Sales Tax of Colorado: A Comprehensive Guide (2023)

Understanding Sales Tax in Colorado

Sales tax is a crucial revenue generator for the state of Colorado. It is levied on the sale of most tangible personal property, digital goods, and services. As of 2023, the statewide sales tax rate in Colorado is 2.90%, representing the lowest rate among neighboring states.

State Sales Tax Rate

The state sales tax rate of 2.90% is applied to all taxable purchases made within Colorado, regardless of the municipality or county.

Local Sales Tax Rates

In addition to the state sales tax, many municipalities and counties in Colorado have implemented their own local sales tax rates. These rates range from 0% to 4.86%, varying widely across the state.

Taxable Items

Most tangible personal property and digital goods are subject to sales tax in Colorado. A few notable exceptions include:

• Food for home consumption
• Prescription drugs
• Newspapers and magazines
• Services (with some exceptions)

Colorado Sales Tax Holidays

Colorado offers two sales tax holidays each year. During these periods, shoppers can make certain purchases exempt from sales tax. The 2023 sales tax holidays are:

Tax-Free Weekend (August 5-7, 2023)

• Clothing, footwear, and school supplies up to $500

Energy Star Appliance Sales Tax Holiday (July 15-17, 2023)

• Energy-efficient appliances and air conditioners

Common Mistakes to Avoid

1. Not Calculating Local Sales Tax

Failing to factor in local sales tax rates can lead to unexpected charges at the checkout. Always consult a reputable source to determine the combined sales tax rate for your specific location.

2. Assuming Certain Items Are Tax-Free

Even if an item may seem essential or non-luxury, it may still be subject to sales tax. Review the list of taxable items carefully to avoid surprises.

3. Forgetting to Include Shipping Charges

Shipping charges are generally also subject to sales tax. Be aware of this when estimating the total cost of your purchase.

How to Calculate Sales Tax in Colorado

Step 1: Determine the State Sales Tax

Calculate 2.90% of the purchase price.

Step 2: Determine the Local Sales Tax

Refer to the local sales tax table or contact your municipality for the applicable rate.

Step 3: Add State and Local Sales Tax

Add the state sales tax amount to the local sales tax amount.

Step 4: Calculate the Total Sales Tax

Multiply the combined sales tax rate by the purchase price.

Tables for Colorado Sales Tax

Table 1: Local Sales Tax Rates in Colorado (2023)

Table 2: Sales Tax Holidays in Colorado (2023)

Table 3: Colorado Sales Tax Rates by County

Simply refer to the table below to get the combined sales tax rate for your location.

| County | Combined Sales Tax Rate |
|---|---|
| Adams | 7.86% |
| Arapahoe | 8.21% |
| Boulder | 8.47% |
| Broomfield | 8.21% |
| Denver | 8.66% |
| Douglas | 8.21% |
| El Paso | 8.09% |
| Garfield | 6.15% |
| Jefferson | 8.08% |
| Larimer | 7.98% |
| Mesa | 7.75% |
| Morgan | 7.80% |
| Otero | 6.95% |
| Pueblo | 7.85% |
| Weld | 7.75% |

Table 4: Sales Tax Forms and Instructions