Use Tax for Businesses

What is consumer use tax?

Consumer use tax must be paid by Colorado businesses on purchases (items used for personal or business purposes, not resold) that did not include Colorado sales tax, such as those made over the Internet, by mail order, or by telephone. Consumer use tax is payable to the state by businesses when sales tax is due but has not been collected. Businesses have always been required to pay sales or use tax on taxable purchases from out-of-state vendors if the item is sold, leased, or delivered in Colorado for use, storage, distribution, or consumption in the state.
 
Colorado state use tax is the same rate as the 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. Use tax is also collected by some local governments and special districts.

How do I know if I paid tax on my purchase?

Check your invoice or receipt to see if sales tax was paid. Some online purchases will have sales or use tax included. Many online or out-of-state retailers do not collect sales or use tax from customers on purchases.

Special District Areas

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. 

How to Report and Pay Consumer Use Tax for Businesses

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 or other legal entity accrues less than $300 of total consumer use tax over the course of a year, the business or other legal entity must file an annual use tax return, due January 20th of the following year, to report and pay the tax due. 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.

Ways to File Consumer Use Tax

  • E-filing with Revenue Online
  • Filing 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 more information about state and special district taxes please see the Colorado Sales/Use Tax Rates (DR 1002).
    • Forms and payment by check may be mailed to: 
      Colorado Department of Revenue
      Denver, CO 80261-0006
      Please note: This address and zip code are exclusive to the Colorado Department of Revenue, so a street address is not required.

Non-Collecting Retailers

Non-collecting retailers are encouraged to review Department rule 39-21-112(3.5) regarding notice and reporting requirements.  Click here to download the sample file layout for the annual customer information report.  The report can be submitted via the Revenue Online system under the "Additional Services" section.

Amending

See form instructions. You must use the paper consumer use tax return to amend an original return.