Colorado: Sales Tax Handbook
Colorado Sales Tax Rate
|State Sales Tax||Local Sales Tax Range||Average Local Tax||Average Combined Tax||Max Combined Tax|
|2.90%||0.00% - 8.00%||3.097%||5.997%||10.9%|
2016 Colorado Sales Tax Handbook
Colorado Table of Contents
- List of Local Sales Tax Rates
- Sales Tax Calculator
- Sales Tax Exemption Certificates
- Sales Tax Info For Businessowners
- Taxable vs. Non-Taxable Purchases
- Sales Tax on Cars & Vehicles
- More Information
Colorado's Sales Tax By The Numbers:
Colorado has a lower-than-average sales tax, including when local sales taxes from Colorado's 180 local tax jurisdictions are taken into account.
Rankings by Average State + Local Sales Tax:
Ranked 34th highest by combined state + local sales tax
Ranked 18th highest by per capita revenue from state + local sales taxes ($1,054 per capita)
Rankings by State Sales Tax Only:
Ranked 20th highest by state sales tax rate
Ranked 45th highest by per capita revenue from the statewide sales tax ($446 per capita)
Printable PDF Colorado Sales Tax Datasheet
Colorado has a statewide sales tax rate of 2.90%, which has been in place since 1935.
Municipal governments in Colorado are also allowed to collect a local-option sales tax that ranges from 0.00% to 8.00% across the state, with an average local tax of 3.097% (for a total of 5.997% when combined with the state sales tax). The maximum local tax rate allowed by Colorado law is 8.00%. You can lookup Colorado city and county sales tax rates here.
This page provides an overview of the sales tax rates and laws in Colorado. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Colorado Sales Tax Handbook's Table of Contents above.
What is exempt from sales taxes in Colorado?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Colorado taxes five types of commonly-exempted goods:
For more details on what types of goods are specifically exempt from the Colorado sales tax see Colorado sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Colorado? Taxation of vehicle purchases in particular are discussed in the page about Colorado's sales tax on cars.
Are services subject to sales tax in Colorado?
"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Colorado, specified services are taxable.
About the Colorado Sales Tax
Colorado is a "home rule" state, which means that local governments like counties and cities have expanded powers when it comes to setting local sales tax rules. As a result, Colorado has relatively complicated sales tax laws that vary significantly depending on which jurisdiction you are in.
The Colorado Department of Revenue collects local sales taxes on behalf of a number of cities and counties. However, many cities in Colorado are known as "home rule" cities, which set and collect their own local sales taxes (see Colorado Form DR1002).
Sales and use taxes are the primary revenue sources for Colorado municipalities, and while none currently have a tax rate higher than 8% there is no limit set by the state government. State law allows municipalities to collect a sales or use tax if approved by their residents at an election. Most municipalities that collect a sales tax also collect a corresponding use tax. Due to the wide variety of local rates and regulations, direct contact with these home rule cities is suggested to receive up-to-date information concerning their tax rates, exemptions, license fees and procedures.
In addition to cities and counties, other local government organizations (specifically school districts, transportation districts, and special purpose districts) may also collect local sales taxes. Certain purchases, including rental cars and lodging rentals, are also subject to special sales taxes as high as 11.25% in some localities.
Is the Colorado Sales Tax Destination-Based or Origin-Based?
Colorado is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Colorado from a Colorado vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.
Is Colorado a Streamlined Sales Tax State?
Colorado is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.
Contact the Colorado Department of Revenue
The Colorado Sales Tax is administered by the Colorado Department of Revenue. You can learn more by visiting the sales tax information website at www.colorado.gov.
Phone numbers for the Sales Tax division of the Department of Revenue are as follows:
- Local Phone: (303) 238-7378
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your Colorado sales taxes, we recommend the following books:
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Colorado Sales Tax Rates by Zip Code:
Need an updated list of Colorado sales tax rates for your business? Download our Colorado sales tax database!