Colorado Taxation Requirements
Sales taxes are imposed upon the selling transaction of most goods in the state of Colorado. Goods exempt by law include, but are not limited to, prescription drugs, insulin and insulin supplies and prosthetic and medical supplies prescribed by a doctor. Learn more about what items are exempt from sales tax.
Specific Tax Information
- Building materials: Local sales tax is not due on building materials if the purchaser presents a building permit or other documentation acceptable to the local jurisdiction where the materials are purchased showing that a local use tax has been paid or is required to be paid to another local entity.
- Deliveries of goods: Local sales tax and RTD / Special District taxes are not collected when the retailer or their agent delivers the sold goods via the retailer's company vehicle to a location outside the boundaries of the vendor's local taxing jurisdiction or to a common carrier for delivery outside the boundaries of the vendor's local taxing jurisdiction. Delivery of the sold goods into another taxing jurisdiction does not require the vendor to collect the local sales taxes of the delivery location if the vendor does not have a business presence there. (A business presence includes an office, distributing house, salesroom, warehouse or other place of business, or if the business leases vehicles that will be used in Colorado.) Records detailing the delivery location must be maintained by the vendor. As a rule of thumb, vendors should charge what they have in common with their purchaser.
- Mobile vendors: Retailers who carry their inventory with them and make sales from that inventory directly to customers are classified as mobile vendors, and all local taxes must be collected.
- Out-of-state retailers: If you file Colorado state sales / use tax returns you are not required to collect sales taxes for any state-collected city or county, provided the retailer has no place of business in such state-collected city or county.
- Services: Most services are not subject to sales tax. Exceptions to this guideline include: rooms and accommodations, catering, gas and electric service, steam and telephone and telegraph services. Freight delivery and transportation charges are taxable to the point that title of delivered goods passes from the seller. Dealer preparation and handling charges for motor vehicles are taxable. Services must be itemized separately on the service provider's bill to show that they are nontaxable.