Overview of Colorado taxability based on origin
Due to its status as a home rule state, taxability in Colorado is more complicated than in many other states. Different jurisdictions (at the destination) will be taxable or not depending on where the sale is originating. The DLL is programmed to calculate the tax applicable taxes based on origin and destination.
This table should help to clarify what the DLL is doing when you pass it information. Please keep in mind that your particular tax liability may affect the taxability of your sales.
|Sale classification||State||County||City||County Transit||Local Jurisdictions|
|Intrastate, different county, different city||Taxable||Nontaxable||Nontaxable||Taxable||Taxable|
|Intrastate, same county, different city||Taxable||Taxable||Nontaxable||Taxable||Taxable|
|Intrastate, same city||Taxable||Taxable||Taxable||Taxable||Taxable|
This is the behavior when you pass an "S" for Sales to the DLL. Passing a "U" for Use tax or an "L" to look-up taxes based on your nexus tables will give differing results.
As a side note, the Avalara free tax calculators online will always give you the total tax for that location. This can result in an apparent discrepancy if you are comparing rates generated from the CalcTx32.dll tester to these free tools.