The 10 Basics Every Colorado Business Should Know About Sales Tax
What is the Sales Tax Rate in Colorado?
The state sales tax rate in Colorado is 2.9%. Cities and/or municipalities are allowed to collect their own rate that can add up to 7% to the state rate.
What is Sales Tax in Colorado?
Sales tax in Colorado include physical property and certain services.
Are All Goods and Services Taxable?
How Do I Know What’s Taxable and What’s Not?
This link can help you determine what is taxable and what isn’t in Colorado.
Who Pays Sales Tax?
Consumers pay sales tax. Merchants do not pay sales tax out of their own pockets. It’s commonly referred to as a pass through tax.
What Am I Responsible For?
You are required to collect sales tax, hold it secure and send it to the State on-time and in-full.
When Is My Sales Tax Payment Due in Colorado?
Colorado Retail Sales Tax Return is due the 20th day of the month following the end of the taxpayer’s filing period. Filing frequency is determined by the amount of monthly sales tax collected. Click here for a list of due dates.
How Do I Know How Much Sales Tax to Charge?
Sales tax rates in Colorado are a combination of the State and City / Municipality taxes. Find more information here. The final and definitive answer is always the sales tax rate posted on the State Department of Revenue website. Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.
Who Gets the Sales Tax Money?
Some cities in CO require payment to the city. So not all money goes to the state like other states. This is called Home Rule and there are several states like this.
How Do I Manage Tax Exempt Sales?
Tax exempt organizations such as schools and religious organizations are often exempt from sales tax. They are required to give you copy of their “TAX EXEMPT CERTIFICATE” at the time of the sale and you are required to keep this certificate on file. Failing to do so may result in you paying the sales tax out of your own pocket if you have a sales tax audit.
What if I Forget to Pay or Spend the Money and Can’t Pay?
Colorado has severe penalties for missing tax payments. You can find the penalties for late payments here. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt. In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.
Colorado Sales and Use TAX HELP:
Colorado Department of Revenue