If your limited liability company (LLC) sells physical products or certain types of services, you will need to collect and pay sales tax. In Colorado, the first step is visiting the revenue department’s website and registering for sales tax in order to acquire a seller’s permit, or sales tax permit.
What Products and Services Are Subject to Sales Tax in Colorado?
Retail sales of tangible property are subject to sales tax in Colorado. Services subject to sales tax include telephone services, accommodations, some utilities, and prepared foods. Prescription drugs, insulin and insulin supplies, and prosthetic and medical supplies are exempt from sales tax.
Colorado Sales Tax Rate
Colorado has the lowest sales tax at 2.9%.
Five states have no sales tax. California has the highest rate at 7.25%.
How to Register for Colorado Sales Tax
In Colorado, acquire a seller’s permit by following the detailed instructions for registration:
- Visit the My Biz Colorado website.
- Fill out the business sales tax registration form.
- Pay the $16 fee.
Use our Sales Tax Calculator to calculate taxes and total purchase amount.
In Colorado, and across the country, collecting sales tax is a must if you want to avoid potentially heavy fines and even closure. It’s crucial that you follow your state’s laws, and you might consider consulting with an accountant or tax attorney to make sure you’re in full compliance.