See Claim for Refund (form DR 0137) and the associated instructions for information about the documentation required with refund claims. A retailer who qualifies for origin sourcing based on prior year sales will nonetheless transition to destination sourcing if the retailer’s total retail sales in Colorado in the current year exceed $100,000. An associated service charge is separately stated if it appears as a distinct line item on a written sales contract, retailer’s invoice, or other written document issued in connection with the sale, apart from the price of the property sold. The Colorado Department of Revenue does not administer use taxes for any city or county. The retailer must hold such monies in trust for the sole use and benefit of the State of Colorado, or the appropriate local jurisdiction, until remitted to the Department. div.easy_social_box { display: none !important, } Retailers are encouraged to consult their tax advisors for guidance regarding specific situations. These new guides and supplements will replace the "FYI" publications previously issued by the Department. The retailer’s return must properly account not only for all state sales tax, but also for all sales tax collected and due for each applicable state-administered local jurisdiction. See the Colorado Sales Tax Guide for additional information. Purchasers who meet certain qualifications may apply for a direct payment permit. Charge the tax rate of the buyer’s address, as that’s the destination of your product or service. Any seller participating in a special event must file a return and remit payment of sales taxes for the event, unless the seller has remitted the taxes to the event organizer who has obtained a license as described above. This. Retailers are required to keep and preserve any books, accounts, and records as may be necessary to determine the correct amount of tax for a minimum of three years. If there is disagreement between the retailer and the purchaser about whether or not a sale is exempt, the retailer must collect the tax and the purchaser is obligated to pay it. If a retailer properly uses the GIS database, a third-party database this is verified to use the most recent information provided by the GIS database, or a certified electronic address database to determine the local jurisdictions to which tax is owed for a given sale, the retailer will not be held liable for any local sales tax the retailer failed to properly collect solely as a result of an error or omission in the database. Any local sales taxes the retailer collected in the prior year are not considered in determining whether the retailer exceeded the $75,000 threshold. A retailer will owe penalties if they neglect or refuse to: These penalties are imposed at a rate of 10% of the unpaid tax, plus an additional 0.5% for each month the tax remains unpaid, not to exceed a total of 18%. Colorado law states that generally, shipping and handling charges are not subject to sales tax as long as the following conditions are met: a.) Retailers must file sales tax returns reporting all sales made, whether taxable or exempt, at regular intervals in accordance with prescribed filing schedules. Individuals and businesses with specific questions should consult their tax advisors. Sales tax collection and filing A marketplace facilitator may be exempt from these requirements if sales made through the marketplace fall below certain thresholds. If the retailer issues the buyer a receipt, invoice, or other document setting forth the purchase price, the retailer must separately state the tax on such document. All sums of money paid by the purchaser to the retailer as sales taxes are and remain public money and the property of the State of Colorado, or the appropriate local jurisdiction, in the hands of such retailer. A retailer who makes sales only through a marketplace may be exempt from sales tax licensing, collection, and filing requirements if the marketplace facilitator collects all applicable state and state-administered local sales taxes on the retailer’s behalf. Join the Journey. The Colorado Department of Revenue administers and collects sales taxes imposed by many cities, most counties, and a number of special districts. This Part 11 provides additional information regarding the responsibilities of the buyer and the seller related to the sale of a retail business. Sales of ingredients or component parts to manufacturers for incorporation into a product for sale to an end user or consumer are also regarded as wholesale sales. Additionally, the organizer must provide a list of the sellers participating in the event to the Department. See. Additionally, otherwise nontaxable services may be subject to sales tax if they are provided as part of a transaction involving the sale of tangible personal property. The Tax Guide covers the following topics: Advertising agencies; Agents, salespersons, auctioneers, and manufacturer's representatives ... city of pueblo colorado. The Department will issue a written notice to the retailer of the estimated taxes due, along with any applicable penalty and interest. In the case of such disagreement, the retailer must issue to the purchaser a receipt or certificate showing the names of the retailer and purchaser, the item(s) purchased, the date, price, amount of tax paid, and a brief statement of the claim of exemption. However, a lease for a term of 36 months or less is tax-exempt if the lessor has paid Colorado sales or use tax on the acquisition of the leased property. Retailers must consider whether the nature of goods or services sold is consistent with the purchaser’s claim that the sale is exempt from sales tax. Retailers may accept coupons from their customers for a reduction in the amount paid by the customer. If a purchaser asserts that the sale qualified for exemption and the tax was collected by the retailer in error, the retailer may claim a refund or credit on behalf of the purchaser, but is not required to do so. The protest or request for hearing must contain at least the following information: The protest or request for hearing must be signed by the retailer and filed in duplicate. Specific rules govern the imposition of state-administered local sales taxes on motor vehicles and building materials. The sourcing rules described in this section apply to both state and state-administered local sales taxes. The retailer must disclose the sales tax as a separate and distinct item. As a result, the retailer’s sales will be sourced under the origin sourcing rules as the current year begins. The taxability of maintenance agreements and warranties sold along with tangible personal property is generally determined under the same rules as other associated service charges. Any seller participating in a special event must file a return and remit payment of sales taxes for the event, unless the seller has remitted the taxes to the event organizer who has obtained a license as described above. Sales of services are generally not subject to Colorado sales tax. Colorado has specific rules regarding the taxability of computer software. A bona fide gift of tangible personal property is not a “sale”. Anyone who starts a new retail business or purchases an existing retail business must apply for and obtain a new sales tax license. Including local taxes, the Colorado use tax can be … The deduction is allowed to be retained by the business to provide assistance from business disruptions due to COVID-19 pandemic. Cities, counties, and special districts in Colorado can also impose tax on sales made within their boundaries. In general, the tax does not apply to sales of services, except for those services specifically taxed by law. The purchaser must ensure that seller has satisfied all sales tax liabilities of the business and assumes the liability for any unpaid sales taxes. Information about license applications and renewals is available online at Colorado.gov/Tax. Visit the How to Look Up Sales & Use Tax Rates web page for more sales and use tax rate information. If the 20th falls on a Saturday, Sunday, or legal holiday, the retailer’s return and tax remittance is due the next business day. Any claim for refund or credit must be made using the applicable Department form(s) and submitted to the Department within three years from the due date of the return on which the overpayment was made or within one year of the date of overpayment, whichever is later. TAX GUIDE. Additionally, every retailer must keep and preserve for a period of three years all invoices of goods and merchandise purchased for resale. With respect to any tax-exempt sale, the retailer must obtain and retain sufficient information and documentation from the purchaser to verify the eligibility of the sale for exemption. The seller must collect sales tax for any tangible personal property, other than inventory, transferred to the purchaser as part of the sale. Retailers must maintain all records necessary to determine the correct amount of tax and provide these records to the Department upon request. The tax rates in the city differ. Every sale that is not a wholesale sale is a retail sale. However, Colorado law exempts several types of tangible personal property from sales tax. § 29-2-105, C.R.S. The following sections outline criteria for determining whether a particular transaction is a sale, whether a particular sale is a retail sale, and whether a retail sale is made in Colorado and therefore subject to Colorado tax. The Colorado Department of Revenue administers not only state sales tax, but also the sales taxes imposed by a number of cities, counties, and special districts in Colorado. See, obtains tangible personal property from the retailer to sell on the retailer’s behalf; or. Colorado sales tax applies to the sale of food and drink served or furnished in or by dining establishments and other like places of business at which prepared food or drink is regularly sold. Under certain circumstances, motor vehicles and building materials are subject to local use taxes, rather than sales taxes. Any person or entity that will engage in the business of selling at retail must first obtain a sales tax license, unless that person or entity is specifically exempted from licensing requirements. SOFTWARE. The consideration exchanged in a sale may include money in any form, property, the rendering of a service, or the promise of any of these things. Retailers must add the state sales tax, along with any state-administered local sales taxes, to the sale price or charge for any taxable sale. Colorado generally does not impose a state sales tax on services. ... We’ve put together an Colorado Sales Tax Quick Reference Guide that puts the important information you need to know at your fingertips. Land and buildings are real property. See. Sales of rooms and accommodations may be exempt when made to a permanent resident who enters into a written agreement for occupancy for a period of at least 30 consecutive days. Interest accrues on any late payment of tax from the original due date of the tax to the date the tax is paid. The Colorado sales tax Service Fee rate (also known as the Vendor's Fee) is 0.0333 (3.33%). Special event licenses apply only to retail sales made at the special sales event by the seller to whom the license is issued. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. A retailer must also retain copies of any of the following forms the retailer has accepted from an out-of-state purchaser: Standard Colorado Affidavit of Exempt Sale (DR 5002), Sales Tax Exemption Certificate (DR 0563), or Multistate Tax Commission Uniform Sales & Use Tax Exemption/Resale Certificate. See Department publication. E911 Surcharge and TRS Surcharges - General 21. A retailer may also accept from an out-of-state purchaser a fully completed Standard Colorado Affidavit of Exempt Sale (DR 5002), Sales Tax Exemption Certificate (DR 0563), or Multistate Tax Commission Uniform Sales & Use Tax Exemption/Resale Certificate. Tax is remitted on the DR 0100, "Retail Sales Tax Return." The retailer must either file a separate return for their sales at the special event or remit the tax for such sales to the event organizer, as described above. Businesses with nexus in Colorado are required to register with the Colorado Department of Revenue and to charge, collect, and remit the appropriate tax. for information about recordkeeping requirements related to the use of the GIS database or certified electronic address databases. Individuals and businesses with specific questions should consult their tax advisors. During the previous calendar year, a retailer’s retail sales in Colorado were less than $100,000. A retailer who receives a notice of deficiency or notice of refund rejection may submit a written protest and request a hearing to dispute the notice. A sale by a wholesaler or jobber to an end user or consumer is a retail sale and not a wholesale sale. If the charge for the maintenance agreement or warranty is both separately stated and separable, the charge is not subject to tax. In general, leases of tangible personal property are considered retail sales and are subject to Colorado sales tax. A retailer maintains no physical location in Colorado. The following sections discuss taxable sales and exemptions. Associated service charges are subject to tax unless both the service is separable from the sale of the property and the service charge is separately stated from the price of the property sold on the invoice or receipt. If the purchaser requests delivery of the property or service to another person, as a bona fide gift from the purchaser, the sale is sourced to the location that person takes possession of the purchased property or first uses the purchased service. The following is a list of statutes, regulations, forms, and guidance relevant in evaluating a retailer’s obligation to collect Colorado sales tax. Gross sales of goods md services for this site,'location only 2. During the previous calendar year, a retailer’s retail sales in Colorado exceeded $100,000. Unless a retailer is delinquent in remitting the tax due, the retailer may deduct and retain a service fee from the collected tax to cover the retailer’s expenses in the collection and remittance of the tax. Colorado exempts several types of property and sales from sales tax. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. While retailers will not collect tax on exempt sales, they must maintain appropriate records and report exempt sales on the applicable lines of the Colorado Retail Sales Tax Return (DR 0100) and associated Schedule A and Schedule B. Colorado has a statewide sales tax rate of 2.9%, which has been in place since 1935. On November 15th of the current year, the retailer’s cumulative retail sales in Colorado for the current year exceed $100,000. These sourcing rules do not apply to leased property. Retailers are required to remit, with the filing of each return, all tax reported on such return, minus any service fee allowed to the retailer. The purchase price includes the full amount paid, or promised to be paid, by the buyer at the time of purchase of the property, excluding only any direct federal tax and any state and local sales tax imposed on the sale. During the previous calendar year, the retailer’s retail sales in Colorado exceeded $100,000. Forms, filing instructions, and electronic filing options are available online at, Regardless of the retailer’s filing frequency (monthly, quarterly, or annually), the retailer must file its sales tax return and remit all applicable tax by the 20, If the retailer is delinquent in remitting the tax due, the retailer is not allowed to deduct and retain any service fee. If the retailer does not issue a document that sets forth the purchase price, then the retailer must disclose the tax of each item on signage clearly visible to the purchaser. The criteria for determining whether a sale takes place within the boundaries of a particular state-administered local taxing jurisdiction are the same as for determining whether a sale takes place in Colorado. They must collect and remit all state and state-administered local sales taxes applicable to the point of sale for each taxable transaction. If a retailer contracts with a certified database provider or a third-party database that is verified to use the most recent information provided by the Department’s GIS database for a “hosted” or “on premise” solution that integrates database utilization into the retailer’s billing system, the contract in effect at the time of the sale will demonstrate the retailer’s reliance on the database with respect to the sale. The Department will issue a notice of deficiency to the retailer based upon this estimate. The following examples demonstrate the application of the small retailer exception for retailers who maintain no physical location in Colorado. A retailer may be doing business in Colorado even if that retailer maintains no physical location in the state, but not if the retailer meets the small retailer exception described below. Instead, any applicable city and county use taxes are generally paid directly to the city or county with the application for either motor vehicle titling or construction permitting. If the retailer issues the buyer a receipt, invoice, or other document setting forth the purchase price, the retailer must separately state the tax on such document. Any retailer who does not maintain a physical location in Colorado is exempted from state sales tax licensing and collection requirements if the retail sales of tangible personal property, commodities, and/or services made annually by the retailer into Colorado in both the current and previous calendar years are less than $100,000. Gasoline and Special Fuel Subject to Sales Tax - Sales 57. With local taxes, the total sales … For others, reported on Schedule B, each local jurisdiction may generally choose whether to adopt the exemption. The retailer must apply for and obtain a sales tax license and begin collecting Colorado sales tax by the first day of the first month commencing at least 90 days after the retailer’s aggregate Colorado sales in the current year exceed $100,000. The following is a list of statutes, regulations, forms, and guidance pertaining to sales, retail sales, and the sourcing of sales. See FYI Sales 10: Machinery and Machine Tools Used in Manufacturing for information regarding the sales and use tax exemptions. Colorado and makes retail sales of appliances which are delivered into Denver. The rate change list does not contain rates for all locations. Forms, filing instructions, and electronic filing options are available online at Colorado.gov/Tax. A special sales event is an event where retail sales are made by more than three sellers at a location other than their normal business location(s) and that occurs no more than three times in any calendar year. See the Colorado Sales Tax Guide for additional information. If the retailer is delinquent in remitting the tax due, the retailer is not allowed to deduct and retain any service fee. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. However, the Department does not administer and collect sales taxes imposed by certain home-rule cities, which instead administer their own sales taxes. Additionally, otherwise nontaxable services may be subject to sales tax if they are provided as part of a transaction involving the sale of tangible personal property. A retailer may be required to collect tax even if it has no physical presence in Colorado. solicits business on behalf of the retailer. The tax due constitutes a part of the price or charge and, until paid by the purchaser to the retailer, is a debt from the purchaser to the retailer that is legally recoverable in the same manner as other debts. They must collect and remit all state and state-administered local sales taxes applicable to the point of sale for each taxable transaction. Visit the COVID-19 Sales Tax Relief web page for more information and filing instructions. Applicants for a wholesale license must pay a fee $16, prorated depending on the date of issuance. In general, a retail sale is made at the location to which it is sourced in accordance with the following rules: If a sale cannot be sourced using the preceding rules,  section 39-26-104(3)(a), C.R.S., provides additional guidelines for sourcing retail sales based upon the seller’s records, the purchaser’s payment instrument, or the location from which the property was shipped. If, in addition to rendering services, the service enterprise regularly sells tangible personal property to consumers, then the service enterprise is a retailer with respect to such sales and must comply with the licensing, collection, and filing requirements applicable to retailers. A retailer must produce all such books, accounts, invoices, and records upon request from the Department. A licensed organizer must maintain records regarding all taxes remitted to the organizer. The tax applies to any charge paid for the use, possession, or the right to use or possess any room in a hotel, apartment hotel, lodging house, motor hotel, guesthouse, guest ranch, trailer coach, or mobile home and to any space in any camp ground, auto camp, or trailer court and park, under any concession, permit, right of access, license to use, or other agreement, or otherwise. For sales made on or after January 1, 2020, the service fee is equal to 4% of the state sales tax due for the period, but the total amount a retailer is allowed to retain for any filing period is limited to $1,000. Intangible personal property constitutes mere rights of action with no intrinsic value. Purchasers who meet certain qualifications may apply for a direct payment permit. When such estimate and notice of deficiency have been made, the retailer may prepare and file a return for the tax period in question or otherwise protest the notice of deficiency as provided by law. See Department publication, A retailer is required to obtain a sales tax license and collect sales tax on any retail sale of tangible personal property or taxable service made in Colorado if the retailer is “doing business in Colorado,” as defined below. In general, the tax does not apply to sales of services, except for those services specifically taxed by law. See Part 7: Filing and Remittance and the Colorado Retail Sales Tax Return (DR 0100) for additional information. Regardless of the retailer’s filing frequency (monthly, quarterly, or annually), the retailer must file its sales tax return and remit all applicable tax by the 20th day of the month following the close of the tax period. A store coupon is issued by the retailer for a reduction in the sales price when the coupon is presented to the retailer by the customer. The retailer must retain a copy of the completed exemption form. In lieu of verifying a purchaser’s license or certificate through the Department’s online verification system, the seller may inspect a physical copy of the license or certificate for completeness and to ensure that the license or certificate has not expired. If a retailer is engaged in a seasonal business (a business that the retailer does not operate in Colorado during certain months of the year), the retailer may request permission to file returns and remit tax only for the months of the year that the business operates. The following is a list of statutes, regulations, forms, and guidance pertaining to recordkeeping requirements. If the address the retailer checked with the database was incomplete or contained errors, any resulting failure to collect the correct tax will not be considered a result of an error or omission in the database and the retailer will not be relieved of liability. Anyone making sales at a flea market or farmers market in Colorado is a retailer and is subject to sales tax licensing, collection, and filing requirements with respect to each market at which they make sales. Implementation of the simplified sales tax software system will provide a great relief to Colorado taxpayers. A retailer is not required to obtain a license if the retailer is engaged exclusively in the business of selling commodities that are exempt from all otherwise applicable state and state-administered local sales taxes. A retailer is required to remit all state and state-administered local sales tax via electronic funds transfer (EFT) if the retailer’s annual state sales tax liability for the prior calendar year exceeded $75,000. If a retailer ceases to maintain any place of business in Colorado, the retailer may no longer be doing business in Colorado, depending on its other activities within Colorado, as described below in, Retailers with no physical location in Colorado. The Supplemental Instructions for Form DR 0100 and Department publication Colorado Sales/Use Tax Rates (DR 1002), both available online at Colorado.gov/Tax, provide detailed information about state-administered local sales tax exemptions. See Part 1: Retail Sales for rules for determining the location of a sale. The criteria for determining whether a sale takes place within the boundaries of a particular state-administered local taxing jurisdiction are the same as for determining whether a sale takes place in Colorado. If the retailer does not issue a document that sets forth the purchase price, then the retailer must disclose the tax of each item on signage clearly visible to the purchaser. The retailer must immediately notify the Department if the retailer operates its business in any month outside of the previously established period of seasonal operation. If, upon examination of a filed return, the Department determines the correct amount of tax has not been paid, the Department will issue a notice of deficiency to the retailer. See Department publication Sales & Use Tax Topics: Computer Software for additional information. If a retailer does not file a required return, there is no limit on the time for the Department to estimate the tax due and issue a notice of the estimated tax due to the retailer. However, in the case of a mixed transaction, that involves a bundled sale of both tangible personal property and service (whether or not such service is specifically taxed), the entire purchase price may be taxable unless certain conditions exist. Mobile food vendors making food sales in Colorado from pushcarts, motor vehicles, or other mobile facilities are retailers, subject to sales tax licensing, collection, and filing requirements. Over the next few years, the Department of Revenue will be publishing new and improved guidance in the form of general tax guides and supplements on specific tax topics. This list is not, and is not intended to be, an exhaustive list of authorities that govern the tax treatment of every situation. A retailer that makes sales or takes orders at special events located in Colorado is deemed to maintain a place of business in Colorado at the location of the special event for the duration of the special event. However, in the case of a mixed transaction, that involves a bundled sale of both tangible personal property and service (whether or not such service is specifically taxed), the entire purchase price may be taxable unless certain … COLORADO DEPARTMENT OF REVENUE co Colorado Retail Sales Tax Return the FEIN State Zip Date ssN 1 ssN2 Colorado Account (XXXXXXXX-XXXX) Mar* if this is AmaldBi Retum Period Due Date 0021-103 Ci 'LID (2-1 ) I. Failure to remit such taxes to the Department is punishable as provided by law. Any such adjustment will be made effective January 1. Any sale made in Colorado may also be subject to state-administered local sales taxes. The seller’s or organizer’s return and payment must be filed and remitted by the 20th day of the month following the month in which the special event began. direct representatives, indirect representatives, or manufacturers' agents; distribution of catalogues or other advertising; use of the newspaper, radio, or television advertising media. The amount of tax must be separately stated as a dollar amount. However, in the case of a mixed transaction, that involves a bundled sale of both tangible personal property and service (whether or not such service is specifically taxed), the entire purchase price may be taxable unless certain conditions exist.