The Boulder County mental health tax is a 0.15% sales and use tax dedicated entirely to mental and behavioral health services. Voters approved it as Ballot Issue 1B in November 2025, and it took effect on January 1, 2026, adding about 15 cents to every $100 of taxable purchases in the county.1Boulder County. Sales and Use Tax It’s projected to raise roughly $13.8 million in its first year and runs for three years unless voters renew it.
What You Pay at the Register
The rate is 0.15%, or 15 cents on a $100 purchase. It applies to the same transactions subject to Colorado’s state sales tax, meaning retail purchases of tangible goods and certain services, and shows up as a line item alongside existing state and local taxes at checkout.1Boulder County. Sales and Use Tax
With this tax added, Boulder County’s total county-level sales tax rate is 1.335% as of January 1, 2026. That county rate sits on top of the 2.9% Colorado state rate and any municipal taxes where you shop, so the combined rate at the register varies by city. The county portion stays at 1.335% everywhere within the county’s borders.2City of Boulder. Tax Rates and Types
Use tax applies as well. If you buy something from an out-of-state seller that doesn’t collect Boulder County tax, or you purchase goods for business use without paying sales tax, you owe the 0.15% on those transactions. The use tax prevents the sales tax from being avoided by shopping outside the county or through non-collecting online retailers.
What’s Exempt
Colorado exempts both grocery food (items for home consumption) and prescription drugs at the state level, and counties may extend the grocery exemption to local sales taxes using the same definition the state uses, which ties eligibility to items that can be purchased with food stamps or WIC vouchers.3Colorado Department of Revenue. FYI Sales 4 – Taxable and Tax Exempt Sales of Food and Related Items Prescription medications are separately exempt under state regulation.
Under Colorado law, exemptions in the state’s sales tax code automatically apply to county sales taxes unless the county expressly declines them when adopting or amending the tax.4Justia Law. Colorado Code Title 29 – Section 29-2-105 Other state-level exemptions that may carry through include sales of farm equipment, machinery used in manufacturing, and certain medical devices. If you aren’t sure whether a specific item is taxable, the Colorado Department of Revenue’s address-based lookup tool shows the applicable rate and taxable categories for any location in the county.
What the Money Pays For
All revenue is restricted to behavioral health purposes rather than going into the general fund, as required by the ballot measure.5Boulder County. Resolution 2025-038 Mental and Behavioral Health Tax Proposal The county’s recommended spending plan divides the money into five categories:6Boulder County. Community Services Department Mental and Behavioral Health Tax Proposal
- Treatment services (40%): providers treating mental health and substance use conditions, with emphasis on underserved groups including people experiencing homelessness.
- Recovery supports (25%): partial hospitalization, sober-living facilities, intensive outpatient programs, peer support, and other step-down residential options.
- Crisis response and intervention (20%): mobile crisis teams, walk-in centers, and on-site stabilization for people in a mental health crisis or substance withdrawal.
- Prevention services (10%): school-based and nonprofit programs for youth exposed to adverse experiences, mental illness risk factors, or suicide risk.
- Navigation services (5%): connecting people to the right level of care so they don’t fall through gaps between providers.
The county commissioners set the exact dollar amounts in each category each budget cycle, so allocations can shift as needs change over the three years.
When It Expires
The tax is authorized for exactly three years: January 1, 2026 through December 31, 2028.1Boulder County. Sales and Use Tax After that date, it expires automatically unless voters approve a renewal. The commissioners can adjust allocations across the five spending categories during the three years, but they cannot extend the tax without a vote.5Boulder County. Resolution 2025-038 Mental and Behavioral Health Tax Proposal
For Businesses Collecting the Tax
Every retailer operating within Boulder County collects the 0.15% at the point of sale and remits it to the state. The Colorado Department of Revenue handles intake through Revenue Online and then distributes the mental health portion back to the county.7Colorado Department of Revenue. File Sales Tax on Revenue Online
Because county borders don’t always align with city limits, retailers should verify their tax jurisdiction using the Department of Revenue’s Geographic Information System, which lists every taxing authority applicable to a given address.8Colorado Department of Revenue. Geographic Information System Information Misidentifying the jurisdiction is a common audit trigger for small businesses.
Filing Frequency
How often you file depends on how much sales tax you collect per month:9Colorado Department of Revenue. Sales Tax Filing Information
- $600 or more per month: file monthly, due by the 20th of the following month.
- Under $600 per month: file quarterly, due April 20, July 20, October 20, and January 20.
- $15 or less per month: file annually, due January 20.
Businesses paying more than $75,000 per year in state sales tax must use Electronic Funds Transfer.9Colorado Department of Revenue. Sales Tax Filing Information
Records and Penalties
Retailers must keep books, invoices, exemption certificates, and related records for at least three years from the filing date or the due date, whichever is later.10Colorado Department of Revenue. Sales Tax Guide If a required return was never filed, there is effectively no time limit on when the state can review the period.
Late filings carry a penalty of 10% of the tax due plus 0.5% for each month unpaid, capped at a combined 18%, with interest accruing until the balance is paid. The minimum penalty is $15.11Colorado Department of Revenue. Penalties and Interest For a business that falls behind across multiple periods, those amounts add up quickly.