TAX NEWS - January 2010

Colorado Use Tax

If you or your business buys an item and you weren't charged sales tax, you are probably responsible for paying a use tax on that item.  Purchases made over the Internet, from mail order catalogs, or through toll-free numbers are sometimes from out-of-state vendors who may or may not collect Colorado tax.  You must pay use tax on anything that is normally taxable if you didn't pay tax on it when you bought it.

The state use tax rate is 2.9%, plus there may be special district use taxes due, depending on where you are located. The Colorado Department of Revenue collects the following types of use tax: state use tax, Denver Regional Transportation District (RTD)/Cultural District (CD)/Football District (FD) use tax and Rural Transportation Authority (RTA) use tax. Use tax for RTD/CD/FD districts is reported on the Consumer Use Tax Return (DR 0252). Use tax for RuralTransportation Authorities (RTAs) is reported on the RTA Consumer Use Tax Return (DR 0251). All other cities and counties in Colorado collect their own use tax when applicable. Use tax must be paid by businesses and individuals who purchase goods from a seller who did not collect Colorado sales tax.

Colorado law requires that state sales or use tax be paid on all non-exempt tangible personal property that is sold, leased, or delivered in Colorado for use, storage, distribution or consumption in the state.  You have to file a use tax return at least once a year, or by the 20th of the following month whenever you have bought $10,345 worth of goods that weren't taxed.