What is Colorado Sales Tax?
How much is sales tax in Colorado?
What’s important to know?
In this article, I will break down the Colorado Sales Tax rate so you know all there is to know about it!
Keep reading as we have gathered exactly the information that you need!
Let me explain to you the sales tax in Colorado once and for all!
Are you ready?
Let’s get started!
What Is The Sales Tax In Colorado
The current Colorado sales tax is 2.9% as a base rate.
However, the sales tax rates can vary depending on the specific Colorado city, county, or municipality.
Local sales taxes can vary between 0% to 8.3% depending on the specific city or county in Colorado.
As a result, you can expect both the base sales tax rate and local sales tax rate to amount to a range of 2.9% to 11.2% in Colorado.
If you want to know how much sales tax you must pay, you can use the Colorado Sales Tax Lookup tool provided by the state.
For example, if you do a search for “Denver” on the Colorado sales tax lookup tool, you’ll get the following result:
As you can see with this example, the applicable tax rate in Denver is showing up as 8.81% representing:
- 2.9% base sales tax
- 4.81% Denver sales tax
- 0.10% Scientific and Cultural Facilities District sales tax
- 1.0% Regional Transportation Tax
How Does Sales Tax Work In Colorado
Let’s look at how sales tax works in Colorado.
Colorado Account Number
When you register for sales taxes in Colorado, you will get a Colorado Account Number (CAN) representing an eight-digit number that identifies your business with the Colorado Department of Revenue.
You can look up Colorado Account Number in case you want to see if a particular company or business is duly registered in Colorado.
Sales Tax Filing Information
What Is Sales Tax
Sales tax refers to a “consumption tax” imposed by the state of Colorado on the sale of goods and services to Colorado residents.
Typically, the sales tax is charged at the point of sale.
In other words, when a company, retailer, or individual makes a taxable sale, it must collect the sales tax at the moment of the sale from the buyer and remit that to the state.
A company or business having sufficient nexus with the state of Colorado will be required to pay Colorado state sales tax to comply with the state tax laws.
What Is Nexus
You must charge sales taxes in Colorado to the extent you have sale tax nexus with the state.
Every state will have different requirements to establish a “sales tax nexus” so you’ll need to consider the specific requirements for Colorado.
Generally, having sales tax nexus means that you have:
- A physical location in the state of Colorado
- You have someone representing you in the state of Colorado
- E-commerce businesses have a Colorado affiliate
Sales Tax Registration
If you are looking to do business in Colorado, you must register your company with the Colorado Department of Revenue to ensure they collect the proper sales tax.
In Colorado, it’s important that you do your research carefully with regards to the applicable sales tax that you may owe as the state has complex tax rules.
In the state of Colorado, you may have sales taxes levied by:
- Special purpose districts
You can apply for a sales tax license or renew your sales tax license by completing the state requirements.
Sales Tax Filing Requirements
All businesses engaged in selling, renting, or leasing tangible personal property are required to get a sales tax license and sales tax account in Colorado.
You will generally not have to pay sales taxes on services sold although some cities or counties will impose a sales tax on services (be sure to verify the applicable taxes on services).
Here are the Colorado sales tax filing requirements as of the writing of this post:
- If you collected less than $15 in sales taxes per month, you’ll need to remit once a year
- If you collected less than $300 in sales taxes per month, you’ll need to remit quarterly
- If you collected more than $300 in sales taxes per month, you’ll need to remit monthly
- Wholesale businesses collecting less than $180 per year can file annually
- Businesses paying more than $75,000 in state of Colorado sales tax must pay by Electronic Fund Transfer
Colorado Cities And Counties
Here are the different Colorado cities and counties that you may want to investigate to determined and calculate your sales tax liability.
Main Colorado Counties
- Adams County
- Arapahoe County
- Boulder County
- Broomfield County
- Chaffee County
- Delta County
- Denver County
- Douglas County
- Eagle County
- El Paso County
- Elbert County
- Fremont County
- Garfield County
- Jefferson County
- La Plata County
- Larimer County
- Logan County
- Mesa County
- Montezuma County
- Montrose County
- Morgan County
- Otero County
- Park County
- Pitkin County
- Pueblo County
- Rio Blanco County
- Routt County
- Summit County
- Teller County
- Weld County
Main Colorado Cities
- Castle Rock
- Colorado Springs
- Commerce City
- Fort Collins
- Grand Junction
- Wheat Ridge
Sales Tax Colorado Considerations
The state of Colorado actively enforces economic nexus for the purpose of collecting sales taxes.
If you are dealing with the state of Colorado in some form, you should determine if you have sufficient nexus with the state to justify registering for and paying sales taxes.
Also, as of October 1, 2019, Colorado requires that market facilitators collect and remit sales taxes to the state.
E-commerce businesses and remote businesses should consider destination sourcing to determine if they are required to pay sales taxes in Colorado.
Colorado Sales Tax Takeaways
So there you have it folks!
Does Colorado have sales tax?
What is Colorado sales tax?
Yes, Colorado is a state where you have to pay sales tax.
If you are doing business in Colorado, invoicing clients, selling to customers, or otherwise doing business in Colorado, you’ll need to make sure you charge the appropriate level of sales tax.
The CO sales tax is 2.9% representing the base sales tax rate.
In addition to the base rate, you’ll need to consider sales taxes levied by cities and counties as well that can range between 0% to 8.3%.
As a result, your total sales tax liability can range between 2.9% all the way to 11.2% depending on where you are doing business in Colorado.
Now that you know more about the Colorado state sales tax rate and how it works, good luck with your research!
Let’s look at a summary of our findings.
Understanding Colorado Sales Tax
If you enjoyed this article on what is sales tax in Colorado, I recommend you look into the following legal terms and concepts. Enjoy!
You May Also Like Related to Colorado Sales Taxes
Certificate of exemption
Effective tax rate
Goods and services tax
Gross receipt tax
Point of purchase
Sales tax license
Sales tax returns
Single special event license
Value added tax
Related to Taxes and Tax Terms
Proportional tax vs regressive tax
Types of taxation
What are payroll deductions
What are tax brackets
What is a service tax
What is excise tax
What is federal income tax
What is FICA
What is flat tax
What is progressive tax
What is regressive tax
What is sales tax
What is state income tax
What is tax exemption
What is tax rate
What is tax refund