Sales Tax Updates in Colorado

Tax Professionals' Resource
January 8, 2013 — 1,151 views  
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The 2.9% statewide sales and use tax remains in effect for Colorado. Exemptions for food consumed at home, most tools and machinery, farm equipment, charitable intermittent sales, renewable energy products, consumer gas and electricity and low emission vehicles remain in effect. Effective July 1, 2012, pesticides are now considered a wholesale product and are no longer subject to the retail sales tax.

Local Sales Tax Changes

• Lakeside Center instituted a .6 percent sales tax. No exemptions were created, nor was a use tax;
• Whitewater and Gateway created a 1 percent local sales tax, with exemptions for electricity and gas and for telephone service;
• Rio Blanco added an exemption for farm equipment sales;
• Larimer County’s sales tax is now 6 percent;
• Calhan has increased its tax and use rate to 3 percent. Exemptions for home consumption food, electricity and gas, machinery and renewal components apply;
• Fleming has created a new sales tax rate of 2 percent, with all state exemptions except food applying to the tax;
• El Paso County increased its rate to 1.23 percent and San Juan County increased its rate to 5 percent;
• Nucla extended 1 percent of its 4 percent rate until 2019;
• Gilcrest increased its municipal tax to 4 percent and Holly increased to 3 percent. Neither applies any exemptions.

Internet Sales

The preliminary injunction issued by Judge Blackburn, federal district court judge for Colorado, remains in effect. In 2010, Colorado passed sales tax legislation requiring out of state retailers to collect sales tax or report the customers not paying sales tax to the Department of Revenue.

A lawsuit was filed by Direct Marketing Associates, an affiliation of Amazon. In 2011, Judge Blackburn issued a preliminary injunction, barring Colorado from requiring retailers to report the names of customers to the department. The injunction does not prevent Colorado from collecting the use tax from taxpayers making internet purchases.

Amendment 64

Retailers for the sale of marijuana have not yet been established. It is unlikely they won’t be established until 2014. Whether the taxation of marijuana for personal use will be taxed at the general state sales tax rate, a different rate, or whether it is taxed at all is not yet known. Localities will retain the right to prohibit sales of marijuana in their counties. Medical marijuana, sales tax collections have risen 58 percent from this time a year ago, and have grown 38 percent overall in the past year.

 

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