The sales tax in Centennial, Colorado is 6.75% on most retail purchases, with 2.5% of that going to the city itself.1City of Centennial. Sales Tax Rates Centennial is a home-rule city, which means it collects and audits its own 2.5% directly rather than routing everything through the state.2City of Centennial. Home Rule That matters, because the city’s rules on what gets taxed, how you register, and what happens when you file late are not identical to Colorado’s.
How the 6.75% Breaks Down
The combined rate is the sum of five separate taxing authorities:3Arapahoe County. 2025 Combined Sales Tax Rates For Arapahoe County
- Colorado state sales tax: 2.90%
- City of Centennial: 2.50%
- Regional Transportation District (RTD): 1.00%
- Arapahoe County open space tax: 0.25%
- Scientific and Cultural Facilities District (SCFD): 0.10%
Some addresses inside Centennial sit within specialized taxing zones or carry additional public improvement fees that push the effective rate above 6.75%. If you are unsure about a specific location, verify the address through the state’s geographic lookup before setting up your point of sale.
What Centennial Taxes
The city’s 2.5% applies to retail sales of tangible personal property and certain services under Article 1 of Chapter 4 of the Municipal Code.4City of Centennial. City of Centennial Ordinance No. 2021-O-02 That covers everyday goods like clothing, electronics, furniture, and building materials. Telecommunications, gas, electricity, and other utility services typically fall inside the taxable category as well. Short-term lodging is taxable at both the state and local level.5Colorado Department of Revenue – Taxation. Sales and Use Tax Topics: Rooms and Accommodations Professional services like legal or accounting work generally stay exempt, though a physical product delivered as part of the service can trigger tax.
Because Centennial is home-rule, its definition of a taxable transaction can differ from the state’s. An item exempt under Colorado law may still be subject to the local 2.5%. This shows up most sharply with software-as-a-service and digital downloads: Colorado does not impose a uniform statewide tax on those products, but home-rule cities can tax them independently. If you sell digital goods or cloud software to Centennial customers, check the city’s current guidance rather than assuming the state-level treatment carries over.
Common Exemptions
The exemption most businesses actually use is resale. If you buy inventory to resell to end consumers, you can present a resale exemption certificate to your vendor instead of paying tax at purchase. The certificate applies strictly to resale inventory, not to items your business consumes itself like office supplies or equipment. Both buyer and seller should keep copies in case of an audit.
Other exemption categories that commonly apply across Colorado home-rule cities include sales to governmental entities, prescription medications, and certain agricultural products, but each home-rule city defines its exemptions on its own terms. Centennial publishes vendor-facing resources on its Tax Information and Guides page.6City of Centennial. Tax Information and Guides When an exemption is not clearly documented, contact the city’s Sales Tax Division before applying it.
Registering Your Business
Any business operating in Centennial has to register with the city before making sales. A business that makes retail sales needs a Retail Sales Tax License; a business with a physical presence but no retail sales needs a Business Registration instead. You do not need both. The Retail Sales Tax License doubles as a business registration.7City of Centennial. Sales Tax and Business Licensing
Licenses run biennially and expire on December 31 of the succeeding calendar year. You apply through the city’s online sales tax portal and will need your federal EIN (or SSN if you are a sole proprietor), the legal business name, any trade names, a physical address, a mailing address, and a description of your activities.8City of Centennial. Sales Tax and Licensing Operating without a valid license exposes the business to enforcement action from the city’s finance department.
Filing, Deadlines, and Penalties
Licensed businesses file returns and make payments through the city’s online portal. You enter gross sales, apply exemptions and deductions, and the system calculates what you owe. Payment can be made electronically, including by ACH.
Missing a deadline is expensive. A late return carries a penalty of 15% of the tax due or $15, whichever is greater, plus interest of 1.5% per month on the unpaid balance.9City of Centennial. City of Centennial Sales Tax Return The math compounds fast. A business owing $2,000 that files two months late faces a $300 penalty and $60 in interest, and the balance keeps growing at 1.5% every month until it is paid. Persistent noncompliance can lead to license revocation or legal action.
Businesses that collect tax across multiple Colorado jurisdictions can also file through the state’s Sales and Use Tax System (SUTS), a single portal covering participating state, county, municipal, and special district filings.10Colorado Department of Revenue – Taxation. Sales and Use Tax System (SUTS) Centennial participates in SUTS as a home-rule self-collecting jurisdiction.11Colorado Department of Revenue. SUTS Participating Jurisdictions If you sell into several Colorado cities, using SUTS instead of each city’s individual portal can save time.
Use Tax
Centennial’s code covers use tax alongside sales tax. Use tax applies when you buy something taxable and do not pay Centennial sales tax at the time of the transaction, usually because the seller is out of state and does not collect the local tax. The rate is the same 2.5%.
Businesses run into this more often than individuals do, because commercial orders from out-of-state vendors are routine. If you buy equipment, supplies, or raw materials from a seller that does not collect Centennial tax, you are responsible for self-reporting and remitting on your return. Skipping this is one of the easiest ways to generate a deficiency during an audit.
Remote Sellers and Marketplace Sales
Out-of-state sellers picked up Colorado collection obligations once they cross the state’s economic nexus threshold. A remote retailer must get a Colorado sales tax license and start collecting once its sales into the state exceed $100,000 in the current or previous calendar year, with collection beginning on the first day of the first month that starts at least 90 days after the threshold is crossed.12Colorado Department of Revenue. Out-of-State Businesses Because Centennial self-collects, remote sellers delivering into the city should confirm whether they also need to register directly with Centennial. Hitting the state threshold does not automatically satisfy the local requirement.
Since October 2019, Colorado has required marketplace facilitators like Amazon and Etsy to collect and remit sales tax on behalf of third-party sellers for sales made through the platform. If you sell through a marketplace, the platform handles collection on those transactions. You still collect and remit Centennial’s 2.5% on any direct sales you make outside the marketplace, whether through your own website or a physical location. Keep records of marketplace-facilitated sales anyway; if the platform makes an error, the underlying tax liability does not disappear.