Does Colorado Charge Sales Tax on Out-of-State Cars?

If you live in Colorado and buy a vehicle in another state, you owe Colorado sales tax on the car when you register it at home, and the Colorado sales tax on out-of-state cars is calculated using your home address, not the seller’s location. The statewide rate is 2.9%, plus whatever county, city, and special district taxes apply where you live.¹ If another state’s dealer already collected sales tax, Colorado credits what you paid against its 2.9% state portion, up to that amount; local taxes still apply in full.

What You’ll Actually Owe

Start with 2.9% for the state.¹ Add your county tax, city tax, and any special districts that overlap your address, such as the 1.0% Regional Transportation District (RTD) tax or the 0.1% Scientific and Cultural Facilities District (SCFD) tax along the Front Range.² Combined rates commonly land between 6% and 10%, so a $30,000 car can carry roughly $1,800 to $3,000 in sales tax before registration fees. Look up your exact rate on the Colorado Department of Revenue’s tax rate lookup before you sign anything.

Tax is calculated on the net purchase price, meaning the amount after a trade-in is subtracted. Colorado honors the trade-in deduction whether the sale happened in-state or out-of-state.³

Credit for Tax Already Paid

If the out-of-state dealer collected sales tax, Colorado gives you a credit against its 2.9% state tax equal to what you already paid, capped at 2.9% of the purchase price.⁴ The credit only touches the state portion. Say you bought in a state that charges 4% and your Colorado combined rate is 8%. The 4% you paid wipes out Colorado’s 2.9% state tax, but you still owe the full 5.1% in county, city, and district taxes when you register.

If you bought in a state with no sales tax, there is nothing to credit. Oregon, Montana, New Hampshire, Delaware, and most purchases in Alaska fall into this group. You pay the full Colorado state and local amount at the clerk’s office.

Dealer Purchases vs. Private Party Purchases

A licensed dealer, whether located in Colorado or elsewhere, typically collects sales tax at the point of sale and provides a receipt documenting what was paid. Bring that receipt to the county clerk and they will charge only the difference, if any.

Private sellers do not collect sales tax.³ That means the full state and local tax is due directly to the county clerk when you title and register the vehicle. Buy a $20,000 car from a private seller at a 7.5% combined rate and you need $1,500 ready at the counter on top of registration fees. Plan for it before you hand over the check.

Nonresidents Buying From a Colorado Dealer

If you live outside Colorado and buy from a Colorado dealer, you can generally avoid Colorado sales tax entirely under the nonresident motor vehicle exemption, provided you will register the vehicle in your home state.⁵ You must sign an affidavit stating you will remove the vehicle from Colorado within 30 days of purchase. The dealer uses Form DR 0780 (Statement of Colorado Sales Tax Exemption for Motor Vehicle Purchase) and keeps it on file. A valid driver’s license from your home state proves residency.

This exemption does not erase your tax bill. Your home state will almost certainly collect its own sales or use tax when you register the car there.

Private party purchases by nonresidents are simpler still. The seller is not required to collect tax, and since you will not register in Colorado, no Colorado tax is owed. You settle up with your home state at registration.⁵

What to Bring to the County Clerk

Registering an out-of-state vehicle in Colorado means arriving with a complete file. A missing document sends you home and the 60-day clock keeps running.

The original out-of-state title signed over to you, or the Manufacturer’s Certificate of Origin for a brand-new vehicle.
A bill of sale showing the final purchase price and any trade-in value.
Proof of tax paid: a dealer invoice or receipt itemizing sales tax already collected. Without it, you cannot claim the credit against Colorado’s 2.9%.
A completed Verification of Vehicle Identification Number form (DR 2698), signed by an authorized inspector.
Proof of Colorado liability insurance in your name, effective before registration.
Emissions test results, if your address is in a testing area.

One form you can skip worrying about is the DR 0024, the Standard Sales Tax Receipt for Vehicle Sales. Dealers complete it, not individual buyers.⁶ If you bought from a dealer, they should give you a completed copy. If you bought from a private party, the clerk calculates your tax from the bill of sale instead.

The 60-Day Deadline and Late Penalties

You have 60 days from the purchase date to register the vehicle.⁷ Starting on day 61, late fees accrue at $25 per month or partial month, capped at $100.⁸ That is on top of prorated back taxes and fees for the time the vehicle went unregistered.⁹

Unpaid sales or use tax also accrues interest from the original due date. For 2026, the annual rate is 8% if you pay before receiving a notice of deficiency or within 30 days of one, and 11% if you do not.¹⁰ On a $2,000 tax bill, even the lower rate adds roughly $13 per month.

If you are waiting on a title to arrive or an emissions slot to open up, ask your county clerk for a temporary plate. For a vehicle bought from a private party or an out-of-state dealer, the clerk can issue one valid for up to 60 days from the purchase date.¹¹ It expires at midnight on the printed date with no grace period.

VIN Inspection and Emissions Testing

Every vehicle entering Colorado from another state needs a VIN inspection on Form DR 2698. The inspection confirms the identification number matches the title.¹² Colorado law enforcement, licensed Colorado dealers, and county clerks (at their discretion) can sign off. If the vehicle is still in another state, certified law enforcement, military police, or authorized DMV personnel there can complete it.

Emissions testing is required if you live in one of these areas:¹³

All of Boulder, Broomfield, Denver, Douglas, and Jefferson counties.
Portions of Adams, Arapahoe, Larimer, and Weld counties.

An out-of-state vehicle is not exempt. If you are in a partial county and unsure whether your address falls in the testing zone, call the county motor vehicle office before scheduling an appointment.

Don’t Forget the Specific Ownership Tax

Sales tax is not the only line item at the counter. Colorado charges an annual specific ownership tax in place of a personal property tax on vehicles. It is based on the vehicle’s original taxable value (generally 85% of MSRP for passenger cars) and declines with age: 2.10% in year one, 1.50% in year two, 1.20% in year three, continuing down to a flat $3.00 per year after year ten.⁹

For an out-of-state vehicle being registered in Colorado for the first time, the tax is based on the vehicle’s age and original MSRP, not what you paid. A three-year-old SUV with an original MSRP of $45,000 has a taxable value of about $38,250 and an ownership tax of roughly $459 at the 1.20% third-year rate. Budget for it alongside sales tax so the total at the clerk’s counter is not a surprise.

1
Weld County. Sales Tax – Motor Vehicle
2
Colorado Department of Revenue. Colorado Sales/Use Tax Rates
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Colorado Department of Revenue. Sale and Use Tax Topics: Motor Vehicles
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Grand County, CO. Sales and Use Tax
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Colorado General Assembly. Commercial Trucks and Trailers Licensed Out-of-State and Nonresident Motor Vehicle Exemptions
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Colorado Department of Revenue – Taxation. DR 0024 – Standard Sales Tax Receipt for Vehicle Sales
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Department of Revenue – Motor Vehicle. FAQs – Registration
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FindLaw. Colorado Revised Statutes Title 42 Vehicles and Traffic 42-3-112
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Department of Revenue – Motor Vehicle. Taxes and Fees
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Colorado Department of Revenue. Tax Topics: Penalties and Interest
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Jefferson County, CO. Temporary Tags
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Colorado Department of Revenue. Verification of Vehicle Identification Number
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Department of Revenue – Motor Vehicle. Gas Vehicles