Consumer Use Tax for Businesses
Consumer use tax must be paid by Colorado businesses (as well as individuals) for purchases that did not include Colorado sales tax or when inventory acquired at wholesale is used by the business, instead of being sold to customers. The state consumer use tax rate is the same as the sales tax rate: 2.9%. With proof of payment, sales tax paid to another state may be credited against consumer use tax due in Colorado for a particular item. Use tax is also collected by some local governments and special districts.
More than half of Colorado residents live in one or more special districts. Most residents of the Denver metropolitan area are within the district boundaries of both the Regional Transportation District (RTD) and the Scientific & Cultural Facilities District (CD). Reference publication DR 1002, contact your county assessor’s office, or view district maps for additional information to determine whether you live within the boundaries of a special district.
Report & Pay Consumer Use Tax
The due date for businesses and other legal entities that owe consumer use tax depends upon the amount of use tax owed. If the business has less than $300 of total consumer use tax over the course of a year, then the business must file an annual use tax return. It is due by January 20th of the following year. If the cumulative tax due at the end of any month is in excess of $300, the business or legal entity must file a return by the 20th day of the following month.
Consumer use tax returns can be filed using the following methods:
- E-File with Revenue Online
- File by Paper: If filing by paper, the state and special district use taxes are filed using the Consumer Use Tax Return (DR 0252). The Rural Transportation Authority use tax is filed with the RTA Consumer Use Tax Return (DR 0251). For information about state and special district tax rates, see the Colorado Sales/Use Tax Rates (DR 1002). These forms can be found on the Sales & Use Tax Forms web page.
Non-collecting retailers are encouraged to review Department rule 39-21-112(3.5) regarding notice and reporting requirements. The annual customer information report can be submitted via the Revenue Online system under the "Additional Services" section.