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Colorado Sales Tax

If you sell, rent or lease tangible personal property in Colorado, you must obtain a sales tax license. The type of license you need an the amount of tax you are required to collect depends upon who you are selling to and where and how you are doing business. A license is also required to rent accommodations for periods of less than 30 days. General sales tax reference guide, DR 0099 and Sales Tax FYIs are found at www.taxcolorado.com.

  • If you will be selling any tangible personal property, you must obtain a sales tax license. If you are selling to the end user, you are a retailer. If you will be selling to someone who will resell your product or use it to make another product that is resold, you are a wholesaler. If you are doing both, it is only necessary to obtain a retail sales tax license.
  • Wholesale and retail licenses are $16 for a two-year calendar licensing period. The cost of a new license is prorated during the licensing period. There is a $50 deposit on retail licenses that is refunded once $50 in state sales taxes have been collected and remitted to the Colorado Department of Revenue.
  • If a business has more than one location, each location must be licensed. The $50 deposit is only collected for the first location.
  • If you will be selling products at an organized event, you are required to obtain an event license. A single event license is good only for a single event. A multiple event license is good for an unlimited number of events during the licensing period.
  • A multiple event license costs $16 for a two-year calendar licensing period. The cost of a new license is prorated during the licensing period. A single event license costs $8. If a business has a retail or wholesale license, there is no charge for either a multiple event or single event license.
  • Use the Colorado Business Registration, Form CR 0100, to apply for a retail or wholesale license. Use the Sales Tax Special Events Application, Form DR0589, to apply for a Multiple or Single Event license.
  • If you will be located in a self-collected home rule city, you must contact the city regarding local licensing requirements.
  • Determine your proper sales tax rate for your business location(s). DRP 1002,Sales/Use Tax Rates, contains the individual rates for all the different sales tax jurisdictions in Colorado.

If you purchase items to use in your business, sales/use tax should be paid at the time of purchase or by filing a Consumer Use Tax Return, Form DR0252. The tax on items which were originally purchased for resale but are actually used by your business should be paid on your sales tax return. You may also be subject to local use taxes. Check with the city’s sales/use tax (DRP 1002).

WORKSHEET

State Sales Tax…………….2.9%
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A retail sales tax license is required if you are selling, renting or leasing your product to the end user of the product.

If you will be selling a product to the end user, you must collect sales tax.

It is illegal to use your sales tax license to obtain personal goods or assets which you will use in business tax-free.

Once you have obtained a sales tax license, the Department of Revenue will send you preprinted “Combined Retail Sales Tax Return” forms DR 0100.

There are locations around the state.

Use tax is imposed on the storage, use or consumption in Colorado of tangible personal property upon which Colorado sales tax has not been paid.

Website Internet access, e-mail services, website hosting and domain name registration are nontaxable services in Colorado.