Each state imposes taxes on certain types of sales, though the rules differ from one state to the next. Businesses that sell taxable goods in Colorado are required to collect sales tax from customers and remit it to the state. The sale or lease of tangible goods is subject to sales tax in Colorado. Examples of tangible property include clothing, furniture, vehicles and jewelry. Colorado does not impose sales tax on most personal services such as haircuts, home repairs and consulting. However, if you sell products in connection with a personal service, you might still be required to collect tax on the sale of the products.
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Types of Colorado Sales Tax Licenses
Colorado has many types of sales tax licenses. The type of sales tax license you need depends on the type of product you sell. Businesses that sell general retail items on an ongoing basis need a regular Standard Retail sales tax license. You’ll also need a special event license to sell taxable items through venues such as festivals and public gatherings. Some businesses are exempt from collecting and remitting Colorado sales taxes, and if your business falls into this category, you’ll need an exemption license. You may be exempt if you operate a non-profit organization, or if you’re a general contractor that purchases construction materials for non-profit organization projects.
Ways to Apply
To apply for a sales tax license in Colorado, most businesses will use Form CR0100. This is a combination form that lets companies apply for Standard Retail, Wholesale and Exempt licenses. If you need an event license, you’ll need to complete Form DR 0589
instead. Either form can be completed and submitted online through Colorado’s Business Express website, by mail, or in person. Walk-in locations are in Denver, Pueblo, Colorado Springs, Ft. Collins and Grand Junction. The mailing address is: Colorado Department of Revenue, Registration Control Section, P.O. Box 17087, Denver CO, 80261-0087. An application fee must be submitted with your Form, and varies depending on when you first started making taxable sales. As of 2015, the fee range is $4 to $16.
Colorado Sales Tax Reports
Sales taxes are considered “trust fund” taxes. This essentially means you collect the tax from customers and hang on to it until it’s time to remit it to the state. The sales tax you collect is not considered income, nor are your sales tax payments considered an expense. After you receive your Colorado Sales Tax account number, you’ll use the number to file regular sales tax returns. The type of form and frequency you file depends on what type of sales tax you collect and how much sales tax you collect each month. Colorado’s regular form for retail sales is DR0100.
In Colorado, if you collect less than $15 in sales tax each month, you’ll file an annual return. If your business collects less than $300 in sales tax per month, you’ll file a quarterly return, and if your business collects more than $300 in sales tax per month, you’ll file monthly. After your filing frequency is established, you must continue to file on that schedule until the state tells you to file on a different schedule, even if you collect zero sales tax in a particular month.