A retailer is required to obtain a sales tax license and collect sales tax on any retail sale of tangible personal property or taxable service made in Colorado if the retailer is “doing business in Colorado,” as defined below. If the retailer’s average or estimated monthly state sales tax collection is less than $300, the retailer will be required to file returns and remit tax on a quarterly basis. Individuals and businesses with specific questions should consult their tax advisors. When it comes time to file sales tax in Colorado you must do three things: Calculate how much sales tax you owe File a sales tax return Make a payment See FYI Sales 10: Machinery and Machine Tools Used in Manufacturing for information regarding the sales and use tax exemptions. Anyone making retail sales at one or more special sales events must obtain a special event license, unless the event organizer has obtained a license to file returns and remit tax on behalf of sellers participating in the event. If the 20th falls on a Saturday, Sunday, or legal holiday, the return and tax remittance is due the next business day. funds and not from the funds of any other party, If the purchaser is claiming exemption as a retailer, wholesaler, or tax-exempt organization, or as a contractor purchasing building materials for a tax-exempt construction project, the retailer must verify that the purchaser’s sales tax license or exemption certificate is current and valid at the time of the sale and can do so online at, Retailers bear the burden of proof for the proper exemption of any sale upon which the retailer did not collect sales tax. Additional information regarding exemptions can be found at the end of this, Colorado has specific rules regarding the taxability of computer software. Retailers will not be liable for the collection of sales taxes from a qualified purchaser if both of the following conditions are met: Direct pay permits issued by the Department have the words “Direct Pay Permit” in the upper left corner. The retailer must collect the tax if the retailer has reason to doubt that a purchase is: In the case of a sale to a tax-exempt organization or governmental entity, the retailer must also verify that the purchase is made directly from the funds of the organization or entity claiming the exemption. However, the Department does not administer and collect sales taxes imposed by certain home-rule cities, which instead administer their own sales taxes. Any such adjustment will be made effective January 1. See Department publication, A temporary exception from destination sourcing is allowed for retailers whose retail sales fall below the small retailer threshold described below. The following is a list of statutes, regulations, forms, and guidance relevant in evaluating a retailer’s obligation to collect Colorado sales tax. While retailers will not collect tax on exempt sales, they must maintain appropriate records and report exempt sales on the applicable lines of the Colorado Retail Sales Tax Return (DR 0100) and associated Schedule A and Schedule B. Retailers must file sales tax returns reporting all sales made, whether taxable or exempt, at regular intervals in accordance with prescribed filing schedules. State-administered local sales taxes are reported and remitted on the same form and at the same time as state sales taxes. Denver Ordinance, Rules, and Tax Guide information. Wholesale licenses expire on December 31st of odd-numbered years (e.g. Charge the tax rate of the buyer’s address, as that’s the destination of your product or service. Because the retailer is reimbursed by the manufacturer for the amount of the reduction, sales tax applies to the full selling price before the deduction for the manufacturer's coupon. All sums of money paid by the purchaser to the retailer as sales taxes are and remain public money and the property of the State of Colorado, or the appropriate local jurisdiction, in the hands of such retailer. Applicants for a wholesale license must pay a fee $16, prorated depending on the date of issuance. If the seller relies on a physical copy of the license or certificate for verification, the seller must retain a copy of the document for their records. If the property or service is delivered to the purchaser at a location other than seller’s business location, the sale is sourced to the location the purchaser receives the purchased property or first uses the purchased service. See Part 1: Retail Sales for guidance in determining the location of a sale. See, In general, the local sales taxes administered by the Department apply to the same sales of tangible personal property and selected services as the state sales tax. Every sale that is not a wholesale sale is a retail sale. A retailer may be doing business in Colorado even if that retailer maintains no physical location in the state, but not if the retailer meets the small retailer exception described below. Tax rate information for state-administered local sales taxes is available online at, The taxability of maintenance agreements and warranties sold along with tangible personal property is generally determined under the same rules as other associated service charges. The retailer must disclose the sales tax as a separate and distinct item. The retailer must include with their return the sales tax due for any tangible personal property, other than inventory, transferred to the purchaser as part of the sale of the business. Any sale made in Colorado may also be subject to state-administered local sales taxes. The tax rates in the city differ. See Part 4: Retailers Who Must Collect and Part 8: Local Sales Tax for additional information regarding state and local sales tax collection requirements. Alternately, a retailer may inspect a physical copy of the purchaser’s license or certificate, issued by the Department or the comparable tax administration agency of another state, to verify that it is current and valid and retain a copy for their records. They must collect and remit all state and state-administered local sales taxes applicable to the point of sale for each taxable transaction. State-administered local jurisdictions may also allow retailers to retain a service fee from the collected local taxes, although service fee percentages vary by jurisdiction. The purchaser may request a refund from the Department of the tax paid using the applicable Department form. If the purchaser requests delivery of the property or service to another person, as a bona fide gift from the purchaser, the sale is sourced to the location that person takes possession of the purchased property or first uses the purchased service. Under certain circumstances, motor vehicles and building materials are subject to local use taxes, rather than sales taxes. Forms, filing instructions, and electronic filing options are available online at, Regardless of the retailer’s filing frequency (monthly, quarterly, or annually), the retailer must file its sales tax return and remit all applicable tax by the 20, If the retailer is delinquent in remitting the tax due, the retailer is not allowed to deduct and retain any service fee. State-administered local jurisdictions may also allow retailers to retain a service fee from the collected local taxes, although service fee percentages vary by jurisdiction. 18. In general, the local sales taxes administered by the Department apply to the same sales of tangible personal property and selected services as the state sales tax. If a retailer neglects or refuses to file a return, the Department may estimate the tax due, based upon the information that may be available. The Department will, on an annual basis, calculate the retailer’s average monthly sales tax collection and adjust the retailer’s filing schedule to increase the retailer’s required filing frequency if necessary. See the Colorado Sales Tax Guide for additional information. A retail sale is considered to be, The sourcing rules described in this section apply to both state and state-administered local sales taxes. Generally, a retail sale is sourced to the location where the purchaser takes possession of the purchased property (“destination sourcing”). See Department publication, A retailer is required to obtain a sales tax license and collect sales tax on any retail sale of tangible personal property or taxable service made in Colorado if the retailer is “doing business in Colorado,” as defined below. On November 15th of the current year, the retailer’s cumulative retail sales in Colorado for the current year exceed $100,000. Such a place of business may include an office, distribution facility, salesroom, warehouse, storage place, or home office of a Colorado resident employee. If a retailer ceases to maintain any place of business in Colorado, the retailer may no longer be doing business in Colorado, depending on its other activities within Colorado, as described below in Retailers with no physical location in Colorado. If the retailer is delinquent in remitting the tax due, the retailer is not allowed to deduct and retain any service fee. ... 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