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Consumer Use Tax

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. For example, if you purchase a piece of machinery for your business in another state, consumer use tax must be paid in Colorado. The amount of tax is based upon the primary location where an item is used and the purchase price or fair market value. The state use tax rate is 2.9 percent, the RTD/SCFD rates total 1.1 percent, and the RTA district taxes vary from one location to another. These taxes are paid to the Department of Revenue by filing a “Consumer Use Tax Return,” Form DR 0252. If you use items taken from your sales inventory, you may report the cost and tax online 10 of your sales tax return. Using either method, county and city use taxes may also be due. If the seller collects the tax, it’s sales tax. If the seller does not collect the appropriate tax, the consumer (user) must pay use tax. File and pay at www.taxcolorado.com