The Sterling, CO sales tax rate is 7.0% on taxable retail sales inside city limits. That total blends state, county, city, and regional transportation taxes. Sterling is a home-rule city, so it sets and collects its own 3.0% municipal portion separately from the Colorado Department of Revenue, which means businesses deal with two tax authorities rather than one.1City of Sterling. Finance
How the 7.0% Breaks Down
- State of Colorado: 2.9%
- Logan County: 1.0%
- City of Sterling: 3.0%
- South Platte Valley Regional Transportation Authority: 0.1%
Every qualifying retail sale within city limits carries all four layers.1City of Sterling. Finance
What Sterling Taxes
Sterling applies its sales tax to retail sales of tangible personal property, which covers the usual categories: household goods, electronics, clothing, and building materials. The city also taxes certain services and utilities, including electricity, gas, fuel oil, and coal for both home and commercial use.2Municode Library. Sterling Code of Ordinances – ARTICLE III. – SALES TAX Leases and rentals of tangible goods are taxable too.
Groceries Are Taxed Locally
Colorado exempts most grocery food from the state’s 2.9% rate, but home-rule cities can tax food locally, and Sterling does. Groceries bought inside city limits carry Sterling’s 3.0% city rate along with the county and RTA pieces. Purchases made with food stamps or WIC vouchers remain exempt regardless of local policy.3Department of Revenue – Taxation. Taxable and Tax Exempt Sales of Food and Related Items
Digital Products
Because Sterling’s definitions can differ from the state’s, businesses selling digital goods or software-as-a-service into Sterling should confirm their obligations directly with the city finance department rather than rely on state-level guidance.
Use Tax on Untaxed Purchases
When a Sterling business buys something for its own use and the seller doesn’t collect sales tax, the buyer owes use tax instead. This comes up with online orders from out-of-state vendors, equipment picked up at trade shows, and items originally purchased for resale that get pulled from inventory for internal use.4Department of Revenue – Taxation. Sales Tax Guide The use tax rate mirrors the sales tax rate, so the combined obligation is the same 7.0%. Self-assessed use tax is easy to overlook, and it’s one of the first things auditors look at.
The Two Licenses You Need
Selling taxable goods in Sterling requires both a state license and a city license.
The state license comes from Form CR 0100, filed with the Colorado Department of Revenue, which asks for the business’s legal name, federal employer identification number, physical address, and mailing address.5Department of Revenue – Taxation. CR 0100 – Colorado Sales Tax and Withholding Account Application State licenses run in two-year cycles; the current period ends December 31, 2027, and renewal costs $16 per physical location.6Department of Revenue – Taxation. Renew Your Sales Tax License
The city license is separate and can be submitted electronically through Sterling’s website.7City of Sterling. Sales Tax Transient vendors and peddlers at temporary locations pay $50 per location.8Municode Library. Sterling Code of Ordinances – ARTICLE III. – SALES TAX Operating without the proper license violates city ordinance.
Out-of-state sellers crossing Colorado’s $100,000 economic nexus threshold must register with the state.9Department of Revenue – Taxation. Out-of-State Businesses Sterling may impose its own separate requirements on remote sellers, so contact the city finance department to confirm whether a local license and local tax collection are also required.
Filing and Payment
Sterling joined Colorado’s Sales and Use Tax System (SUTS) in October 2024. The SUTS portal lets businesses file state, county, and participating municipal returns in one place.10Department of Revenue – Taxation. Sales and Use Tax System
The city sets filing frequency based on how much city tax a business owes:
- Monthly: required when city taxes owed exceed $40 per month, due by the 20th of the following month.
- Quarterly: allowed when city taxes owed are less than $40 per month.
- Annual: allowed when city taxes owed are less than $10 per month.
If the 20th lands on a weekend or holiday, the due date shifts to the next business day.7City of Sterling. Sales Tax The state uses different, higher dollar thresholds for assigning frequency, so a business can end up on different schedules with the city and the state. Track both.
No More Vendor Fee Starting in 2026
Colorado used to let retailers keep a small service fee for collecting and remitting state sales tax on time. That fee ends January 1, 2026. Retailers may not retain any portion of the state sales tax they collect after that date.11Department of Revenue – Taxation. Service Fee A business still deducting the old vendor fee from its state remittances will come up short and face penalties.
Late Penalties and Record Keeping
Sterling charges a 10% penalty on late returns, plus 1% interest per month on the unpaid balance.7City of Sterling. Sales Tax Those charges begin the day after the due date. The state’s penalty is the greater of $15 or 10% of the amount due, with additional monthly charges for continued nonpayment.12Department of Revenue – Taxation. Penalties and Interest
Colorado requires retailers to keep sales records, invoices, and purchase documentation for a minimum of three years.4Department of Revenue – Taxation. Sales Tax Guide That includes receipts, exemption certificates from wholesale buyers, and records of any use tax you self-assessed. Holding records for four years gives a cushion beyond the standard audit window, and six years is safer if there’s any chance income was significantly understated, since longer lookback periods can apply.