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Colorado sales tax notices

Got a letter from the Colorado Department of Revenue, Taxation Division (CDOR)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Colorado Department of Revenue, Taxation Division (CDOR) (opens in a new tab)

Official notice guide (opens in a new tab)

Disagree with a notice?

File a written protest (request for a formal hearing) with the Executive Director, online through Revenue Online or on paper, against a Notice of Deficiency or Rejection of Refund Claim. You may submit a written brief instead of attending a hearing. Protests are first reviewed by the section that issued the notice and then by the Tax Conferee Section. If no timely protest is filed, the Department must issue a final determination.

Deadline: 30 days from the mailing date of the Notice of Deficiency (not the date you receive it). The deadline is statutory and cannot be extended; if it falls on a weekend or legal holiday, it moves to the next business day.

Source: Colorado Department of Revenue, Taxation Division (CDOR) (opens in a new tab)

Failure to file

The authority has no return on record for a period it expects one, often because an account is open but filings stopped.

Failure to file

Sales Tax Non-Filer Notice

A notice saying the Department has not received one or more sales tax returns for an open sales tax account. If you do not act, the Department will estimate the tax and send a Notice of Deficiency.

Why you got it

  • A sales tax return was not filed for a period, including periods with no sales
  • The business closed but the sales tax account was never closed
  • A return was filed but the Department has no record of receiving it

What to do

  1. Check Revenue Online first. If it shows the return was received, you can disregard the notice
  2. If you filed more than 15 days before the notice date, send copies of the return and proof of payment (canceled check or EFT confirmation), or file a protest in Revenue Online with attachments
  3. Otherwise, file every missing return within 5 days of the letter date, even if the amount due is zero, so the Department does not estimate the tax and send a Notice of Deficiency
  4. If the business has stopped operating, close the account in Revenue Online or with Form DR 1102. Dissolving with the Secretary of State does not close the tax account

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 5 days from the date on the letter

Source: Sales Tax Non-Filer Notices | Department of Revenue - Taxation (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance due

Final Determination and Demand for Payment

A legally required letter saying a tax debt from an earlier Notice of Deficiency or Rejection of Refund Claim is still unpaid. If you do not pay in full or start a payment plan, the Department can take collection action.

Why you got it

  • A Notice of Deficiency was not paid or protested in time
  • A protest was decided and tax is still owed

What to do

  1. Check the Statement of Account. If you have a payment plan and any debt is not covered, call Collections at (303) 205-8291
  2. Pay the tax balance or set up a monthly payment plan; penalty and interest keep growing until the tax is paid
  3. If you had good cause for filing or paying late, ask the Taxpayer Helpline at (303) 238-7378 whether a penalty waiver can still be considered

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Did You Receive a Letter From Us? | Department of Revenue - Taxation (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Notice of Deficiency

A legally required bill showing adjustments the Department made to a return, or an estimated amount for a return that was not filed, with the balance owed for the period. It also explains how to protest, pay in full, or set up a payment plan.

Why you got it

  • Tax was not paid in full when the return was filed, or it was paid late and penalty and interest are owed
  • No return was filed, so the Department estimated the tax
  • The Department adjusted a filed return

What to do

  1. Compare the notice with your return to see what the Department changed, or whether it estimated tax for a return you never filed
  2. Pay the tax, or call a Compliance Agent at (303) 866-3711 to set up a business payment plan. Paying in full or agreeing to a payment plan within 30 days of the notice qualifies for the lower interest rate
  3. If you disagree with the tax, or had good cause for filing or paying late, file a written protest within 30 days of the mailing date asking for the changes or a penalty waiver. Sending documents alone does not preserve your protest rights
  4. If you already have a payment plan, check the Statement of Account to confirm the debt is included

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 30 days to notify the Department if you disagree (the protest deadline runs from the notice's mailing date)

Source: Collections | Department of Revenue - Taxation (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Notice of Intent to Issue Judgment/Lien

A courtesy letter giving one last chance to pay an unpaid tax debt before the Department files a judgment or lien. Once filed, the lien attaches to all of your assets and stops you from selling them until the debt is paid.

Why you got it

  • A tax debt is still unpaid after the Final Determination and Demand for Payment
  • No payment plan was set up

What to do

  1. Call the Collections Section at (303) 205-8291 within 10 days. The Department's page says not to mail your payment, so get payment instructions for certified funds (cashier's check or money order only)
  2. If you cannot pay in full, call a Compliance Agent at (303) 866-3711 about a business payment plan before the lien is filed

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 10 days from the date of the notice

Source: Collections | Department of Revenue - Taxation (opens in a new tab)

Ask for penalty relief

Penalties on a Colorado notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Penalty waiver for good cause

  1. File any missing returns and pay the tax, or set up a payment plan, so penalty and interest stop growing
  2. Ask for the waiver in writing through the protest process, in Revenue Online or on paper, explaining the good cause and attaching documents
  3. If you are responding to a Notice of Deficiency, file within 30 days of its mailing date; sending documents alone does not preserve protest rights

What qualifies: Good cause shown

Interest: State law lets the Executive Director waive, for good cause shown, any penalty or interest assessed on sales tax

Source: Colorado Revised Statutes 2024, Title 39 (C.R.S. 39-26-118(9)), Colorado General Assembly (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Colorado sales tax guide.

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