Colorado Sales Tax Guide 2025: Policies, Taxes, Compliance

Explore Colorado's sales tax laws with this detailed guide, including information on rates, exemptions, and filing requirements. Stay compliant and simplify your tax processes with this resource.

Sales Tax in Colorado

Sales tax in Colorado began in 1935, establishing a 2.9% base rate to support state revenue. Governed by Colorado sales tax law, the tax applies to goods and certain services, with additional local rates. The Colorado Department of Revenue oversees the Colorado sales and use tax, ensuring compliance across jurisdictions.

Colorado Sales Tax Rate

Jurisdiction	Sales tax rate
State tax	2.9%
Local tax	0% to 8.3%
Combined tax	2.9%–11.2%

Learn more and check out the city-based tax rates in Colorado.

Colorado Sales Tax Calculator

Colorado uses a destination-based sales tax system, meaning the sales tax rate is determined by the location where the buyer takes possession of the goods or services. Retailers must calculate the sales tax by combining the 2.9% state tax with applicable local and special district taxes, which vary depending on the buyer's location.

Example 1:  A retailer in Denver sells a product for $100 to a customer within the city. Here’s how to calculate the sales tax rate:

State Tax Rate: 2.9%

Denver City Tax Rate: 4.81%

Special District Rate (RTD & CD): 1.1%

Total Sales Tax Rate: 8.81% Sales Tax Calculation: $100 × 8.81% = $8.81 Total Price: $100 + $8.81 = $108.81

Example 2: A merchant in Colorado sells a $200 item to a customer in Boulder, where the local tax rate is different.

State Tax Rate: 2.9%

Boulder City Tax Rate: 3.86%

Special District Rate: 0.985%

Total Sales Tax Rate: 7.745% Sales Tax Calculation: $200 × 7.745% = $15.49 Total Price: $200 + $15.49 = $215.49

FAQs on Sales Tax

What is the sales tax rate in Colorado 2024?

The state sales tax rate in Colorado for 2024 remains 2.9%, with additional local taxes depending on the jurisdiction.

What is the current sales tax rate in Denver, Colorado?

The total sales tax rate in Denver, Colorado, is 8.81%, including state, city, and special district taxes.

What is the sales tax rate in Denver, Colorado?

Denver’s combined sales tax rate is 8.81%, which includes 2.9% state tax, 4.81% city tax, and 1.1% for special districts (RTD & CD).

How do I calculate Colorado sales tax?

Multiply the item price by the combined sales tax rate (state + local rates) for the buyer’s location. For example, $100 × 8.81% = $8.81 tax.

How to calculate the sales tax for Colorado revenue report?

Determine the total taxable sales and apply the combined sales tax rate for each location to calculate the taxes collected, then report the totals to the Colorado Department of Revenue.

How to calculate Colorado state sales tax?

Multiply the taxable amount by the 2.9% state tax rate to calculate the Colorado state sales tax. For example, $100 × 2.9% = $2.90 tax.

Sales Tax Nexus in Colorado

Type of Nexus	Threshold
Physical Nexus	Any physical presence
Economic Nexus	$100,000 in annual sales

FAQs on Sales Tax Nexus

What constitutes sales tax nexus in Colorado?

Sales tax nexus in Colorado is established if a business has a physical presence (e.g., a store, warehouse, or employees) or meets economic nexus thresholds, such as $100,000 in gross sales to Colorado customers annually.

What are the Nexus rules for sales tax in Colorado?

Businesses with either a physical presence or economic nexus in Colorado must register with the Colorado Department of Revenue to collect and remit sales tax. Economic nexus applies to remote sellers exceeding $100,000 in annual sales.

Colorado Sales Tax Exemptions​

Colorado offers sales tax exemptions to support businesses and reduce tax burdens on specific goods and services, as outlined by state tax legislation. Common exemptions include goods for resale, manufacturing equipment, and agricultural products.

Some counties, like Mesa County, may have unique rules or additional exemptions that differ from state-level regulations. Understanding and utilizing these exemptions can help businesses comply with Colorado sales tax laws while lowering operating costs.

How to obtain a Colorado sales tax exemption certificate?

Businesses can apply for a Colorado sales tax exemption certificate through the Colorado Department of Revenue by submitting the necessary forms and supporting documentation to prove eligibility.

What items qualify for Colorado sales tax exemption?

Items such as goods for resale, manufacturing machinery, agricultural supplies, and certain medical devices qualify for sales tax exemptions in Colorado. Learn more about Colorado sales tax exemption rules.

Is SaaS taxable in Colorado?

Yes, SaaS (Software as a Service) is generally taxable in Colorado as it is considered a taxable digital product under state tax laws.

Is there sales tax on clothes in Colorado?

Yes, clothing is subject to sales tax in Colorado, including the state’s 2.9% base rate and any applicable local taxes. Learn more about Colorado clothing sales tax.

FAQs on Sales Tax Exemptions

What services are exempt from sales tax in Colorado?

Services like healthcare, legal services, and professional consulting are generally exempt from sales tax in Colorado, as they are not classified as taxable tangible personal property or digital goods.

How to fill out Colorado sales tax exemption certificate?

Complete the required Colorado sales tax exemption certificate form by providing your business details, tax ID, and the reason for exemption, then submit it to the seller to claim the exemption.

What items are exempt from sales tax in Colorado?

Common exempt items include goods for resale, manufacturing machinery, agricultural supplies, and certain medical devices, as outlined in Colorado’s tax laws.

What is sales tax exempt in Colorado?

Items like unprepared food, prescription drugs, and goods purchased for resale are sales tax exempt in Colorado, along with some industry-specific exemptions.

How do I verify sales tax exemption in Colorado?

Verify sales tax exemptions by ensuring the buyer provides a valid exemption certificate that complies with Colorado’s regulations and retains it for your records.

Does Colorado charge sales tax on SaaS?

Yes, SaaS (Software as a Service) is taxable in Colorado, as it is considered a form of taxable digital product under the state’s sales tax laws.

Does Colorado charge sales tax on clothing?

Yes, Colorado charges sales tax on clothing, including the 2.9% state tax and any applicable local taxes, as clothing is generally considered taxable.

Colorado Sales Tax Filing

Filing sales tax in Colorado requires businesses to submit returns based on their assigned filing frequency—monthly, quarterly, or annually—determined by their tax liability. The process is relatively straightforward, with filings completed online through the Colorado Department of Revenue’s Revenue Online portal.

Late filings result in penalties of 10% of the tax due plus interest, emphasizing the importance of timely compliance. Keeping accurate records and understanding filing deadlines can help businesses streamline their tax obligations and avoid costly penalties.

What are the Colorado sales filing requirements?

Businesses must file sales tax returns through the Revenue Online portal based on their assigned frequency (monthly, quarterly, or annually), reporting all taxable and exempt sales. Timely remittance of collected taxes is required to avoid penalties.

When is Colorado special event sales tax filing due?

Special event sales tax returns are typically due 20 days after the event concludes, unless otherwise specified by the Colorado Department of Revenue.

When are quarterly sales tax filings due in Colorado?

Quarterly sales tax filings in Colorado are due on the 20th day of the month following the end of the quarter (e.g., April 20, July 20, October 20, and January 20).

What is the penalty for filing Colorado sales tax late?

Colorado imposes a 10% penalty on the tax due, plus interest, for late filings or payments.

How often does Colorado sales tax filing period?

Sales tax filing in Colorado is determined by the business's tax liability and may be required monthly, quarterly, or annually.

Colorado Sales Tax Due Date​

Filing Frequency	Due Date
Monthly	Every 20th of the following month (Ex. Due date for January is February 20)
Quarterly	Every 20th of the month following the quarter’s end. (Ex. Due date for Q1 (January 1 – March 31) is April 20)
Annually	January 20 of the following year.

When is the Colorado sales tax license renewal due date?

Colorado sales tax licenses must be renewed every two years, with the renewal due on December 31 of odd-numbered years.

What are the quarterly due dates for Colorado sales tax?

Quarterly sales tax filings in Colorado are due on the 20th of the month following the end of each quarter: April 20, July 20, October 20, and January 20.

What day is Colorado sales tax due?

Colorado sales tax returns are generally due on the 20th of the month following the reporting period, whether monthly, quarterly, or annually.

Colorado Sales Tax Revenue Service

For any concerns about Colorado sales tax registration, filing or general inquiries, you can reach out to them through the following:

• Helpline: (303) 238-7378
• Email: https://tax.colorado.gov/contact-us-by-email
• US Postal Service: Colorado Department of Revenue Section or Employee Name and Room Number P.O. Box 17087 Denver, CO 80217-0087
• Express Mail Delivery: Colorado Department of Revenue Section or Employee Name and Room Number 1881 Pierce St. Entrance B Lakewood, CO 80214
• Service hours: Monday through Friday, 8:00 a.m. to 4:30 p.m. MT (except holidays) 

We’ve covered Colorado sales tax from start to finish. Ready to simplify your compliance? Try Kintsugi—sign up or book a demo.