Total Range for 2025
| Base state sales tax rate | 2.90% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | 0%-8.3% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 2.9%-11.2% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | 20th of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in Colorado is 2.9%, but since the local rates range from 0-8.3% the total sales tax range is 2.9-11.2%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
Let’s say you run a clothing store in Denver, Colorado. A customer purchases a jacket for $50.00.
- Denver has a combined sales tax rate of 8.81% (2.9% state + 5.91% local).
- Sales tax = Item price x Sales tax rate = $50.00 x 8.81% = $4.40
- Total item price = $50.00 (item price) + $4.40 (sales tax) = $54.40
Nexus: Why do you need to collect sales tax in Colorado?
If you’re selling goods and services in Colorado then sales tax might apply! To determine your obligation, you must understand “nexus,” which ties businesses to states for tax purposes.
Two types of nexus exist:
- Physical Nexus: Having a physical presence, like an office, warehouse, or employees in Colorado, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within Colorado exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
Services
In Colorado, unlike some other states, most services are not taxable. This means you generally won’t collect sales tax when selling services within the state. However, there are some key exceptions:
- Services directly related to the sale of tangible personal property
- Leasing tangible personal property
- Amusement, entertainment, and recreational services
- Certain professional services
Goods
- Most tangible personal property sold in Colorado is taxable.
- This applies to most physical items you can buy or sell, like furniture, appliances, and sporting goods.
Freight/Shipping
- Shipping charges: In Colorado, shipping and handling charges are generally taxable unless they are separately stated and the customer has the option to choose non-taxable shipping (e.g., picking up the item themselves).
- Freight costs: Freight costs associated with delivering tangible personal property are usually not taxable if they are separately stated on the invoice and the customer is not charged for basic delivery.
Clothing
- Clothing is subject to sales tax in Colorado
Electronics
- All electronics are taxable
SaaS
- SaaS is not considered taxable in Colorado because it is not delivered on a tangible medium.
Digital Products
- Digital products are generally taxable, but electronically delivered software is exempt.
Software
- Prewritten, canned software: This is generally considered tangible personal property and subject to sales tax at the time of purchase.
- Custom software: This can be treated as a service, which is typically not taxable. However, if the custom software is delivered on a tangible medium (like a CD or flash drive), there might be a sales tax implication.
How to register for sales tax in Colorado
In Colorado, registering for sales tax involves acquiring a retail sales tax license. Here’s a breakdown of the process:
Online Registration (Recommended):
This is the quickest and most convenient method:
- Visit the Colorado Department of Revenue (CDOR) website: https://www.colorado.gov/revenueonline/
- Click on “Sign Up” and follow the prompts to create an online account (if you don’t have one already).
- Navigate to the section for “Sales & Use Tax.”
- Locate the option for “Register for a Sales Tax License.”
- Provide the required information during the registration process.
Mail-in Registration:
If online registration isn’t feasible, you can use the mail-in method:
- Download the “Business Registration” form (Form CR 0100) from the CDOR website (https://www.colorado.gov/revenueonline/).
- Search for “Business Registration” or Form CR 0100.
- Complete the application form carefully and accurately.
- Mail the completed form with any required documentation (mentioned on the form) to the address provided by the CDOR.
How to collect sales tax in Colorado
Here’s how to collect sales tax in Colorado
- Get a Sales Tax License: Register online or by mail with the Colorado Department of Revenue (CDOR).
- Find Your Sales Tax Rate: Check the CDOR website or your local government for the combined state and local rate.
- Charge the Correct Rate: Apply the combined rate to the taxable sales price at checkout.
- Collect the Sales Tax: Show the sales tax amount on the receipt and collect it from the customer.
- Keep Good Records: Track your sales, tax collected, and any exemptions applied.
How to get a sales tax permit/license in Colorado?
To obtain a sales tax permit in Colorado, register online through the Colorado Business Express or MyBizColorado portal. You’ll need to provide your business details, including your business name, address, and Federal Employer Identification Number (FEIN) or Social Security Number (SSN). During the registration, apply for a sales tax license, which requires a small fee.
Once approved, you’ll receive your sales tax license, which must be displayed at your business location or if you’re only an ecommerce store then you need to keep the license accessible for business records..
When are Colorado’s sales tax returns due?
Colorado’s sales tax returns are due on the 20th day of the month following the reporting period. For instance, if your reporting period is for the month of February 2024, the sales tax return for that period would be due on March 20, 2024.
If the due date falls on a weekend or holiday, the return is considered due on the next business day.
Is anyone exempt from sales tax in Colorado?
In Colorado, there are no exemptions for people themselves, but there are exemptions for certain types of purchases. Here’s a breakdown of who typically qualifies for sales tax exemptions:
- Charitable organizations: Qualifying charitable organizations are exempt from sales tax on purchases made for their regular charitable functions. This does not apply to all their sales, however, there are exemptions for occasional sales, sales where part of the purchase price is a donation, and sales by certain school-related entities.
- Government agencies: Purchases by government agencies are generally exempt from sales tax.
- Specific goods and services: Colorado exempts the sale of certain goods and services from sales tax. These include:
- Food for home consumption
- Prescription drugs and medical devices
- Farm equipment
- Certain types of machinery
- Services (unless specifically taxed, like repairs)
- SaaS
Do I Have to Collect Sales Tax from Colorado Customers if I Sell on Amazon, Walmart, eBay, or Etsy?
No.
Colorado has a marketplace facilitator law. This means marketplaces like Etsy or Amazon should collect sales tax on behalf of third-party sellers on their platforms. A marketplace facilitator who doesn’t meet the $100,000 threshold doesn’t have to register, collect, and remit Colorado tax.
If you have sales tax nexus in Colorado, you need to collect sales tax on any non-marketplace sales in the state.
Lakewood
Aurora, Colorado
Fort Collins
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