Denver tax rates cover more than just the familiar sales tax at the register. The city collects a combined 8.81% sales tax on most purchases, charges property tax based on a mill levy of 79.602, imposes a flat monthly occupational privilege tax on anyone working within city limits, and layers additional rates on lodging, marijuana, and vehicle ownership. Because Denver is a home-rule municipality, it sets and administers many of these taxes independently from Colorado.
Sales and Use Tax
The combined sales tax rate on most tangible goods in Denver is 8.81%.1City and County of Denver. Introduction to Sales and Retailers Use Tax That figure stacks four separate levies:
- Denver municipal tax: 4.81%
- State of Colorado: 2.90%
- Regional Transportation District (RTD): 1.00%
- Scientific and Cultural Facilities District: 0.10%
Denver also imposes a use tax at the same 8.81% on goods you buy without paying sales tax, which comes up most often with online orders from sellers that don’t collect Denver tax. If you bought something tax-free and use or store it in Denver, you owe the equivalent tax directly to the city.2City and County of Denver. Denver Use Tax Return Quarterly The Colorado Department of Revenue does not handle use tax collection for home-rule cities, so Denver administers its own.3Colorado Department of Revenue. Consumer Use Tax Guide
Groceries vs. Prepared Food
Food purchased for home consumption is exempt from Denver’s 4.81% municipal sales tax.4City and County of Denver. Business Tax FAQ You’ll still pay the state, RTD, and cultural district portions on groceries, but the city’s slice drops off.
Prepared food and beverages are taxed differently. The combined rate on restaurant meals and prepared items is 8.00%, with Denver’s portion set at 4.00% instead of the standard 4.81%, plus the state and district taxes on top.5City and County of Denver. Denver Combined Tax Rates
Property Tax Rates
Denver property taxes are calculated by multiplying a property’s assessed value by the combined mill levy. One mill equals one dollar of tax per $1,000 of assessed value.6City and County of Denver. Assessors Office The Denver Assessor sets the actual value of each property, then applies the state assessment rate to produce the taxable assessed value.
For 2026, the residential assessment rate is 6.8% of actual value, applied after a 10% reduction on the first $700,000 in actual value.7Colorado Division of Property Taxation. Residential Local Government Assessment Rate Commercial and all other property types are assessed at 27%, so owners of similar-value properties pay very different amounts depending on classification.
Denver’s total combined mill levy in 2025 was 79.602 mills.8City and County of Denver. Assessment FAQ Denver Public Schools accounted for the largest share at 52.274 mills, with the city and the Urban Drainage and Flood Control District making up the remaining 27.328 mills. The 2026 levy may differ once certified.
Senior and Disabled Veteran Exemption
Colorado offers a property tax exemption that applies in Denver for qualifying seniors and disabled veterans. If you’re eligible, 50% of the first $200,000 in actual value on your primary residence is exempted from property tax, a $100,000 reduction in the value subject to taxation.9Colorado Division of Property Taxation. Senior Citizen and Veterans With a Disability Property Tax Exemption and Senior Primary Residence Classification
Seniors must have owned and occupied the home as their primary residence as of January 1 of the application year. Disabled veterans have no age requirement but must hold a qualifying VA-approved disability rating. The exemption is not applied retroactively. The deadline to file your application for 2026 is July 15, 2026.
Occupational Privilege Tax
Anyone who works in Denver owes the Occupational Privilege Tax, often called the “head tax.” It applies to employees who earn at least $500 in a calendar month or who work more than 13 hours within the city during a month.4City and County of Denver. Business Tax FAQ The tax has two components:
- Employee portion: $5.75 per month, withheld from wages
- Employer portion: $4.00 per month for each qualifying employee
Both amounts are flat and don’t scale with income.10City and County of Denver. Occupational Privilege Taxes Employers withhold the employee portion and remit both parts to the city. Nonprofits, religious organizations, and government entities are not exempt. If you work for a 501(c)(3) in Denver, your employer still withholds the $5.75 and pays its $4.00 share.4City and County of Denver. Business Tax FAQ
Vehicle Sales and Ownership Tax
Buying a vehicle and registering it in Denver triggers the same 8.81% combined sales tax applied to other retail purchases, calculated on the purchase price and collected at registration.11City and County of Denver. Fees and Sales Tax
After the initial purchase, you pay a specific ownership tax each year rather than personal property tax on the vehicle. For most passenger cars, the taxable value is 85% of the original MSRP, and the rate drops as the vehicle ages:12Colorado Department of Revenue – Motor Vehicle. Taxes and Fees
- Year one: 2.10% of taxable value
- Year two: 1.50%
- Year three: 1.20%
- Year four: 0.90%
- Years five through nine: 0.45%
- Year ten and beyond: flat $3.00
Trucks and trailers under 16,000 pounds use a slightly different schedule, with taxable value set at 75% of MSRP.
Lodging, Marijuana, and Telecom
Short-term stays in Denver are taxed at 10.75%, which replaces the standard sales tax rate rather than adding to it. The rate applies to hotels, short-term rentals, and any sleeping accommodation booked for fewer than 30 consecutive days.13City and County of Denver. Lodgers Tax Hotels with 50 or more rooms owe an additional 1% Tourism Improvement District surcharge, bringing their total to 11.75%. Smaller hotels and most short-term rental hosts pay only the 10.75% base rate.14City and County of Denver. Short-Term Rentals Tax Guide Topic 97
Retail marijuana purchases carry a combined local tax of 10.31%, made up of the standard 4.81% city sales tax plus a 5.5% special marijuana tax.15City and County of Denver. Marijuana – Medical and Retail The state adds its own 15% retail marijuana sales tax and 2.9% standard sales tax on top of that.16Colorado Department of Revenue. Marijuana Sales Tax
Telecommunications companies pay a flat $1.12 per month for each account receiving a basic dial-tone line within the city.17City and County of Denver. Telecommunications Business Tax Consumers won’t see it as a separate line item, but providers build it into their pricing.
Filing Deadlines and Penalties for Businesses
How often a business files Denver tax returns depends on how much it owes. If your average monthly tax liability over the past six months exceeds $300, you file monthly, due by the 20th of the following month. If it averages $300 or less, you can file quarterly. Businesses averaging $15 or less per month qualify for annual filing.18City and County of Denver. Filing Periods Marijuana businesses, bars, liquor stores, restaurants, caterers, and street vendors must file monthly regardless of liability.
When a due date falls on a weekend or holiday, the deadline shifts to the next business day. For state-administered taxes, the penalty for failing to file or pay starts at the greater of $15 or 10% of the unpaid tax, plus 0.5% per month the tax remains unpaid, up to a maximum of 18%. Late payments also accrue interest at 8% or 11% annually, depending on how quickly you resolve the balance. Denver’s penalty structure follows a similar approach.