Your Complete Guide to Colorado Sales Tax

Key Takeaways

• Colorado’s state sales tax rate is 2.90%, but total rates vary by location due to local taxes, special districts, and Colorado home rule cities, which change frequently.
• Businesses with physical or economic nexus in Colorado are required to collect and remit sales tax to the state and, sometimes, home rule cities directly.
• Marketplace facilitators such as Amazon and Etsy collect and remit Colorado sales tax on behalf of sellers.
• Marketplace sales do not count toward a seller’s economic nexus threshold in Colorado.
• Colorado typically assigns a monthly filing frequency to businesses, though some businesses may qualify for quarterly or annual filing.
• Effective January 1, 2026, Colorado will eliminate the state sales tax vendor fee, meaning retailers will no longer retain a portion of state tax collected to offset filing costs.

Do You Need to Collect and Remit Sales Tax in Colorado? 

Businesses located in Colorado—and many businesses located outside the state—may be required to collect and remit Colorado sales tax if they have sales tax nexus in the state.

Nexus refers to a sufficient connection with Colorado that creates a sales tax obligation. This connection can be physical, such as having employees or inventory in the state, or economic, based on sales volume into Colorado.

For new or small businesses selling into only a few states, determining nexus may be fairly straightforward. For growing businesses, online sellers, or companies expanding into multiple states, nexus tracking can quickly become complicated—especially in Colorado, where home rule cities administer and enforce their own sales tax rules.

If you’re unsure where you have nexus or want help staying compliant as your business grows, SalesTaxSolutions.US offers à la carte Nexus Reviews to help you avoid missed registrations and potential penalties.

Do You Have Sales Tax Nexus in Colorado? 

Like most states, Colorado recognizes two types of sales tax nexus: physical nexus and economic nexus.

Physical sales tax nexus in Colorado 

A business has physical nexus in Colorado if it maintains a place of business in the state—either directly or indirectly. The Colorado Department of Revenue considers physical nexus to include:

• Offices or retail locations
• Distribution centers or warehouses
• Storage facilities
• Salesrooms
• Employees or sales representatives working in Colorado
• Home offices of Colorado-based employees

Any of these activities may require your business to register and collect Colorado sales tax.

Economic sales tax nexus in Colorado 

Out-of-state businesses may also establish nexus through economic activity alone. Colorado’s economic nexus threshold is $100,000 in annual retail sales delivered into the state.

Once this threshold is exceeded, the business must register with the Colorado Department of Revenue and begin collecting and remitting Colorado sales tax—even if it has no physical presence in the state.

Are Marketplace Facilitators Required to Collect and Remit Sales Tax in Colorado? 

Yes. Since October 1, 2019, Colorado law has required marketplace facilitators—not individual marketplace sellers—to collect and remit Colorado sales tax on taxable sales made through their platforms.

Sellers should still confirm that the platform is properly registered with Colorado. To document compliance, sellers may request Form DR 1290 (Marketplace Facilitator Certification) from the facilitator.

It is important to note that marketplace sales do not count toward Colorado’s economic nexus thresholds. This means a seller that exclusively sells through a marketplace generally won’t have any Colorado sales tax obligations. However, sellers that also make direct (non-marketplace) sales should track those sales separately when monitoring nexus thresholds.

Are you a multi-state seller needing help with nexus? SalesTaxSolutions.US has you covered. Click here to learn more about nexus determinations and our other services!

Common marketplace facilitators 

• Amazon   
• Ebay   
• Shopify Shop App
• Etsy   
• Walmart (online)   

Filing Colorado Sales Tax

Once you determine that your business has nexus and must collect Colorado sales tax, the next step is to apply for a Colorado Sales Tax License.

• In-state businesses can apply by using Form CR 0100 or through MyBizColorado.
• Out-of-state sellers register through Revenue Online.

Colorado sales tax licenses are valid for two years and must be renewed to remain active.

Home Rule Licensing

Colorado sales tax licensing can be confusing because some cities and counties (known as home rule cities) require separate licenses and filings.

A list of Colorado’s home rule cities, along with contact information and tax rates, can be found in the DR 1002 publication. Businesses must research or contact each applicable home rule jurisdiction to determine licensing and filing requirements.

Collecting Colorado Sales Tax at the Correct Rates

Collecting Colorado sales tax accurately requires more than knowing the state sales tax rate of 2.90%. Total rates vary widely based on location due to local, special district, and home rule city taxes.

Ensuring that your tax software or rate matrix is properly configured is critical. Over-collecting can result in refund obligations, while under-collecting may leave the seller responsible for unpaid tax, penalties, and interest.

The Colorado Department of Revenue recommends using its Geographic Information System (GIS) database to determine accurate sales and use tax rates for specific addresses. Sellers should also regularly review official Colorado sales tax rate change publications or sign up for free email alerts to stay informed.

Tip: Colorado frequently updates local sales tax rates on January 1 and July 1 each year. Information about upcoming rates are published ahead of time.

How to File Once Licensed

After receiving your license, businesses can file Colorado sales tax returns using one of the following methods: 

1. Paper filing with form DR 0100
2. Online filing through Revenue Online (recommended)
3. Filing through an approved sales tax software vendor 
4. Spreadsheet filing (with Department of Revenue approval) 

If you operate in a home rule city and registered directly with that jurisdiction, returns may need to be filed through the city or county’s website or via approved spreadsheet uploads through Revenue Online.

Let Us File For You!   

Sales tax compliance takes time—time most business owners would rather spend running their business. Between changing Colorado sales tax rates, home rule city requirements, and filing deadlines, it’s easy to fall behind.

That’s where SalesTaxSolutions.US comes in. With more than 20 years of experience, we help businesses manage sales tax compliance across Colorado and nationwide. From registrations to ongoing filings, our team ensures your returns are filed accurately and on time.

See our transparent pricing tiers here!  

When Are Sales Tax Returns Due in Colorado? 

Your filing frequency is assigned when your Colorado sales tax license is issued. Most businesses are required to file monthly, though quarterly and annual filing options are available.

Important update: Beginning January 1, 2025, businesses that collect less than $600 in sales tax per month may qualify for quarterly filing.

Filing frequencies may be adjusted upon request or as part of the Department of Revenue’s annual review. Regardless of filing frequency, a return must be filed for every reporting period, even if no tax is due. This is known as filing a zero return.

Returns are due on the 20th day of the month following the reporting period. If the 20th falls on a weekend or holiday, the due date moves to the next business day.

Check out the graphic below for more information on due dates and frequencies. 

Elimination of the state sales tax vendor fee (effective January 1, 2026)

Colorado retailers should be aware of this important change that will impact sales tax remittance and filing.

Under House Bill 25B-1005, Colorado will eliminate the state sales tax vendor fee effective January 1, 2026. Previously, this fee allowed retailers to retain a small percentage of state sales tax collected to help offset the administrative costs of filing and remitting tax.

Beginning in 2026:

• Retailers will no longer be allowed to retain any portion of Colorado state sales tax collected
• This change applies to both in-state businesses and remote sellers
• Local or home rule vendor fees may still apply, depending on the jurisdiction

Because Colorado has a large number of home rule cities, sellers should review local requirements carefully to understand whether any local vendor compensation remains available.