Home Blog Colorado Sales Tax (Explained: All You Need To Know)

Colorado Sales Tax (Explained: All You Need To Know)

What is Colorado Sales Tax?

How much is sales tax in Colorado?

What’s important to know?

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:

What Is The Sales Tax In Colorado

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:

  • Cities 
  • Counties
  • Schools
  • Transportation
  • 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

  • Arvada
  • Aurora
  • Boulder
  • Brighton
  • Broomfield
  • Castle Rock
  • Centennial
  • Colorado Springs
  • Commerce City
  • Denver
  • Englewood
  • Erie
  • Evans
  • Fort Collins
  • Fountain
  • Grand Junction
  • Greeley
  • Lafayette
  • Lakewood
  • Littleton
  • Longmont
  • Loveland
  • Northglenn
  • Parker
  • Pueblo
  • Thornton
  • Westminster
  • Wheat Ridge
  • Windsor

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

  • The sales tax rate in Colorado is 2.9% base 
  • In addition to the base sales tax rate, you may also need to pay sales taxes to Colorado cities and counties with varying sales tax rates ranging between 0% to 8.3%
  • If you do business in Colorado or you have sufficient nexus with the state of Colorado, you will need to register for sales tax, collect sales taxes, and remit them to the state
  • The state of Colorado offers an online tool allowing you to look up the sales tax rates applicable in different cities and counties so you can calculate your sales tax rate 
Certificate of exemption
Consumption tax 
Direct tax
Effective tax rate
Fair tax
Goods and services tax
Gross margins
Gross receipt tax
Mobile vendors
Point of purchase 
Resale certificate
Retail license
Sale markup
Sales tax license
Sales tax returns 
Single special event license
Turnover tax 
Value added tax 
Wholesale license
Author
Proportional tax vs regressive tax 
Tax systems
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
Author

Editorial Staffhttps://lawyer.zone
Hello Nation! I'm a lawyer and passionate about law. I've practiced law in a boutique law firm, worked in a multi-national organization and as in-house counsel. I've been around the block! On this blog, I provide you with golden nuggets of information about lawyers, attorneys, the law and legal theories. Enjoy!

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