Colorado can be relatively difficult for eCommerce businesses when it comes to complying with sales and use tax regulations. This struggle is due to the fact that Colorado is a Home Rule state. For those of you who may not know, a home-rule city has its own sales tax rates and laws, which can often differ from those established by the state. Home-rule cities administer and collect their own city sales tax, and the state has no jurisdiction over sales and use taxes pressed by these cities. City taxes collected for such areas must be remitted directly to the home rule city. Dissimilar to home rule cities, a statutory city imposes sales tax based on state rules. Home-rule cities should be contacted directly for their tax laws and regulations. Home-rule cities may also require a license if you have nexus in their jurisdiction. For information on which cities are home-rule and how to contact them, go to “Sales/Use Tax Rates” (DR 1002).
We realize this is a lot of information for you to take in, but do not get discouraged because we have helped simplify the process for you! The following guide will walk you through everything you need to know about registering for a sales tax permit in the state of Colorado. Have questions? Let us know! We would love to help!
1) Do I have to pay sales tax in Colorado?
- If you have nexus in Colorado, then you are obligated to pay sales tax. Having nexus means you have enough of a presence in the state to pay sales tax. If you have questions about nexus in general or whether or not you owe sales tax, check out this guide!
2) Do I need a sales tax permit in Colorado?
- Tangible personal property is taxable in Colorado, but services are not.
- There are many different sales tax license types:
- Standard Retail License– For businesses with one or more permanent locations in Colorado. This would be the license an eCommerce retailer that has nexus with the state would need to apply for.
- Wholesale License– For businesses that make sales to other licensed vendors for resale.
- Single Special Event License– For:
- 1) businesses that have no permanent place of business but sell goods at fairs, festivals, bazaars, etc.; and
- 2) businesses that meet the requirements for a Standard License, but also sell at other locations, such as fairs and festivals. Flea markets, which are held on a regular basis, are not considered special events.
- This license is for one event only where there are three or more vendors.
- Multiple Special Event License– This is the same as a single special event license, but it is for businesses attending more than one special event. This license covers a two-year period when there are three or more vendors at the event.
- Note: If a Standard Retail License holder wants to participate in a special sales event in Colorado, they must also obtain a special event sales tax license. There is no fee associated with the application if the business has a valid Standard License.
3) How can I make this as painless as possible?
- Have the following information ready:
- Company information (legal name, corporate name, associated addresses, phone number, and trade name),
- Federal Employer ID Number (FEIN),
- Social Security Number (SSN),
- Business type (sole proprietor, corporation, partnership, LLC, LLP etc.),
- Ownership information (name, title, FEIN, SSN, and address),
- Product list (type of products or services sold),
- Filing frequency,
- First date of sales,
- Department of Revenue account number, and
- Event location and dates (for special event licenses).
4) How do I register for the permit?
- For standard retail license and wholesale license, register:
- Online using Colorado Business Express
- This site can be confusing because it is combined with Colorado’s Department of Labor, which administers the state’s Unemployment Insurance. When navigating the Department of Revenue’s site to apply for your license, the site will ask a lot of questions about employees and may incorrectly advise that you are unable to continue with the application until you contact the Department of Labor. For eCommerce retailers, if you have no employees in the state, ignore this warning it and scroll to the bottom of the page where you will see an option to continue.
- By paper using form CR 0100AP. (If you are a business outside of Colorado, but you still have presence in the state, use this method to create an account with the state. There is no fee!)
- Mail to:
- Colorado Department of Revenue, Registration Control Section, PO Box 17087, Denver, CO 80217-0087
- Walk in locations:
- Denver Service Center, 1375 Sherman St., Denver CO 80261
- Colorado Springs Service Center, 2447 N. Union Blvd., Colorado Springs CO 80909
- Pueblo Service Center, 827 W. 4th St., Suite A, Pueblo CO 81003
- Grand Junction Service Center, 222 S. 6th St., Room 208, Grand Junction CO 81501
- Fort Collins Regional Service Center, 3030 S. College Ave., Fort Collins CO 80525
- Mail to:
- Online using Colorado Business Express
- For single and multiple special event licenses, register:
5) How much does this permit cost?
- For retail and wholesale licenses there is a $16 fee for each physical business location and a $50 deposit collected at the time of registration. However, this deposit will be refunded after the business has paid $50 in sales taxes to the state.
- There is an $8 fee for a single special event license and a $16 fee for a multiple special event licenses.
6) When will I receive the permit?
- For online registration, you will receive your license number on the same day, and your paper license in 2-3 weeks.
- For paper registration, it takes 4-6 weeks for processing.
7) When will I need to renew?
- Colorado sales tax licenses are good for a two-year period and expire at the end of each odd-numbered year. There is a $16 renewal fee for each physical location.
- Renew with a paper renewal application (Form DR 0594)
- Renew online through the EFT
For more information: Colorado Tax Rules and Regulations
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