Colorado’s firearms and ammunition excise tax took effect on April 1, 2025, making it the first state to impose a tax of this nature by a citizen’s vote. The tax quickly created complications for a marketplace facilitator that enabled sales of firearms, firearm precursor parts, and ammunition on its platform, as there was uncertainty around who would be responsible for collecting the 6.5% excise tax.
PLR 25-002, released on June 30, 2025, addressed this issue. In this case, third-party sellers are responsible for listing their items for sale on the platform and handling fulfillment directly by shipping ammunition to customers or firearms to licensed dealers. The marketplace facilitator does not initiate the transactions, take ownership or possession of the items sold, or deliver the products. The Department concluded that the marketplace facilitator is not considered a vendor under Colorado law for purposes of the firearms and ammunition excise tax. In Colorado, vendors are defined as entities doing business in the state as ammunition vendors, firearms dealers, or firearms manufacturers. The excise tax applies to the net taxable sales from retail sales of firearms and related products made by such vendors.
The ruling emphasizes that the term “marketplace facilitator” is relevant for sales tax purposes but does not extend to excise tax obligations under this specific statute. Since the company does not qualify as a vendor and only facilitates the transaction, the third-party sellers are responsible for remitting the excise tax. This determination clarifies that facilitators are not liable for excise tax collection on firearm-related sales, provided they do not take possession or title of the goods. (Colorado Department of Revenue, Private Letter Ruling 25-002, June 30, 2025)