Lakewood Sales Tax: Rate Breakdown, Use Tax, and Business Rules

The Lakewood sales tax rate is 7.5% in most of the city, combining a 3% city tax collected directly by Lakewood with 4.5% in state, county, and special district taxes.¹ Two shopping areas have their own totals, and because Lakewood is a home-rule city, its rules on what counts as taxable can differ from the state’s.

How the 7.5% Breaks Down

The 4.5% state-administered portion is made up of 2.9% for the State of Colorado, 0.5% for Jefferson County, 1.0% for the Regional Transportation District, and 0.1% for the Scientific and Cultural Facilities District.¹ Lakewood’s own 3% is paid directly to the city’s Finance Department. The state portion goes to the Colorado Department of Revenue. These are two separate payments to two separate agencies.

Two addresses pay something different. Belmar uses a reduced city rate of 1.0%, so purchases made there total 5.5%. Marston Park and Belleview Shores add a 0.43% surcharge for the Southeast Jefferson County Road Improvement District, bringing those sales to 7.93%. Items shipped into Belmar are taxed at the standard 3% city rate, not the reduced Belmar rate.¹

What’s Taxable and What Isn’t

Lakewood taxes all retail sales of tangible personal property unless an exemption applies, plus a broader list of services than many shoppers expect. Taxable services include telecommunications billed to a Lakewood address, residential and commercial gas and electric service, hotel and short-term lodging, security system monitoring, custom and modified software, linen and sound system services, and cover charges at theaters and licensed public venues.² Prepared food from restaurants, caterers, and food trucks is taxable, and freight or delivery charges tied to a taxable sale are included in the taxable price.

Unprepared groceries are exempt. Lakewood follows the state’s definition of food for home consumption, so what you buy at the supermarket for cooking at home is not taxed, but hot food and anything marketed for immediate consumption is.³

Prescription drugs are exempt. Over-the-counter medications are taxable even when a doctor prescribed them. Prescription eyeglasses, including lenses and frames, are exempt, but add-ons like anti-glare coatings or tinting are taxable and must be listed separately on the invoice. Prosthetic devices and prescribed dental devices such as custom mouth guards and orthodontic appliances are exempt.³

Other exemptions cover sales to federal and state government, sales to charitable organizations holding a Lakewood-issued exemption certificate, cigarettes (other tobacco products stay taxable), and some agricultural items including livestock and poultry. Fuel and power used in mining, refining, irrigation, construction, and telecommunications also qualify.³

Use Tax on Purchases From Outside the City

Lakewood charges a 3% use tax whenever you buy something for use in the city but didn’t pay Lakewood sales tax at the register. This typically comes up with out-of-state vendors that don’t collect Lakewood tax, or purchases made in a lower-tax jurisdiction and brought home.⁴

If you paid another Colorado city’s sales tax on the item, you owe Lakewood only the difference between that city’s rate and Lakewood’s 3%. A 2% rate elsewhere means you still owe Lakewood 1%.⁴

Construction materials work differently and carry a real trap. For permitted jobs, the city collects a 3% use tax deposit when the building permit is issued, calculated on 50% of the estimated contract cost. If a contractor then buys materials outside Lakewood without presenting the building permit, that other jurisdiction may charge its own sales tax, and Lakewood still expects the full 3% with no credit for the tax paid elsewhere.⁴ Presenting the permit at purchase is what prevents the double hit.

If You Run a Business in Lakewood

Any business with a substantial presence in Lakewood needs a sales and use tax license before collecting tax. Substantial presence includes an office, warehouse, or retail location in the city, employees or agents coming into Lakewood to solicit business or service products, and owning or leasing property inside city limits.⁵

Apply through Lakewood Business Pro. The license fee is $20, nonrefundable. The city recommends applying at least 30 days before you start, because Finance checks the location against code and building requirements. Missing that window by starting operations without applying triggers a $30 late charge. Licenses run for two years, and the city sends renewal notices 90 days before expiration.⁵

Returns are filed through the same Lakewood Business Pro portal and are due by the 20th of the month following the reporting period. Monthly filing is the default, but the Chief Financial Officer may allow quarterly filing for businesses collecting less than $300 per month in city tax.⁶ The state portion follows its own schedule: businesses collecting under $600 per month in state tax can file quarterly with the Department of Revenue, and those collecting $15 or less per month can file annually.⁷

Late payment brings a 10% penalty on the tax owed, with interest accruing monthly on top until the balance is paid.⁸ Filing on time without full payment is almost always better than not filing, since unfiled returns can trigger additional enforcement.

Selling Into Lakewood From Outside

Out-of-state retailers that exceed $100,000 in annual sales into Colorado are required to collect state sales tax, and that threshold reaches home-rule cities like Lakewood. Lakewood participates in the Colorado Sales and Use Tax System (SUTS), so remote sellers can register and file for the city through a single state portal rather than onboarding separately with each home-rule jurisdiction. The city still administers and audits its own tax.⁹

Selling Through a Marketplace

If you sell through a platform such as Amazon or Etsy, the marketplace facilitator is generally responsible for collecting and remitting Lakewood sales tax on the sales it processes, regardless of whether you as the individual seller would have been required to collect on a standalone sale. You’re relieved of retailer obligations for those facilitated sales if you can show a contract stating the facilitator will collect and remit, or a good-faith certification from the facilitator confirming its registration. The city audits the facilitator, not the individual sellers, for sales made on the platform. Direct sales you make outside the marketplace stay your responsibility to report and remit.²

1
City of Lakewood. Sales and Use Tax
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City of Lakewood. Lakewood Municipal Code Chapter 3.01 – Sales and Use Tax Code
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City of Lakewood. Rules and Regulations – Sales and Use Tax
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City of Lakewood. Tax Compliance Guide – Use Tax
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City of Lakewood. License My Business
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City of Lakewood. Tax Compliance Guide – Sales Tax
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Department of Revenue – Taxation. Sales Tax Filing Information
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City of Lakewood. Construction – Use Tax on Building Permits
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Colorado Department of Revenue – Taxation. SUTS Participating Jurisdictions