vendor).

Q: Where do the firearms actually go?
A: Sellers ship ammunition directly to buyers, and ship firearms to an in-state federally licensed dealer (FFL) who runs the background check and processes the paperwork before transferring the gun to the buyer.

Q: Can my business rely on this ruling?
A: No. A private letter ruling binds the Department only for the taxpayer and facts it was issued to and cannot be relied on by anyone else. It also doesn't address self-collected home-rule city taxes.

Citations and references

Statutes and rules:
- § 39-37-104(1), C.R.S. (6.5% firearms/ammunition excise tax; vendor remits)
- § 39-37-103(18), C.R.S. (definition of "vendor")
- § 39-37-103(3), (16), C.R.S. ("doing business in this state"; "retail sale")
- § 39-26-102(5.9) and § 39-37-102(5.9)(a), C.R.S. (marketplace facilitator)
- 1 CCR 201-5, Special Rule 44 ¶(1) (facilitator treated as retailer for sales tax)
- 1 CCR 201-1, Rule 24-35-103.5 (private letter ruling procedure)

Related Colorado rulings on who is the responsible seller/retailer and marketplace/agent status: [[gil-07-029-independent-distributor-sales-tax]], [[gil-07-017-taxability-of-call-center-services]].

Source

• Landing page: Colorado Letter Rulings
• Original PDF: PLR-25-002.pdf

Original ruling text

Office of Tax Policy
P.O. Box 17087
Denver, CO 80217-0087
[email protected]

PLR 25-002
June 17, 2025
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
Via Electronic Mail: XXXXXXXXX, XXXXXXXXX,
Re: Firearm Excise Tax Applicability to Marketplace Facilitators
Dear XXXXXXXXX and XXXXXXXXX:
You submitted a request for a private letter ruling on behalf of XXXXXXXXX (“Company”), to the Colorado
Department of Revenue (“Department”) pursuant to 1 CCR 201-1, Rule 24-35-103.5. This letter is the
Department’s private letter ruling. This ruling is binding on the Department to the extent set forth in 1 CCR
201-1, Rule 24-35-103.5. It cannot be relied upon by any taxpayer other than the taxpayer to whom the
ruling is made.
Issue
Whether Company, as a marketplace facilitator, is a vendor responsible for remitting the Colorado
firearms and ammunition excise tax levied on net taxable sales of firearms, firearm precursor parts, or
ammunition.
Conclusion
No. Company, as a marketplace facilitator, is not a vendor responsible for remitting the Colorado
Firearms and Ammunition Excise Tax on sales of firearms, firearm precursor parts, or ammunition.
Background1
Company is registered in Colorado as a marketplace facilitator (“MPF”). Company collects and
remits Colorado sales tax on any sale delivered to a customer in Colorado. Sellers can make sales of
tangible personal property, including sales of firearms and ammunition, through Company’s website to
customers across the nation, including to customers located in Colorado. Sellers on Company’s
marketplace are typically individuals or commercial businesses who use Company’s site to expand their
customer base. Sellers who sell ammunition through Company’s marketplace can generally ship the
ammunition directly to a customer like other tangible personal property. For sellers who sell firearms
1

Paragraph (4)(b)(ii) of 1 CCR 201-1, Rule 24-35-103.5 requires the request for a private letter ruling to include a statement of facts.
This section generally recites the statement of facts provided in the initial request or in any supplement or amendment thereto,
which is not an indication that the Department found such facts relevant to its analysis. Some relevant facts may be redacted or
omitted to ensure confidentiality as required by section 24-35-103.5(5), C.R.S. The terms used in this section to describe the factual
background are generally those of the requester.

PLR 25-002
June 17, 2025
Page 2

through the marketplace, sellers must ship the item to an in-state entity who holds a federal firearms
license (“FFL”) for a background check before transfer to the buyer. The in-state FFL may charge a
service fee to the buyer to conduct the background check and to process the paperwork before delivering
the firearm to the buyer. The in-state FFL is generally not the seller in Company’s transactions. Rather,
the owner of the property is the seller of the property to a purchaser located in Colorado, and Company
does not ever have title or possession of any item. Sellers (who may be a business or an individual) list
items for sale and ship to customers (for ammunition sales) or to an in-state FFL (for firearms). Company
never touches the product, i.e., does not take title to the product nor store the product in a warehouse.
Company does not have any federal excise tax obligations nor is it subject to any federal excise tax,
because it is not a seller of any firearms or ammunition.
Discussion
As a marketplace facilitator, Company is not a vendor responsible for remitting the Colorado Firearms and
Ammunition Excise Tax on sales of firearms, firearm precursor parts, or ammunition. Colorado imposes
an excise tax on vendors in the amount of 6.5% of “the net taxable sales from the retail sale of any
firearm, firearm precursor part, or ammunition in Colorado.”2 The vendor is responsible for remitting the
tax to the Department.3 For the purposes of this tax, vendors are defined as “a person doing business in
this state as an ammunition vendor, firearms dealer, or a firearms manufacturer or any combination
thereof.”4 For the purposes of this excise tax, “doing business in this state” is defined as “the selling,
leasing, or delivering in this state,…of firearms, firearm precursor parts or ammunition by retail sale…”
and a retail sale is defined as “all sales made within this state except wholesales sales.” 5
The term “marketplace facilitator” is a sales tax term.6 A marketplace facilitator is generally subject to the
duties and obligations of a retailer for sales tax purposes.7 As a marketplace facilitator, Company
contracts with marketplace sellers to offer for sale the seller’s tangible personal property, commodities, or
services, which include firearms, firearm precursor parts, and ammunition.8 While Company facilitates
these transactions through its marketplace, Company does not initiate transactions, nor does Company
ever take ownership or possession of the property being sold. Rather, the marketplace sellers list items
for sale and ships purchased items directly to customers (for ammunition sales) or to an in-state FFL (for
firearms). As a result, the marketplace seller, and not Company, is the vendor. Because Company, as
marketplace facilitator, is not the vendor in the transaction, Company is not responsible for remitting the
excise tax due on sales of firearms, firearms precursor parts, and ammunition.
Miscellaneous
This ruling is premised on the assumption that Company has completely and accurately disclosed all
material facts, that all representations are true and complete, and that Company has otherwise complied
with the requirements of section 24-35-103.5, C.R.S., and the rules promulgated pursuant thereto. The
Department reserves the right, among others, to independently evaluate Company’s facts,
representations, and assumptions. The ruling is null and void if any such fact, representation, or
assumption is incorrect and has a material bearing on the conclusions reached in this ruling. This ruling is
binding on the Department, and is subject to modification or revocation, in accordance with 1 CCR 201-1,
Rule 24-35-103.5.
The Department administers state and state-administered local sales and use taxes. This letter does not
address sales and use taxes administered by self-collected home-rule cities. You may wish to consult
2

Section 39-37-104(1), C.R.S.
Id.
4
Section 39-37-103(18), C.R.S.
5
Section 39-37-103(3) and (16), C.R.S.
6
Section 39-26-102(5.9), C.R.S.
7
1 CCR 201-5, Special Rule 44, paragraph (1).
8
Section 39-37-102(5.9)(a), C.R.S.
3

PLR 25-002
June 17, 2025
Page 3

with those local governments that administer their own sales or use taxes about the applicability of those
taxes. Visit our website at Tax.Colorado.gov for more information about state and local sales taxes.
Thank you for your request.
Sincerely,
Office of Tax Policy
Colorado Department of Revenue
This ruling cannot be relied upon by any other taxpayer other than the taxpayer to whom the
ruling is made.