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Sales Tax -- Quick Answers
Amending a return
If you make an overpayment of sales tax due or have a credit resulting from a mistake, error or canceled sale, credit for the amount of overpayment may be taken on a subsequent sales tax form.
If you underreport, a separate form for the same period must be filed. If you are filing an amended return you are required to check the amended return box. The amended return must show
tax columns as corrected, not merely the difference(s). The amended return will replace the original return in its entirety. Be sure to use the correct service fee rate for the period you are amending.
If you are no longer engaged in business and you have an overpayment or made a mistake on a prior return, you should apply for a refund using the
Claim for Refund (DR 0137)
Buying or selling a business
As the buyer of a business that sells goods, you must
Obtain a sales tax license.
Pay sales tax with the
Retail Sales Tax Return For Occasional Sales (DR 0100A)
on the tangible personal property included in the purchase of the business by the 20th day of the month following the sale.
If you are buying a business, you may request a “Tax Status Letter” from the Department of Revenue. The letter indicates the department’s current information regarding where the business stands with tax payments and tax delinquencies. Complete a Request for a
"Tax Status Letter" (DR 0096)
. The fee is $7 per tax. The seller of the business may request the letter for the buyer or the buyer may request the letter with a power of attorney from the seller.
If you are selling a business, you must
Pay all business taxes due at the time of the sale.
Pay sales tax collected on the sale of tangible property.
Deductions and Exemptions
Sales Tax | File, Deductions and Exemptions
Delivery and freight charges
Delivery and freight charges are generally not taxable so long as the charges are both separable from the purchase and separately stated on the customer invoice. The charges are considered separable from the purchase if they are for service performed after the property is offered for sale and the seller allows the buyer to use the seller's transportation service or to use alternative transportation service, including but not limited to the buyer picking up or taking the property from the seller's location.
Taxable delivery and freight charges related to tax exempt sales (tax exempt item, sale to tax exempt charity, shipping out of state, etc.) are not subject to sales tax because the delivery charges are considered part of the exempt sales.
Internet purchase – no sales tax collected
Shoppers who make purchases online should remember to check receipts for sales tax charges and save those receipts where tax was not paid so they can pay consumer use tax.
When the seller doesn't collect sales tax on a taxable item purchased from the Internet or mail order catalog, such as clothing, electronics, appliances or other tangible property, it is the purchaser's responsibility to report and pay use tax. Consumers should also be aware that some local special districts in Colorado have use tax.
The Colorado Department of Revenue makes it easy to pay consumer use tax through its
service. Click on "File a Return" located under the "Quick Links" button then click on "Consumer Use Tax."
Use Tax | File
Generally, labor and services are not subject to sales tax. Colorado taxes retail sales of tangible personal property and select services including telephone services, rooms and accommodations, food for immediate consumption, and certain utility services. Labor and service charges that are separable from the property being sold and that are separately stated on an invoice are not subject to state sales tax.
If the items of tangible property and the labor and service charges are lumped into one purchase price, the entire transaction is subject to sales tax.
Local government taxes
imposes the city sales tax based on rules established by the State of Colorado. The Colorado Department of Revenue is responsible for collecting and administering local sales taxes for all statutory cities that impose a sales tax. Sales taxes collected by vendors in such areas are to be reported on the
Retail Sales Tax Return (DR 0100)
and remitted to the Colorado Department of Revenue.
home rule city
administers its own city sales tax and the laws regarding sales tax may vary from those established by the State of Colorado. City taxes collected for such areas must be remitted directly to the city. The Colorado Department of Revenue has no jurisdiction over sales and use taxes imposed by self-collected home rule cities. To determine if a city tax is self-collected please see the DR 1002 Sales/Use Tax Rates guide.
Colorado state use tax is the same rate as sales tax. With proof of payment, sales tax paid to another state may be credited against state use tax due in Colorado for a particular item. Cities and counties self-collect their use tax. Special district use taxes are collected by the State. Please see the DR 1002 Sales/Use Tax Rates guide to determine if local governments impose a use tax and the use tax rates.
For more information see
Colorado Sales/Use Tax Rates (DR 1002)
No tax to report
A return should be timely filed for each filing period even if no sales tax or wage withholding tax is due. This will keep your account in good standing and active with the Department of Revenue.
If there is no tax to report, you can file a zero return through our
service. When filing a zero return through Revenue Online you will first need to request a Letter ID number to be mailed to the address we have on your account. Then use the Letter ID number in the sign up process. If you have a recent return that has an amount (not zero) in the Gross Sales and service line, you may use that amount instead of a Letter ID number.
Enter Gross Sales on line 1.
Subtract these sales on line 2a and 2b, if applicable.
Enter 0 (zero) on all applicable columns.
If you have no sales, enter 0 (zero) on line 1.
If you cannot use Revenue Online, file the information for the zero return on the
"Retail Sales Tax Return" (DR 0100)
Wage Withholding Tax:
If you have a wage withholding account and there is no tax to report and you have a filing status of frequent, monthly, quarterly or seasonal you can file the return online through our
service. When filing a zero return through Revenue Online you will first need to request a Letter ID number to be mailed to the address we have on your account. If you are not able to file online, you can file by paper using the
"Wage Withholding Tax Return" (DR 1094)
After 12 months of consecutive filing of zero returns, you will receive a letter notifying you that your account should be renewed or the sales tax account portion of your Department of Revenue account will be closed.
Overpaid sales tax - Refund
If you were overcharged for sales or use tax on a purchase or were charged sales or use tax on an item that is exempt from tax, you should ask the retailer to refund the tax paid in error. If they do not give you a refund, you can apply to the Department of Revenue for the refund by completing and filing, the
Claim for Refund of Tax Paid to Vendors (DR 0137B)
. This form can be used for state sales tax and city, county or special district sales taxes collected by the state. You must attach a copy of your receipt or invoice as proof of the tax paid in error.
If you overpaid sales or use tax on a tax return you filed, you may deduct the overpayment on your next return. If you cannot deduct the overpayment on your next tax return, use the
Claim for Refund (DR 0137)
, for previously remitted directly to the Department of Revenue.
For more detailed instructions, see publication
FYI Sales 90, Sales and Use Tax Refund Requirements
To make a claim for sales taxes paid in Home Rule cities, you must contact the city to obtain refund information. Contact telephone numbers for Home Rule cities are listed in the
Colorado Sales/Use Tax Rates (DR 1002)
Point of purchase/delivery
A taxable sale occurs where there is a transfer of title or possession. For many sales, transfers of title and possession occur at the same point in time and place. The most common example is where the purchaser pays for and takes merchandise with them in an over-the-counter transaction. Title and possession were transferred at the store, and the sales tax is due at the time of sale at the rate in effect for the store's location.
If the merchandise is paid for at the store, but the seller as a condition of the sale is required to deliver the merchandise to another destination, tax is due for each jurisdiction that is in common between the seller and the delivery point. The tax rate charged will be the tax due at the point of destination. In other words, delivery by the seller was a condition of the sale, meaning that title did not pass until the property was delivered.
Whether a mail order sale is subject to sales tax depends upon whether the seller is doing business in Colorado and where title and possession pass.
Local city and county sales taxes are not collected when the retailer or his agent delivers tangible personal property, via the retailer’s vehicle, to a destination outside the boundaries of the vendor’s local taxing jurisdiction(s) or to a common carrier for delivery outside the boundaries of the vendor’s local taxing area(s). Delivery of the tangible personal property into another local taxing area does not require the vendor to collect the local sales taxes of the delivery area if the vendor does not have a business presence there. However, use taxes are due for deliveries made into special districts that impose a use tax. The use tax should be reported on the
Retailers Use Tax Return (DR 0173)
Sales/Use Tax Rates (DR 1002)
to determine which special districts have a use tax.
Sign up for revenue online account access
In order to file a sales tax return through Revenue Online you must either request a Letter ID number or use the Gross Sales and Services amount (cannot be zero) from a recent return. Letter IDs will be mailed to the current address we have on file.
To get a Letter ID:
Under "Additional Services" click on "Request Letter ID."
Follow the prompts
It will take about 5 business days to receive the Letter ID
If your mailing address has changed contact our Customer Support Center 303-238-7378 to have the address updated.
Once you receive the Letter ID in the mail you can set up an account and file your return through Revenue Online.
Setting up an account
Under "Sign up" click on Create a Login ID.
Follow the Prompts
Click on the drop-down box and choose the Account Type (example, Sales Tax or Wage Withholding) you want to access
Select ID Type
Click on the drop-down box and choose an ID number (it is best to use your Colorado Account Number)
The CO Account # is an 8-digit number. This is your original 7-digit number with a zero in front of the account number
Enter Email Address
Confirm Email Address
Contact Phone (optional)
Log in Information
You can click on the box "Use Email As Login ID" or enter a different Login ID
Secret Question (click on drop down box and choose a question)
Enter Account Information
Enter Zip Code. Use the 5-digit code. The 9-digit Zip plus-four code is not necessary. This is the Zip Code we have on file for your account. If you your address has changed, you must contact our Customer Support Center 303-238-7378 to have the address updated so that you may use Revenue Online.
Colorado Account Number including Branch ID (12 digits). Your 12-digit account number would be your 8-digit account number plus 4 zeroes for the branch.
Select one of the following (next to this wording you will see a down arrow, click on the arrow and select Recent Letter ID number.)
Enter Recent Letter ID number received in the mail.
You should receive an email where the Subject line will say:
Colorado Department of Revenue - Revenue Online Account Access Complete.
The email will contain an Authorization Code that you will use ONLY the first time you Login. If you don't get access, try again and verify your Account information. If you don't see the email, check your Junk email folder and allow email from the Colorado Department of Revenue.
Once you have your Authorization Code return to
via the link in your email.
Enter the Login ID and Password you created.
Click on the
Enter the Authorization Code from you email (first time only).
. You should then be in your account.
After your first Login, you will need only the Login ID and Password that you created.
Once you Login, you will be in your tax account. Click on the blue link that shows your Colorado Account Number. You can then begin to manage your tax account and file your returns.
A complete list of city, county, and special district tax rates is available through
. Look under "Additional Services" and click on "View Sales Tax Rates and Taxes."
The Department of Revenue does not collect tax for home-rule cities and counties. If you have a business inside a home-rule area, please contact that city/county directly for their sales tax requirements. To determine if you are located in a home-rule area and for contact information please see the publication
Colorado Sales/Use Tax Rates (DR 1002)
Verify sales tax license/tax exempt certificate
The Department of Revenue offers a 24-hour, automated service for those wanting to verify a Colorado sales tax license or sales tax exemption certificate for a specific business or organization. You can determine whether the license of exemption certificate is valid through
Under "Additional Services", choose Verify a Sales Tax License. You must know the sales tax account number or exemption certificate number as assigned by the Department of Revenue. You are not required to be logged in to use this service.