Colorado — Sales & Use Tax

Colorado imposes state sales tax on retail sales of tangible personal property and on four specifically enumerated categories of services. The four enumerated taxable services are: rooms and accommodations, gas and electric service, steam, and telephone and telegraph service. Wholesale sales are exempt from sales tax.

Colorado does not impose state sales tax on services generally; the purchase of most personal services—such as professional services, repair services, data processing services, and other service transactions—is not subject to Colorado sales tax unless the service falls within one of the four enumerated categories above. Prepared food and drink sold by restaurants, bars, and similar establishments is also subject to Colorado sales tax, though it is classified as tangible personal property rather than as a service.

The tax is imposed under C.R.S. § 39-26-104. The statute levies sales tax "upon the sale or purchase of any article of tangible personal property at retail" and on the specifically enumerated services. Regulation 26-102.9 (1 CCR 201-4) clarifies that "'Retail sale' includes all sales of tangible personal property and the sales of those services specifically enumerated in the Act as rooms and accommodations, gas and electric service, steam, and telephone and telegraph service."

Home-rule city taxes. Many Colorado home-rule cities impose local sales taxes with different bases and may tax services not subject to state sales tax. The four-category enumeration applies only to state sales tax; practitioners advising multistate sellers should confirm the taxable base for each self-collected home-rule jurisdiction separately.

Source: C.R.S. § 39-26-104 | Regulation 26-102.9, 1 CCR 201-4

Colorado imposes a state sales tax at the rate of 2.9 percent on all retail sales of tangible personal property and specified services. This rate has been in effect since January 1, 2001, when it was reduced from the previous 3 percent rate. The tax is imposed under C.R.S. § 39-26-106.

The 2.9 percent state rate applies uniformly across Colorado. However, local jurisdictions (cities, counties, and special districts) may impose additional sales taxes on top of the state rate, resulting in combined rates that vary significantly by location. The state rate applies only to transactions subject to Colorado sales tax; exempt sales are not subject to the 2.9 percent state levy.

Source: Colorado Sales Tax Guide, Colorado Department of Revenue

Colorado requires remote sellers without physical presence to collect sales tax if they exceed $100,000 in retail sales into Colorado during the current or previous calendar year. The threshold is sales-based only; Colorado does not impose a transaction-count requirement. Sales are measured on a calendar-year basis.

Sales included in the threshold. The threshold applies to all retail sales, including both taxable and exempt sales. However, the calculation differs depending on whether the seller is a marketplace facilitator or a marketplace seller.

Marketplace facilitators must include all sales they make directly, plus all sales made by marketplace sellers in and through their marketplace, when determining whether the $100,000 threshold is met. This aggregation rule means a marketplace facilitator's economic-nexus calculation includes sales it facilitates on behalf of third-party sellers.

Marketplace sellers must exclude any sales made in or through a marketplace facilitator's marketplace when calculating whether they meet the $100,000 threshold. This exclusion is critical: a seller who makes $80,000 in direct sales and $150,000 in sales through Amazon's marketplace counts only the $80,000 toward the threshold and does not have economic nexus. The exclusion ensures that marketplace sellers are not subject to duplicative collection obligations for sales already subject to tax collection by the marketplace facilitator.

Multichannel sellers — those who sell both through a marketplace and directly — must apply both rules: they include their direct sales but exclude their marketplace-facilitated sales when determining whether the threshold is met. If a multichannel seller exceeds the threshold based on direct sales alone, it must collect tax on those direct sales; the marketplace facilitator remains responsible for tax on marketplace-facilitated sales.

The aggregation and exclusion rules took effect October 1, 2019, concurrent with Colorado's marketplace facilitator collection duty.

Source: C.R.S. § 39-26-102(3)(c)

Colorado imposes use tax at 2.9 percent on the storage, use, or consumption of tangible personal property purchased at retail when sales tax was not collected at the time of purchase. Use tax is due when a taxpayer stores, uses, or consumes taxable property in Colorado without having paid all applicable sales or use taxes at acquisition, most commonly when purchasing from an out-of-state seller who does not collect Colorado sales tax. The use tax rate mirrors the state sales tax rate.

Source: C.R.S. § 39-26-202 | Consumer Use Tax Guide, Colorado Department of Revenue

Colorado requires marketplace facilitators to collect and remit state sales tax on taxable sales made through their marketplace, including sales by third-party marketplace sellers, effective October 1, 2019. A marketplace facilitator is a person who (1) contracts with sellers to facilitate sales for consideration, (2) transmits offers or acceptances between buyers and sellers, and (3) collects payment from purchasers and transmits it to sellers. Entities that exclusively provide advertising or product listings without meeting all three prongs are not marketplace facilitators.

Marketplace sellers do not have collection obligations for sales made through a facilitator's marketplace; the facilitator bears all retailer rights and liabilities for those transactions. Multichannel sellers—those who sell both through a marketplace and directly—must still collect tax on their direct sales.

Source: C.R.S. § 39-26-102(5.9), (6), (6.2) | Marketplace Facilitators, Colorado Department of Revenue

Colorado municipalities that adopt a home-rule charter under Article XX, Section 6 of the Colorado Constitution may administer their own local sales and use taxes independently of the state. Cities with populations of at least 2,000 are constitutionally authorized to adopt charters that serve as their "organic law" and "extend to all...local and municipal matters," and such charters and ordinances "shall supersede within the territorial limits...of said city or town any law of the state in conflict therewith."

Approximately 100 Colorado cities have adopted home-rule charters; as of January 2026, roughly 70 of these self-collect and administer their own sales taxes rather than participating in state administration. Self-collected home-rule cities have independent authority to establish their own sales tax rates, define their own tax bases (which may differ from the state's), create their own exemptions, set their own filing frequencies and due dates, and enforce their own collection requirements. A sale made in Denver, for example, is subject to the 2.9% state rate plus Denver's separately administered home-rule tax; the seller must register with and file returns to both the Colorado Department of Revenue and the City and County of Denver.

The remaining home-rule cities have elected to allow the Colorado Department of Revenue to administer their local sales taxes on their behalf; these are treated as "state-collected" jurisdictions and are reported on the same return as state sales tax. The Department of Revenue publishes DR 1002, Colorado Sales/Use Tax Rates, twice annually (effective each January 1 and July 1), listing all home-rule cities and indicating whether each is self-collected or state-collected.

Compliance impact for remote sellers and marketplace facilitators. A retailer with economic nexus in Colorado and sales in multiple self-collected home-rule cities must register separately with each such city, collect tax at each city's independently determined rate and base, file separate returns on each city's schedule, and remit to each city directly. Many self-collected home-rule cities have adopted economic-nexus ordinances modeled on the Colorado Municipal League's template, mirroring the state's $100,000 threshold but applying it to sales into that city rather than statewide sales. The lack of a single point of registration and filing across home-rule cities significantly increases compliance burden compared to states with unified local tax administration.

Since 2020, Colorado has operated the Sales and Use Tax System (SUTS), a centralized online portal through which retailers may file and remit for state sales tax, state-administered local taxes, and participating self-collected home-rule cities in a single session. As of 2026, approximately 54 home-rule cities participate in SUTS, though participation is voluntary and several prominent home-rule jurisdictions (including Aspen and Telluride) have not joined. SUTS does not eliminate separate registration or separate return preparation; it provides a common filing interface but each jurisdiction's return, rate, base, and exemptions remain distinct.

Home-rule cities may also impose fees not listed in DR 1002, such as Public Improvement Fees (PIFs) and Retail Sales Fees (RSFs), which function similarly to sales taxes but are separately authorized under municipal charter provisions. Retailers selling into self-collected home-rule cities should contact each city's tax office directly to confirm current rates, exemptions, taxable bases, registration requirements, and any fees not published in state materials.

Source: Colo. Const. art. XX, § 6 | Local Government Sales Tax, Colorado Department of Revenue | DR 1002 – Colorado Sales/Use Tax Rates Publication, Colorado Department of Revenue

Colorado imposes a retail delivery fee on each retail sale of tangible personal property subject to state sales or use tax when the sale includes delivery by motor vehicle to a location in Colorado. The fee is imposed per retail sale, not per item or shipment; a single retail sale counts as one retail delivery regardless of how many shipments are necessary to deliver the purchased items. The retailer or marketplace facilitator that collects the sales or use tax on the sale is responsible for collecting and remitting the retail delivery fee.

Fee amount and inflation adjustment. The retail delivery fee is $0.28 per retail delivery for deliveries made from July 1, 2025, through June 30, 2026. The fee was $0.29 per delivery for the period July 1, 2024, through June 30, 2025, and $0.28 for July 1, 2023, through June 30, 2024. The Department of Revenue is required to adjust the fee amount annually for inflation, with adjustments effective each July 1, and must publish the new rate by April 15 of the calendar year in which the state fiscal year begins. The fee may only be increased if cumulative inflation from the last adjustment, when applied to the combined total of the retail delivery fee and all enterprise retail delivery fees and rounded to the nearest whole cent, results in an increase of at least one whole cent. The cumulative inflation applied is capped at the lesser of actual cumulative inflation or five percent.

Covered deliveries. A delivery is subject to the fee if it involves delivery by motor vehicle at any point between order acceptance and final delivery to the purchaser's specified location. "Motor vehicle" is defined as any self-propelled vehicle designed primarily for travel on public highways and generally and commonly used to transport people and property, including low-speed electric vehicles and autocycles. The fee applies whether the motor vehicle is operated by the retailer or by a third party, such as a shipping company or the U.S. Postal Service. Over-the-counter sales (where the customer takes possession at the point of sale with no post-order delivery) are not subject to the fee.

Qualified-business exemption. Retail deliveries by a qualified business are exempt from the retail delivery fee. A qualified business is a business whose retail sales of tangible personal property, commodities, or services in Colorado in the previous calendar year totaled $500,000 or less. A business with no Colorado retail sales in the previous calendar year is also a qualified business; for such a business, the exemption applies until the first day of the filing period that begins at least 90 days after its cumulative Colorado retail sales in the current year exceed $500,000. The exemption applies retroactively to July 1, 2022, when the fee was first imposed. However, a qualified business that collected the fee from customers must still remit the collected amounts to the Department of Revenue.

Collection and retailer election. The retailer must either (1) collect the fee from the purchaser, separately state it on the invoice or receipt as "Retail Delivery Fee" distinct from the sales price and other charges, and remit the collected amount, or (2) pay the fee on behalf of the purchaser without separately collecting or itemizing it. If the retailer elects to pay the fee on behalf of the purchaser, the purchaser has no liability for the fee and is not entitled to a refund if the fee was erroneously imposed. Retailers file the fee on form DR 1786 on the same schedule as their sales tax return—generally monthly, due on or before the 20th of the month following the reporting period.

Relationship to sales tax nexus. A retailer who is not "doing business in this state" under C.R.S. § 39-26-102(3) (the sales tax nexus standard) is not obligated to collect and remit the retail delivery fee. A retailer's obligation to collect the retail delivery fee begins on the same date as the retailer's obligation to collect state sales tax. However, a seller required to collect sales tax is not necessarily required to collect the retail delivery fee; the fee applies only to deliveries by motor vehicle, and certain sales (e.g., lump-sum contractor transactions, sales of exempt tangible personal property, deliveries made entirely without motor-vehicle involvement) are not subject to the fee even if sales tax applies.

Enterprise fees. In addition to the $0.28 state retail delivery fee, the statute simultaneously imposes several enterprise retail delivery fees: a community access retail delivery fee (C.R.S. § 24-38.5-303(7)), a clean fleet retail delivery fee (C.R.S. § 25-7.5-103(8)), a bridge and tunnel retail delivery fee (C.R.S. § 43-4-805(5)(g.7)), a clean transit retail delivery fee (C.R.S. § 43-4-1203(7)), and an air pollution mitigation retail delivery fee (C.R.S. § 43-4-1303(8)). These enterprise fees are administered together with the state retail delivery fee; the total fee amount displayed to the purchaser is the sum of all six fees, shown as a single line item labeled "Retail Delivery Fee." The $0.28 figure above is the state portion only; the combined total of all six fees is the amount listed in the periodic rate table published by the Department of Revenue.

The retail delivery fee and all enterprise fees took effect on July 1, 2022, pursuant to Senate Bill 21-260, enacted in 2021. Senate Bill 23-143, enacted in 2023, added the qualified-business exemption retroactive to July 1, 2022, and authorized retailers to elect to pay the fee on behalf of purchasers.

Source: C.R.S. § 43-4-218 | Retail Delivery Fee, Colorado Department of Revenue | DR 1786, Retail Delivery Fee Return

Colorado sales tax returns and payments are due on the 20th day of the month following the close of the tax period. If the 20th falls on a Saturday, Sunday, or legal holiday, the due date extends to the next business day. For example, a monthly return for January activity is due February 20; a quarterly return for the period January through March is due April 20. Retailers must file a return for every assigned filing period, even if no sales were made and no tax was collected; failure to file results in the Department estimating the tax due and billing the retailer.

Filing frequency assignment — general rule. The Department of Revenue assigns each retailer a filing frequency based on the retailer's average monthly sales tax collection. The default assignment thresholds are:

• Monthly filing is required when the retailer's average monthly sales tax collection is $300 or more.
• Quarterly filing is permitted when the retailer's average monthly sales tax collection is less than $300 but more than $15.
• Annual filing may be approved when the retailer's average monthly sales tax collection is $15 or less and filing on a monthly or quarterly basis would impose unnecessary hardship. The retailer must request annual filing by checking the appropriate box on the initial sales tax application or by submitting a written request to the Department.

The Department calculates each retailer's average monthly sales tax collection on an annual basis and adjusts filing schedules as necessary, effective each January 1. The Department automatically increases filing frequency (from annual to quarterly, or from quarterly to monthly) when the average monthly collection crosses the applicable threshold, but does not automatically decrease frequency; a retailer whose collections decline may request a lower frequency by submitting a written request. The Department will not approve a quarterly schedule if the retailer's average monthly collection exceeds $300, and will not approve an annual schedule if the average exceeds $15. The Department may revoke quarterly or annual filing approval and require monthly filing if the retailer becomes delinquent in filing returns or remitting tax.

Alternate filing schedules. A retailer may request an alternate filing schedule—such as a seasonal schedule (filing only for months the business operates in Colorado) or a schedule consistent with the retailer's fiscal accounting periods (e.g., thirteen four-week periods)—by submitting a written request. The Department will grant such requests only if the alternate schedule will not jeopardize the collection of tax.

Wholesalers. Wholesalers that make no retail sales must file returns on an annual basis to report their gross sales and allowable subtractions. Wholesalers that make retail sales in addition to wholesale sales are subject to the general filing-frequency rules (monthly, quarterly, or annual, as applicable) unless the Department grants permission to file less frequently. A special rule allows wholesale businesses with a sales tax liability of $180 per year or less to file annually.

Electronic funds transfer (EFT) requirement. Businesses that pay more than $75,000 per year in state sales tax must remit by electronic funds transfer. EFT payments are due on the same schedule as the return—the 20th day of the month following the reporting period.

Home-rule cities. Self-collected home-rule cities administer their own sales taxes independently and set their own filing frequencies and due dates, which may differ from the state schedule. Retailers selling into self-collected home-rule jurisdictions must confirm each city's filing requirements separately. Many home-rule cities have adopted schedules similar to the state's, but the retailer should not assume uniformity.

Source: 1 CCR 201-4, Rule 39-26-109 | Colorado Sales Tax Filing Information, Colorado Department of Revenue