Colorado sales tax starts at a 2.9% state rate, one of the lowest base rates in the country, but what you actually pay at the register is almost always higher once county, city, and special district taxes stack on top. Combined rates run from under 3% in some unincorporated rural areas to over 11% in certain city centers. Colorado uses destination-based sourcing, so the rate is set by where the buyer receives the product, not where the seller is located.1Colorado Department of Revenue – Taxation. Colorado Sales Tax Guide
How the Rate on Your Receipt Is Built
Every taxable sale starts with the 2.9% state rate set by C.R.S. § 39-26-106.2Justia Law. Colorado Code 39-26-106 – Schedule of Sales Tax3Justia Law. Colorado Code 29-2-102 – Municipal Sales or Use Tax – Referendum – Repeal4Colorado Department of Revenue. Colorado Sales/Use Tax Rates DR 10025SCFD. About Us
In Denver, the combined rate on most purchases is 8.00%: 2.90% state, 4.00% Denver, 1.00% RTD, and 0.10% SCFD. Rural areas without municipal taxes can land under 5%. Because the applicable rate depends on the specific delivery address, address-based tax calculators have become essential for anyone selling across jurisdictions.
State-Collected vs. Home-Rule Cities
Some local taxes are collected by the Colorado Department of Revenue alongside the state tax. The department calls these “state-collected” jurisdictions, and their rules mirror the state’s. Every Colorado county that imposes a sales tax is state-collected except Denver County and Broomfield County.6Colorado Department of Revenue – Taxation. Local Government Sales Tax
Home-rule cities are a different animal. They’ve adopted charters that let them define their own tax base, set their own exemptions, and collect their taxes independently. A business selling into a home-rule city may need a separate city license, a separate return, and a different list of what’s taxable. Denver, Aurora, Boulder, and Colorado Springs are all home-rule self-collecting cities. The state’s Sales and Use Tax System (SUTS) has brought some home-rule jurisdictions onto one portal, but not all of them participate.
What’s Taxed and What’s Exempt
Colorado taxes most tangible personal property. The exemptions are listed in C.R.S. §§ 39-26-701 through 39-26-734.7Justia Law. Colorado Code Title 39 – Sales and Use Tax Exemptions A state exemption does not guarantee a local exemption; home-rule cities can set their own rules.
Groceries
Food bought for home consumption is exempt from the 2.9% state tax. That covers produce, meat, dairy, bread, and other staples eligible for purchase with food stamps or WIC vouchers. Candy and soft drinks stay taxable at the state level. The wrinkle: home-rule cities can choose whether to tax groceries locally, and many do.8Colorado Department of Revenue. FYI Sales 4 – Taxable and Tax Exempt Sales of Food and Related Items Your receipt in a home-rule city may still show local tax on groceries even though the state portion is zero.
Services
Services are generally not taxable in Colorado. The exceptions are narrow: commercial gas and electric, and telephone and telegraph services, including VoIP and mobile telecommunications. Plumbers, accountants, lawyers, landscapers, and consultants don’t collect sales tax on labor.9Colorado Department of Revenue – Taxation. Sales Tax Guide They do pay sales tax on the tangible materials they buy to do that work.
Other Exemptions
Prescription drugs and certain prosthetic medical devices are exempt at the state level, along with agricultural equipment, manufacturing machinery, and residential gas and electric service. For a specific product in a specific city, check with that jurisdiction directly.
The Retail Delivery Fee
Any delivery by motor vehicle to a Colorado address that includes at least one taxable item triggers a flat retail delivery fee under C.R.S. § 43-4-218. It’s a per-order flat charge, not a percentage, and whoever collects the sales tax (the retailer or marketplace facilitator) is responsible for collecting and remitting it.10Colorado Department of Revenue – Taxation. Retail Delivery Fee The fee adjusts annually for inflation, so check the Department of Revenue’s retail delivery fee page each year for the current amount. It’s reported on the same return as sales tax but tracked as a separate line.
If You Weren’t Charged Tax: Consumer Use Tax
Buy something from an out-of-state retailer that doesn’t collect Colorado sales tax, or from a private seller, and you owe consumer use tax at the same rate that would have applied if you’d bought it locally. This comes up most often with online purchases from small sellers under the nexus threshold, or items bought while traveling.
You can report consumer use tax three ways: online through Revenue Online, on a separate Consumer Use Tax Return (Form DR 0252), or on the Consumer Use Tax Reporting Schedule (DR 0104US) filed with your state income tax return. Using the income tax return route puts the use tax on the income tax filing deadline. One limit worth knowing: the Department of Revenue does not collect city or county use tax for self-collecting home-rule jurisdictions. Those you pay directly to the city.11Colorado Department of Revenue. Consumer Use Tax Filing Information
Rules for Remote Sellers and Marketplaces
Out-of-state businesses must collect Colorado state sales tax once their Colorado retail sales exceed $100,000 in the current or previous calendar year. There’s no transaction-count threshold; it’s purely revenue-based. A retailer that crosses the $100,000 line mid-year has 90 days to get licensed and begin collecting.12Colorado Department of Revenue – Taxation. Out-of-State Businesses
Marketplace facilitators like Amazon, Etsy, and eBay have their own obligation. A facilitator must collect and remit all applicable state and state-administered local sales taxes for sales made through its platform on behalf of third-party sellers, taking on the same rights and obligations as a retailer for those sales.13Colorado Department of Revenue – Taxation. Marketplace Facilitators If you sell both through a marketplace and through your own site, the marketplace handles its portion, but you’re still on the hook for your direct sales.
Getting a Sales Tax License
Any business making retail sales in Colorado needs a sales tax license before collecting. Apply using Form CR 0100 through the Department of Revenue.14Colorado Department of Revenue – Taxation. CR 0100 – Colorado Sales Tax and Withholding Account Application You’ll need your Federal Employer Identification Number (or Social Security Number for a sole proprietor), business name, physical location, and mailing address.
In 2026, the license fee is $16 if you apply between January and June, or $12 if you apply between July and December. New accounts also owe a $50 deposit submitted with the application. That deposit refunds automatically once you’ve collected and remitted $50 in state sales tax. A new single-location business applying in the first half of 2026 pays $66 upfront.15Colorado Department of Revenue – Taxation. Standard Retail License Home-rule cities may require a separate local license on top of that.
Filing Frequencies and Deadlines
The Department of Revenue assigns your filing frequency based on how much tax you collect each month:
- Monthly filing is required if you collect $600 or more per month. Returns are due the 20th of the following month.
- Quarterly filing is allowed if you collect under $600 per month. Returns are due the 20th of the month after each quarter ends (April 20, July 20, October 20, January 20).
- Annual filing is allowed if you collect $15 or less per month. The annual return is due January 20.
Returns can be filed through SUTS, which covers state, state-collected local, and participating home-rule jurisdictions in one portal.16Colorado Department of Revenue – Taxation. Sales and Use Tax System (SUTS) For home-rule cities that don’t participate, you file directly with each one.17Colorado Department of Revenue – Taxation. Sales Tax Filing Information
The State Service Fee Is Gone in 2026
Before 2026, retailers could keep a small percentage of the state sales tax they collected as a “vendor fee” to offset the cost of acting as an unpaid tax collector. Starting January 1, 2026, the state service fee is eliminated. Retailers can no longer retain any portion of state sales tax collected. Some local jurisdictions may still allow a local service fee, but the state-level offset is gone.18Colorado Department of Revenue – Taxation. Service Fee If you’d been budgeting around that cushion, factor it out.
Penalties and Interest if You File Late
Missing a sales tax deadline triggers both a penalty and interest. The penalty for failure to file or pay is the greater of $15 or 10% of the unpaid tax plus an additional 0.5% for each month the balance remains outstanding, capped at 18% total. Late payment also disqualifies you from any applicable local service fee retention.19Colorado Department of Revenue – Taxation. Tax Topics – Penalties and Interest
Interest runs on top. For 2026, the discounted interest rate is 8% annually, available if you pay before receiving a notice of deficiency or within 30 days after one is issued. Miss that window and the regular rate of 11% applies. If you realize you made an error on a past return, filing an amended return before the department contacts you is the cleanest way to limit what you owe.