When outdoor sporting-goods retailer Cabela’s Inc. opens a long-awaited store in Wheat Ridge in 2008, state residents who purchase goods online or through the company’s catalog will get a break – no sales tax.
According to a signed 2004 annexation-and-development agreement between Wheat Ridge and Cabela’s, the retailer’s decision to build was contingent on receiving a “favorable ruling” from the state Department of Revenue.
James Powell, a Cabela’s spokesman, declined to comment on that issue.
John Vecchiarelli, senior director of taxation for the Colorado Department of Revenue, wouldn’t specifically comment on Cabela’s. But he said the department doesn’t “rule” in favor of any retailer regarding sales- tax collection.
Colorado residents who buy any out-of-state items by catalog or online – and don’t pay sales tax – are responsible for paying an equivalent “use tax” through a state form, said Vecchiarelli.
Cabela’s, based in Sydney, Neb., has asked in several states that it not collect sales taxes for online and catalog purchases by in-state residents as a condition of building a new store.
Patrick Goff, deputy city manager for Wheat Ridge, said “the city had nothing to do with” the online sales-tax issue and did not lobby on behalf of the retailer to the Department of Revenue.
“They do this in every state, I believe,” he said.
In August, Cabela’s won Wheat Ridge City Council approval to build a 185,000- square-foot store on 40 acres southwest of Interstate 70 and Colorado 58. The store is expected to bring Wheat Ridge more than $1 million in annual sales- tax revenue.
When complete, the store is expected to draw 35,000 vehicles on weekends. To date, Jefferson County and the Colorado Department of Transportation have already committed $70 million of $100 million for site improvements.
A 1992 U.S. Supreme Court ruling requires online and catalog retailers to collect state sales tax from shoppers if they live in the state where the retailer has a physical presence, or “nexus.”
Since its online and catalog operations are based in Nebraska, Cabela’s claims it is not required to collect sales taxes on such purchases by residents in other states – even if the company has stores there.
Cabela’s has “asked us to come out with an advisory ruling on their situation, whether they are required to collect Maine sales tax if they were to locate here, on catalog sales and online sales,” said Peter Beaulieu, director of the sales-, fuel- and special-taxes division for Maine’s revenue department. “But individuals would still be required to pay the 5 percent use tax for any online or catalog purchase.”
C.C. Filson, a Seattle-based outdoor outfitter, opened its first location outside of Seattle this year in Cherry Creek.
The company, which is primarily an Internet and catalog retailer, now collects sales tax for online purchases made by Colorado customers.
“We service our customers in Colorado through our store, so we feel it is important to collect the tax,” said company chairman Doug Williams.
He said he is not concerned that Cabela’s would have a competitive advantage.
“It’s much more of an economic-development issue for the state than it is a competitive one,” said Williams, whose company sells to Cabela’s.
Staff writer Kristi Arellano contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
