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This Colorado sales tax guide for 2026 is written for owners and CPA firms who collect tax in Colorado or sell into it from another state. The state rate is only 2.9%, yet Colorado is one of the hardest states in the country to comply in, because more than 300 local jurisdictions layer their own taxes on top and dozens of home-rule cities write and collect their own sales tax codes. Three things changed recently: retailers lost the state vendor fee on January 1, 2026, electronic filing became mandatory for larger sellers, and most software becomes taxable at the state level on January 1, 2027.
Figures are current as of October 2026. Local rates change on January 1 and July 1, so confirm any address before you set up your system.
Colorado has three layers of sales tax, and each one can have a different tax base.
State tax. The state rate is 2.9% and applies statewide. The DOR administers it.
State-administered local taxes. Counties, statutory cities and special districts (such as the Regional Transportation District and the Scientific and Cultural Facilities District) set their own rates, but the DOR collects them on the same return as the state tax. These jurisdictions generally follow the state tax base, with some local options such as taxing groceries.
Self-collected home-rule city taxes. Colorado's constitution lets home-rule cities adopt their own sales tax ordinances. Denver, Aurora, Colorado Springs, Boulder, Fort Collins, Lakewood and many others collect their own tax, issue their own licenses, define their own taxable items and run their own audits. The DOR states plainly in its Colorado Sales Tax Guide that it does not administer these taxes.
A sale can be exempt under state law and taxable under a home-rule city's code, or the reverse. For more detail on how a seller's location versus the buyer's location drives the rate, see our explainer on destination-based and origin-based sourcing rules.
The combined rate is the sum of every layer that applies at the delivery address. Colorado sources most retail sales to where the buyer takes possession, so a seller in Grand Junction shipping to Denver charges the Denver rate.
Here is how the Denver rate builds up, using the rates published on the City and County of Denver's business tax page:
| Layer | Who administers it | Rate |
|---|---|---|
| Colorado state | DOR | 2.90% |
| Regional Transportation District (RTD) | DOR | 1.00% |
| Scientific and Cultural Facilities District | DOR | 0.10% |
| City and County of Denver | Denver (self-collected) | 5.15% |
| Total | 9.15% |
On a $2,000 sale delivered to a Denver address, the customer pays $183 in tax. The seller reports $80 ($58 state, $20 RTD, $2 SCFD) to the DOR and $103 to Denver, either directly or through SUTS. Rates on both lines can change on January 1 or July 1, so old rate tables are not safe to reuse.
Outside Denver, combined rates commonly fall between about 4% and 9%, and some mountain resort towns run higher. The only reliable way to get a rate is the DOR's Colorado sales tax lookup tool, which returns every jurisdiction for a specific address. The DOR also publishes the DR 1002 rate table twice a year with contact details for each self-collecting city.
Any retailer with a physical presence in Colorado, such as a store, office, warehouse, inventory or employees, needs a state sales tax license before making taxable sales.
Remote sellers with no Colorado location need a license once their Colorado retail sales exceed $100,000 in the current or previous calendar year. There is no transaction count test. The timing works like this:
A seller who sells only through a marketplace such as Amazon or Etsy can be exempt from licensing and filing if the marketplace facilitator collects all state and state-administered local tax on its behalf. If you also sell through your own website, the marketplace sales still count toward your threshold. Online sellers should also read our e-commerce sales tax compliance guide. Our post on economic nexus for growing businesses compares Colorado's $100,000 test with other states.
The state license fee is $16, prorated by the date of issue, plus a $50 deposit. The DOR refunds the deposit once you have filed, paid and remitted more than $50 in state sales tax. Licenses expire on December 31 of odd-numbered years, so licenses currently in force run through December 31, 2027. Register through Revenue Online.
A state license does not cover self-collecting home-rule cities. If you have a location in Aurora, for example, you also need an Aurora license. Remote sellers get some protection under HB24-1041: a home-rule city that does not use the state's SUTS portal cannot require a retailer with no physical presence in Colorado to collect its tax unless the retailer opts in or signs a voluntary agreement.
SUTS (the Sales and Use Tax System) is the state's single portal for filing and paying Colorado sales tax across jurisdictions. One login covers state and state-administered local sales tax plus participating home-rule cities.
The DOR's list of SUTS participating jurisdictions covers more than 200 municipalities, 51 counties and the special districts, including the large home-rule cities of Denver, Aurora, Colorado Springs, Boulder, Fort Collins and Lakewood. Twenty-seven home-rule cities also accept use tax returns through SUTS.
What SUTS does not do:
Retail sales of tangible personal property are taxable unless a specific exemption applies. Colorado taxes relatively few services; most professional, personal and repair labor services are not taxed at the state level when separately stated.
Common state-level rules:
Under HB26-1223, signed June 4, 2026, Colorado repeals its exemption for downloaded software starting January 1, 2027. Software sold for repeated sale or license is treated as tangible personal property and becomes subject to state sales and use tax. Software built for one particular user, and downloaded software governed by a negotiable license agreement, stay exempt. Home-rule cities set their own software rules, so the state change does not settle the city answer. Software companies with Colorado customers should review billing systems and exemption documentation before year end. Our post on whether SaaS is taxable and where covers the multistate picture.
An exempt sale needs paperwork. For resale, keep the buyer's Colorado sales tax license number or a completed exemption certificate on file at the time of sale. Government entities and qualifying charitable organizations provide their own exemption numbers.
Home-rule cities can require their own forms or apply different exemptions, so a certificate that satisfies the state may not satisfy Boulder or Colorado Springs. Our guides on managing sales tax exemptions and resale certificates and why an exemption certificate is the seller's audit shield explain how to collect and store them.
The DOR assigns your filing frequency based on your average monthly state sales tax collected.
| Average monthly state sales tax | Filing frequency | Due date |
|---|---|---|
| More than $1,100 | Monthly | 20th of the following month |
| More than $50, under $1,100 | Quarterly | 20th of the month after the quarter |
| $50 or less | Annual | January 20 of the following year |
If the 20th falls on a weekend or legal holiday, the return is due the next business day. You must file a return for every period, even when you had no sales. The DOR can move you to a more frequent schedule effective January 1, but it will not automatically move you to a less frequent one.
Through 2025, retailers with $1 million or less in taxable sales per period kept 4% of the state tax they collected, capped at $1,000 per return. HB25B-1005, passed in the August 2025 special session, eliminated that service fee for state sales tax starting January 1, 2026. Some state-administered local jurisdictions still allow a fee on their portion. Sellers who still deduct it on 2026 state returns are underpaying.
Retailers with $500,000 or more in annual Colorado gross sales must file electronically starting January 2026. The threshold drops to $50,000 in January 2027, and all returns for periods from January 2028 onward must be filed electronically. The penalty for a paper return when e-filing is required is the greater of $50 or 5% of the tax due. Retailers with more than $75,000 of state sales tax liability in the prior year must also pay by EFT.
Late filing or payment draws a penalty of 10% of the unpaid tax plus 0.5% per month, up to 18% in total. Interest for 2026 is 11% at the regular rate and 8% at the discounted rate the DOR allows in qualifying cases. Keep records that support every return for at least three years.
Separate from sales tax, Colorado charges a retail delivery fee on any retail sale delivered by motor vehicle to a Colorado address when at least one item is subject to state sales tax. The fee is per delivery, not per item. According to the DOR's retail delivery fee rate table, the fee is $0.28 for July 2025 through June 2026 and $0.31 for July 2026 through June 2027.
Retailers with $500,000 or less in Colorado retail sales in the prior calendar year are exempt from collecting it, though they may choose to. State sales tax does not apply to the fee itself. Some home-rule cities do include it in the taxable price.
Use tax covers taxable items bought for use in Colorado when no Colorado sales tax was charged, typically online purchases from out-of-state vendors or inventory pulled for internal use. The rate matches the sales tax rate where the item is used. Businesses owe state use tax to the DOR and city use tax to home-rule cities that impose it; 27 of those cities accept use tax returns through SUTS. Unpaid use tax on fixed assets and supplies is a frequent audit finding, so build a monthly review of untaxed vendor invoices into your close.
If you have been selling into Colorado without a license, a voluntary disclosure agreement usually limits lookback and penalties. Already under review? Our post on how to handle a sales tax audit covers the process. For sellers registered in several states, our multi-state tax compliance guide for growing businesses and the comparison of sales tax automation software are the next reads. Landlords with Colorado property should also check the Colorado rental property filing requirements, which are a separate obligation from sales tax.
The state rate is 2.9%, unchanged for 2026. What customers actually pay depends on the delivery address, because county, city and special district taxes are added on top. In Denver the combined rate is 9.15%.
Not always. If the city participates in SUTS, you can file its return in the same portal as your state return. You still need that city's license, and you must apply its own rules on what is taxable.
At the state level, delivery charges that are separately stated on the invoice are generally excluded from the taxable price. Home-rule cities set their own rules on delivery charges, so check each city's code for locations where you have significant sales.
A remote seller over the $100,000 threshold must collect state and state-administered local taxes. Home-rule cities that participate in SUTS have generally adopted matching economic nexus rules, while non-SUTS home-rule cities cannot require collection from a seller with no Colorado physical presence under HB24-1041.
Downloaded software sold for repeated sale or license becomes taxable at the state level on January 1, 2027, under HB26-1223. Custom software and software under a negotiable license agreement remain exempt.
Colorado rewards sellers who map their products and locations correctly once and then automate. Madras Accountancy prepares Colorado state, SUTS and home-rule returns for businesses and for CPA firms that want to hand off multi-jurisdiction sales tax work. Contact our team for a scoped quote on your Colorado filings.
The section 4960 excise tax is 21% of nonprofit pay over $1M. From 2026 it covers all employees. See the medical carve-outs, Form 4720 and a worked example.
The paid family and medical leave tax credit is permanent from 2026. See the 12.5% to 25% rates, the premium option, the 6-month rule and how Form 8994 works.
Opportunity zones become permanent in 2027 under the One Big Beautiful Bill. See the new deferral, rural bonus, and the 2026 handoff.
