Denver Sales Tax: Rates, Exemptions, and Use Tax Rules

The Denver sales tax on most retail purchases is 9.15%, combining a 5.15% city rate with Colorado state and regional taxes.¹ Certain categories, including restaurant meals, hotel stays, car rentals, and recreational marijuana, carry higher rates, and a few essentials are exempt from the city’s share. Because Denver is a home-rule city, it collects its own sales tax directly rather than through the state, so businesses here need a separate Denver tax license on top of any Colorado state license.²

How the 9.15% Breaks Down

Four taxing bodies each add a layer to a Denver receipt:

Colorado state: 2.9%
Regional Transportation District (RTD): 1.0%, funding regional transit
Scientific and Cultural Facilities District (CD): 0.1%, funding arts and science organizations across the metro area
City and County of Denver: 5.15%, covering city services and voter-approved dedicated funds

The state rate applies statewide; the RTD and CD taxes cover the greater Denver metro area.³ Denver’s 5.15% city portion already folds in several voter-approved dedicated taxes, including a 0.25% climate tax approved in 2020, so you won’t see them as separate line items.⁴

Rates for Specific Purchases

Not everything is taxed at 9.15%. Denver applies different city rates depending on what you buy.

Restaurant Meals and Prepared Food

Food and drink served by restaurants, bars, cafeterias, catering companies, and similar businesses are taxed at a city rate of 4.00% instead of the standard 5.15%.⁵ With the 2.9% state, 1.0% RTD, and 0.1% CD on top, a restaurant check carries a combined 8.00% tax.⁶ Mandatory gratuities and service charges tied to taxable food sales are also subject to the 4.00% city rate.

Hotels and Short-Term Rentals

Stays of fewer than 30 consecutive days at a hotel, motel, or short-term rental are subject to Denver’s lodger’s tax of 10.75%, charged on top of a 4.81% general sales tax that applies to lodging.¹ That puts the city-level tax alone at roughly 15.56% before state and regional taxes are added. Short-term rental hosts are responsible for collecting lodger’s tax from guests.⁷

Recreational Marijuana

Retail marijuana carries one of the heaviest tax loads of anything sold in Denver. The city taxes it at a combined local rate of 10.65%, layering the general sales tax with a special marijuana sales tax. Add the state’s 15% marijuana tax plus the 1.0% RTD and 0.1% CD, and the combined rate on retail marijuana reaches 26.75%.⁶ Medical marijuana is taxed at the standard 5.15% city rate and isn’t subject to the special surcharge.

Short-Term Car Rentals

Renting a car in Denver for 30 days or fewer triggers a city tax of 7.25% along with the state and regional taxes, for a combined 11.25%.⁶ Colorado also charges a flat motor vehicle daily rental fee of $5.34 per day through June 2026, covering both a daily vehicle rental fee and a congestion impact fee.⁸ Rentals to the federal government for official use are exempt from that daily fee.

What’s Exempt

Groceries for home consumption are exempt from Denver’s city sales tax. The exemption follows the federal food stamp program definition, which covers staples like meat, produce, dairy, and bread sold in grocery form.⁵ The exemption applies only to the city portion. RTD and CD taxes still apply to food items that are otherwise subject to the state sales tax.⁹

Prescription drugs are exempt from Denver sales and use tax when purchased for a specific individual’s personal use under a licensed practitioner’s written order.¹⁰

Qualified 501(c)(3) charitable organizations and government agencies can make tax-exempt purchases for official use.¹¹ Vendors should keep a copy of the organization’s 501(c)(3) determination letter or exemption certificate on file in case of an audit.

Use Tax: When You Didn’t Pay Sales Tax at Purchase

If you buy something without paying Denver sales tax, you owe Denver use tax when you store, use, or consume that item in the city. The use tax rate matches the sales tax rate.¹ The common case is an online purchase from a vendor that doesn’t collect Denver tax, or equipment ordered from a supplier outside the city.

This applies to both businesses and individual residents. The state imposes its own 2.9% use tax through the Colorado Department of Revenue but does not collect Denver’s local use tax on your behalf.³ If you already paid sales or use tax to another jurisdiction on the same item, you can claim a credit against what you owe Denver.

If You’re Selling in Denver

Getting a Denver Tax License

Any business making taxable sales in Denver needs a Denver Retailer’s Sales, Use, and Lodger’s Tax License before collecting tax. The city doesn’t charge a fee for this license, and it renews on a biannual cycle, with the Treasury Division sending renewals each December.¹²

The application asks for your business’s legal name, Federal Employer Identification Number or Social Security Number, the physical address where you operate, and a description of what you sell.¹³ It’s submitted to the Denver Treasury Division. Report your actual business start date accurately; it determines when your tax obligation begins.

A Colorado state sales tax license only covers state and state-collected jurisdictions, not Denver.² Businesses located outside Denver that make taxable sales into the city need a Denver retailer’s use tax license if they have economic nexus here, which includes having employees in the city, soliciting orders locally, or meeting applicable sales thresholds.¹

Filing Deadlines and Penalties

Once licensed, you file and pay through the Denver eBiz Tax Center, the city’s online portal.¹⁴ Returns and payment are due by the 20th of the month following your taxable period.¹⁵ A monthly filer reporting January sales owes by February 20.

The city assigns your filing frequency based on how much tax you collect. Most businesses file monthly; lower-volume sellers may be placed on a quarterly or annual schedule.¹² Even with no taxable sales in a period, you still need to file a zero-dollar return. Skipping that triggers penalties.

Late filing carries a penalty based on tax due, and unpaid tax accrues interest at 1% per month from the due date until paid in full.¹

The Occupational Privilege Tax

Denver also imposes an occupational privilege tax on people who work in or conduct business within the city. If an employee earns more than $500 in a calendar month, both the employer and employee owe this tax. The employer pays $4.00 per month per qualifying employee, and $5.75 per month is withheld from the employee’s paycheck. The same Denver registration form covers both sales tax licensing and occupational privilege tax registration.¹³ It applies whether or not the business makes taxable sales, which catches some new Denver employers off guard.

1
City and County of Denver. Business Tax FAQ
2
Colorado Department of Revenue. How to Apply for a Colorado Sales Tax License
3
Colorado Department of Revenue. Consumer Use Tax Guide
4
Ballotpedia. Denver, Colorado, Ballot Measure 2A, Sales Tax to Fund Environmental and Climate-Related Programs
5
City and County of Denver. Food and Drink Tax Guide
6
City and County of Denver. Denver Combined Tax Rates
7
City and County of Denver. Short-Term Rentals Tax Guide
8
Colorado Department of Revenue. Motor Vehicle Daily Rental Fee
9
Colorado Department of Revenue. Taxable and Tax Exempt Sales of Food and Related Items
10
City and County of Denver. Drugs Tax Guide
11
City and County of Denver. Charitable Exemption Tax Guide
12
City and County of Denver. Business Tax Information
13
City and County of Denver. Application for Denver Sales, Use, Lodgers Tax License and Occupational Tax Registration
14
City and County of Denver. Business Tax
15
City and County of Denver. Denver Sales Tax Return – Annual