Sales And Use Tax General Information And Reference Guide (Page 2 of 12) in pdf

Colorado Sales and Use Tax 2

Tax Information:

The Department of Revenue’s online tax system Revenue Online, offers convenient and secure access to conduct business with the department

on a computer, laptop, smart phone or tablet. You may verify sales tax license or exemption certiﬁcate numbers, view local tax rates, ﬁnd

local taxes by address and more. Sign up for access to manage your tax account and ﬁle and pay online at

To view the most up-to-date news and information from the department, visit the Taxation Web site at

Information referenced in this publication, Colorado tax forms (designated by a DR number) and FYI publications are available at

If you plan to open a business in Colorado, prepare sales and use tax returns, or if you’re interested in learning more about Colorado tax laws

then this booklet is for you. If you are new to Colorado sales and use taxes, the Glossary on pages 10 and 11 may be helpful. See page 12 in

this booklet for details on the beneﬁts of using the department’s online tax system, Revenue Online.

Colorado Sales Tax

state-collected local taxes, see publication FYI Sales 62 “Guidelines for

Determining When to Collect State-Collected Local Sales Tax.”

Colorado imposes a sales tax of 2.9% percent on retail sales transactions

of 18 cents or more. A 3% tax may still be required on sales or leases

Colorado Consumer Use Tax

originating prior to 1/1/200l. Although, many cities and counties impose

their own local sales/use tax on purchases and transactions within their

Consumer use tax is a complement to state sales tax. Consumer use

boundaries, the Colorado Department of Revenue (CDOR) collects

tax is payable to the state by individuals and businesses when sales

sales tax for approximately 330 cities and counties, and special districts.

tax is due but has not been collected. Individuals and businesses have

These jurisdictions are referred to as “state-collected” or “statutory,”

always been required to pay sales or use tax on taxable purchases from

and include all Colorado counties that impose sales tax, with the

out-of-state vendors if the item is sold, leased, or delivered in Colorado

exception of Denver and Broomﬁeld counties which are home-rule

for use, storage, distribution, or consumption in the state. An example

would be when you purchase an item from an out-of-state retailer who

self-collected jurisdictions.

does not collect Colorado sales tax, then the use tax is due. A second

Cities and counties that have enacted a “home-rule” charter and have

example would be for items purchased over the Internet and no sales

elected to administer and collect their own local sales and use taxes are

tax is charged by the retailer.

referred to as “self-collected” or “home-rule.” Home-rule jurisdictions

Colorado state use tax is the same rate as the sales tax, 2.9%. With proof

must be contacted directly for information surrounding their

of payment, sales tax paid to another state may be credited against state

requirements when doing business in their jurisdictions.

use tax due in Colorado for a particular item. Use tax is also collected

See publication Colorado Sales/Use Tax Rates (DR 1002) for a list of

by some special districts.

all cities, counties and special districts in Colorado.

The Colorado Department of Revenue collects state and Regional

Goods

Transportation District/Scientiﬁc and Cultural Facilities District

For state-collected jurisdictions, most goods are subject to sales tax. An

(RTD/CD) and Regional Transit Authority (RTA) use tax, but does

example of goods exempt by law from state and state-collected local

not administer or collect county or city use tax. Local use tax is paid

sales taxes include, prescription drugs, insulin and insulin supplies, and

directly to the taxing authority to which it is owed or to county motor

vehicle ofﬁces. At their option, state-collected cities and counties may

medical supplies prescribed by a doctor.

charge use tax on motor vehicles, construction and building materials.

Some items such as food for home consumption and farm equipment

Self-administered local jurisdictions make their own use tax regulations

may be exempt from state sales and use tax but may not be exempt from

and must be contacted directly for information.

city, county and/or special district taxes.

Both individuals and businesses can ﬁle and pay consumer use tax online

Services

at The online system has built-in tax

Most services are not subject to Colorado sales tax. Exceptions to this

rates for the jurisdictions applicable to the business or residence address.

guideline include: rooms and accommodations; catering; commercial

The system calculates the amount of tax owed based on the purchase

gas and electric service; steam; and intrastate telephone and telegraph

total and will help you avoid errors and is easy to use.

services. The transportation of tangible personal property between a

Use tax payments may also be remitted to the Department of Revenue

retailer and purchaser is a service presumed to be not subject to sales

on a “Consumer Use Tax Return” (DR 0252). RTA use tax payments

or use tax. Transportation charges are not taxable if they are both (1)

may be remitted through Revenue Online or on the “RTA Consumer

separable from the sales transaction, and (2) stated separately on a written

Use Tax Return” (DR 0251). Individuals can ﬁle the “Individual

invoice or contract. See publication FYI Sales 29, “Special Regulation:

Consumer Use Tax Return” (DR1306) if unable to ﬁle online. Contact

Transportation Charges” for more information. Dealer preparation and

local jurisdictions and home-rule cities directly about use taxes owed

handling charges for motor vehicles are taxable.

to counties and cities. For more detailed information on consumer use

If a service is provided after the sale of tangible property, the serviced

tax, see publication FYI General 10 “Consumer Use Tax.”

charge must be itemized separately on the invoice/bill to become a

nontaxable service. For example, if you order cabinets with an agreement

Who Must Have A License

to install, the installation charges must be separately stated on the invoice.

If it is not separated, the entire invoice is taxable. In addition, fabrication

eneral

uidelines

labor used in preparing the tangible property is never exempt, such as

A Colorado sales tax license is proof that a business is properly registered

the labor used to manufacture curtains, cabinets, tables, chairs, window

with the Department of Revenue and is authorized to make tax-free

coverings, etc. See publication FYI Sales 52, “Service Enterprises” for

purchases of merchandise for resale and collect tax on the sale of the

more details.

merchandise.

For local sales/use tax rates, visit Revenue Online at

For more detailed information on

Sales And Use Tax General Information And Reference Guide Page 2

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