How to Get a Colorado Sales Tax Exemption Certificate

To get a Colorado sales tax exemption certificate, a qualifying organization files Form DR 0715 with the Colorado Department of Revenue, pays no application fee, and once approved receives a certificate with a unique exemption number that does not expire.¹ The certificate lets the organization buy goods and services for its charitable functions without paying state-collected sales tax, but it comes with firm rules about who pays, how they pay, and which taxing jurisdictions actually honor it.

Who Can Get One

Colorado grants exemptions to several categories of organizations, each under its own statute. Charitable organizations qualify under C.R.S. § 39-26-718, which covers purchases made in the conduct of the organization’s regular charitable functions.² In practice, a charitable organization needs IRS recognition under Section 501(c)(3) or 501(c)(19) of the Internal Revenue Code to be approved.³

Government entities are handled separately. C.R.S. § 39-26-704 exempts sales to the United States government, the State of Colorado and its departments, and political subdivisions acting in their governmental capacity, along with sales to nonprofit schools.⁴ Religious organizations, federal credit unions, farm credit banks, affordable housing projects, and Colorado political authorities or districts can also apply, each with its own documentation requirements listed on the DR 0715 form.³

How to Apply with Form DR 0715

The application is Form DR 0715, “Application for Exempt Entity Certificate,” and there is no fee to file it.¹ A charitable organization needs to assemble four categories of supporting documents before submitting:⁵

Articles of Incorporation or Organization that state the entity’s specific purpose and function. Generic “any lawful purpose” language is not enough.
A current Certificate of Good Standing from the Colorado Secretary of State.
The IRS determination letter confirming 501(c)(3) or 501(c)(19) status. Churches operating under a national church body should include an official document from that national body confirming group affiliation; organizations covered by a group exemption can submit a letter from the central organization instead of their own determination letter.
Financial statements showing Colorado income sources and expenditures. Newly formed organizations without a financial history can submit a projected budget instead.

Other qualifying categories submit different paperwork. A federal credit union provides its federal charter. A Colorado political authority or district provides the establishing statutory act and jurisdictional documentation. The form itself lists what each category needs.

Submitting and Waiting

The completed DR 0715 and attachments go to the Department of Revenue, which accepts the application online or by mail through its Tax Exemption Application page.⁵ If approved, the department issues a certificate containing a unique exemption number for use on all future exempt purchases. If denied, the department sends a written explanation.

The department does not publish a specific processing timeline. Plan for several weeks, longer if anything is missing. Incomplete applications are the most common cause of delay, so confirm every required attachment is present before submitting.

Using the Certificate Correctly

Once approved, the organization presents the certificate to vendors when buying for its charitable functions. How payment must be made depends on the purchase amount.⁶

For purchases under $100, the buyer shows the vendor a copy of the valid exemption certificate (or has one on file with that vendor) and signs an affidavit stating the purchase is being made with the organization’s funds.
For purchases of $100 or more, payment must be made with the organization’s check or credit card. Cash, personal checks, and personal credit cards do not qualify, even if the organization intends to reimburse the buyer later.

That reimbursement rule catches a lot of organizations. An employee who pays with a personal card and submits a receipt for reimbursement loses the exemption on anything $100 or over, regardless of intent. The money has to come directly from the organization. Vendors are expected to keep a copy of the certificate on file to justify uncollected tax if they are audited.⁶

The certificate itself does not expire, so there is no renewal process.¹ If the underlying qualifying status changes, though, such as a loss of 501(c)(3) recognition, the exemption is no longer valid regardless of what the paper certificate says.

What the Certificate Does Not Cover

Two limitations surprise organizations often enough to deserve attention up front.

The first is home-rule cities. The state exemption certificate only covers state-collected sales tax. It does not apply to sales tax levied by self-collecting home-rule cities.⁶ Colorado has dozens of home-rule jurisdictions, including Denver, Colorado Springs, Aurora, and Boulder, that run their own sales tax systems with their own rules. Each self-collecting city decides independently whether to honor charitable exemptions and what application to use.⁷ An organization operating across multiple Colorado cities may need to apply in each one. Before a large purchase, verify with the city where the transaction will occur that the exemption applies there.

The second limitation runs the other direction. Holding an exemption certificate means the organization does not pay sales tax on its own qualifying purchases. It does not excuse the organization from collecting sales tax when it sells goods to the public. An exempt organization that makes retail sales is subject to the same licensing requirements as any other retailer, unless its sales qualify for the occasional-sale exception. That exception applies only when all four of these are true: the sales are for fundraising, all proceeds are retained for the organization’s charitable work, sales occur on 12 or fewer days during the calendar year, and net proceeds stay at or below $45,000 for the year. Cross either threshold and the organization needs a state sales tax license and must collect and remit tax like any other vendor.⁸ Thrift stores, bookshops, and recurring event programs often pass these limits without noticing.

Keeping the Exemption Valid

Colorado’s exemption rests on the organization’s federal tax-exempt status. If the IRS revokes 501(c)(3) recognition, the state exemption effectively falls apart. The IRS automatically revokes exempt status when an organization fails to file its required annual return (Form 990, 990-EZ, or 990-N) for three consecutive years.⁹

The operational rules behind 501(c)(3) status also have to keep being met. No net earnings may benefit private shareholders or individuals, and the organization cannot engage in political campaign activity or make influencing legislation a substantial part of its work.¹⁰ The IRS notes that state and local laws may also be affected when an organization loses federal tax-exempt status.⁹

Misusing the certificate, whether for personal purchases or for activities outside the organization’s charitable mission, can result in revocation of the certificate, back taxes with interest, and potential criminal penalties depending on the amount involved and whether the misuse was intentional. The organization bears the consequences, not just the individual who made the purchase. Keeping records that tie each exempt purchase to a legitimate organizational purpose is the cleanest protection during an audit.

1
Colorado Department of Revenue. Certificates of Exemption
2
Justia Law. Colorado Revised Statutes Title 39 Section 39-26-718 – Charitable Organizations
3
Colorado Department of Revenue. DR 0715 Application for Exempt Entity Certificate
4
FindLaw. Colorado Revised Statutes Title 39 Section 39-26-704 – Miscellaneous Sales Tax Exemptions
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Colorado Department of Revenue. Tax Exemption Application
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Colorado Department of Revenue. Tax-Exempt Purchases
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Colorado Department of Revenue. Charities and Nonprofit Organizations
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Colorado Department of Revenue. Fundraising and Sales Tax
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Internal Revenue Service. Automatic Revocation of Exemption
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Internal Revenue Service. Exemption Requirements – 501(c)(3) Organizations