This blog was last updated on November 19, 2025

What is Colorado Sales Tax?

Colorado imposes a statewide sales and use tax rate of 2.9%.

Examples of taxable items include:

• Clothing
• Certain computer software
• Rentals of tangible personal property
• Non-prescription drugs
• Prepared food

Colorado Sales Tax Rates by Location

Like many states, localities in Colorado can impose taxes which may vary in application and rate.

Colorado Sales Tax Exemptions

Colorado sales and use tax applies to the sale of tangible personal property, and services are generally exempt. Examples of exempt products and services include:

• Most services (unless Colorado statutes specify otherwise)
• Certain food products
• Qualifying agricultural items
• Select precious metal bullion
• Incontinence products
• Feminine hygiene products

Additionally, Colorado exempts sales to certain entities from the sales/use tax, including the following:

• Qualified nonprofit entities
• Certain wholesalers
• Retailers selling for resale
• Schools
• Governments
• Sales to Native Americans

Collecting Sales Tax in Colorado

A seller is liable to collect and remit Colorado sales tax if they meet the state’s nexus requirements. Nexus can be established through either physical or economic presence. Physical presence is created by having a business location, office, warehouse, vehicle, employee, or other representative operating in the state of Colorado.

Colorado enforces economic nexus for remote sellers. If your business has:

• Over $100,000 in sales in Colorado during the current calendar year; you may be required to register for and collect sales tax.

Filing & Compliance

Colorado offers multiple methods for filing and remitting sales and use tax:

• E-filing through Revenue Online
  • XML upload through an approved software provider like Sovos
  • Excel Spreadsheet upload
  • Manual data entry
• Paper filing:
  • Form DR-0100
  • Form DR-0173 (use tax)

Businesses with more than $75,000 annual liability in Colorado are required to pay sales tax online by Electronic Funds Transfer on a monthly basis.

How Do I Register for a Colorado Sales Tax Permit?

Businesses or individuals selling tangible personal property or certain services to Colorado consumers may need to register to collect sales tax when meeting qualifying requirements.  To register, submit a completed CR-0100 application form to the Colorado Department of Revenue. The license permits sellers to collect state administered sales and use taxes.  Additional registration may be required at the local level if your business has substantial connection to a home-rule city that imposes a sales and use tax.

 Colorado Sales Tax Tips for Businesses

Colorado created the Sales and Use Tax System (SUTS) in 2017, providing a statewide local filing portal, sales tax lookup tool and a robust tax matrix. The system is currently available for businesses with retail sales of over $100,000 per year and has around 50 participating locals. Given the number of home-rule cities in Colorado, each with their own sales tax return and filing requirements, this is an incredibly helpful tool.

Conclusion

Staying compliant with Colorado’s complex sales tax rules requires careful attention to state and local regulations. From understanding exemptions to meeting nexus thresholds and filing requirements, businesses must stay proactive to avoid costly mistakes.

FAQ

How is Colorado sales tax calculated?

Colorado state sales tax is calculated on the full purchase price.

Who needs to collect Colorado sales tax?

Any retailer making sales in Colorado must collect the applicable state sales taxes.

What items are exempt from Colorado sales tax?

Most services are exempt from Colorado sales tax. Some food products, agricultural items, metal bullions and feminine hygiene products are also exempt.

When are Colorado sales tax returns due?

Filing frequency is determined by the amount of sales tax collected monthly.

• $15 or less per month: Sales tax returns may be filed annually. Annual returns are due January 20.
• Under $600 per month: Sales tax returns may be filed quarterly.
  • Due dates:
    • January – March: due April 20
    • April – June: due July 20
    • July – September: due October 20
    • October – December: due January 20
  • $600 or more per month: sales tax returns must be filed monthly. Monthly returns are due the 20th day of month following reporting period.
  • Businesses that pay more than $75,000 per year in state sales tax must pay by Electronic Funds Transfer (EFT). EFT is due the 20th day of month following reporting period.
  • Wholesale businesses with a sales tax liability of $180 per year or less can file annually.

Can I file Colorado sales tax returns online?

Businesses have the option to utilize Revenue Online to file sales tax returns online.

What is the penalty for late Colorado sales tax payments?

The penalty for late Colorado sales tax payments is the greater of $15 or 10% of the fee due plus 0.5% for each month the fee remains unpaid not to exceed a total of 18%.