Colorado taxpayers may owe consumer use tax for Cyber Monday online purchases
November 29, 2017
DENVER — Taxpayers owe consumer use tax when they store, use or consume a taxable item in Colorado for which the retailer did not charge tax at the time of sale. This most commonly occurs when a Colorado resident makes a purchase from an out-of-state seller, either over the internet or through catalog sales.
• How do I know if I need to pay consumer use tax? At the time of purchase, non-collecting retailers must provide a Transactional Notice to Colorado customers, informing them that the retailer has not paid Colorado state taxes on the item(s) being purchased and the customer may have a tax obligation to the state. The Colorado Department of Revenue recommends customers check if sales tax is being charged when shopping online. Customers should keep a record of the purchase amount for all purchases made in 2017 for which no sales tax was paid.
• How do I calculate consumer use tax? Colorado use tax is calculated at 2.9 percent. The Department of Revenue administers use tax for certain special districts but does not administer use tax for any city or county. Taxpayers can use the DR 1002 publication available at colorado.gov/tax to help them determine what use tax rate to apply. It lists the use tax rates for all Colorado cities, counties and special districts.
• How do I file and pay consumer use tax? Use taxes on all purchases made in a calendar year for which sales tax was not paid are due the following April by the income tax deadline. Taxpayers should report and pay use tax for those purchases when filing their Colorado income taxes in April.
Visit colorado.gov/tax/usetax for more information about consumer use tax.