Colorado sales tax on invoices (2026 guide)

Colorado's state sales tax rate is 2.9% — one of the lowest in the country. But local taxes from counties, cities and special districts sit on top, and some cities don't use the state system at all. The total rate on an invoice is often several times the state rate.

Colorado has two quirks every seller should know: home-rule cities that administer their own sales tax, and the retail delivery fee on deliveries of taxable goods. This guide covers both, along with licensing, resale and what Colorado requires on your invoices.

Colorado sales tax rates

State-administered vs. home-rule cities

The Colorado Department of Revenue (CDOR) administers the state tax and the sales taxes of many cities, most counties and a number of special districts. You report those on the same state return. CDOR's publication DR 1002 lists those rates and is updated each January 1 and July 1.

Home-rule cities that have elected to self-collect — Denver is one example — are different. CDOR doesn't administer their taxes. These cities set their own rules about which goods and services are taxed, and you work with the city directly. DR 1002 lists each self-collecting city's contact information.

To find the full rate for an address, use CDOR's Sales & Use Tax System (SUTS). Its free lookup tool returns state, county, city and special district rates for a single address, and SUTS also offers a single place to file and pay for participating jurisdictions.

Is what you sell taxable in Colorado?

Colorado taxes retail sales of tangible personal property. CDOR says that in general, the tax does not apply to services, except those specifically taxed by law. For small businesses:

• Goods are taxable, including digital goods such as downloaded video, music and e-books.
• Most services — consulting, design, writing, bookkeeping — aren't taxed by the state.
• Bundled sales of goods and services may be taxable in full. A service charge tied to a sale is left out of the taxable price only if it is both separable (the customer could decline it) and separately stated on the invoice.
• Home-rule cities can tax things the state doesn't, so check each self-collected city you sell into.

Getting a Colorado sales tax license

Any retailer required to collect Colorado sales tax needs a Colorado sales tax license. CDOR's sales tax guide says the license fee is $16 (prorated depending on when it's issued) plus a $50 deposit, which is refunded once you've filed returns and remitted more than $50 in state sales tax. Returns are generally filed monthly. Home-rule cities that self-collect may require their own license.

CDOR is phasing in mandatory electronic filing for retail sales tax returns: retailers with $500,000 or more in prior-year gross sales from January 2026, $50,000 or more from January 2027, and everyone from January 2028.

Remote sellers

Retailers without a physical presence are exempt from state licensing and collection only if their Colorado retail sales are less than $100,000 in both the current and previous calendar years. All retail sales count toward the threshold, taxable or not.

The retail delivery fee

Colorado charges a retail delivery fee on deliveries by motor vehicle to a Colorado location that include at least one item subject to state sales or use tax. Shipped and mailed orders count, including those delivered by a third party.

• Amount: $0.31 per delivery from July 1, 2026 to June 30, 2027 (it was $0.28 for July 2025 – June 2026). The rate may rise each July with inflation.
• Small retailer exemption: a business whose Colorado retail sales were $500,000 or less in the previous year doesn't owe the fee.
• On the invoice: you either show the total as a single line called "Retail Delivery Fee", separate from the price and other charges, or elect to pay the fee yourself without showing it.

The fee isn't subject to state or state-administered local sales tax, but CDOR notes it may be taxable in self-collecting home-rule cities.

What a Colorado sales tax invoice must show

• your business name and address,
• the customer's name and the delivery address,
• a unique invoice number and the invoice date,
• each item or service with its price,
• sales tax as a separate dollar amount — CDOR says a statement of the rate alone isn't enough,
• the retail delivery fee as its own line, if you collect it, and
• the total due.

Resale and exemption certificates

When a customer claims an exemption as a retailer, wholesaler or tax-exempt organization, you must verify that their Colorado sales tax license or exemption certificate is current — CDOR recommends checking online through Revenue Online — or inspect a physical copy and keep it. From out-of-state buyers, you can accept a completed Declaration of Wholesale or Entity Sales Tax Exemption (DR 5002) or the Multistate Tax Commission's Uniform Sales & Use Tax Exemption/Resale Certificate. Keep records for at least three years. See how to invoice a tax-exempt customer.

A worked example

Your company had more than $500,000 in Colorado retail sales last year, and you ship a $400 order to a customer whose address has a combined state and state-administered local rate of 7% (a hypothetical rate for this example).

• Sales tax: $400 × 7% = $28.00
• Retail delivery fee: $0.31 (not taxed by the state)
• Invoice total: $400 + $28.00 + $0.31 = $428.31

If the address were in a self-collecting home-rule city, you'd use that city's rate and rules for the city portion.

Selling to customers in other states

If you ship goods to customers in another state, that state's rules may apply instead of Colorado's. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. Check each state you sell into and use its rate on those invoices. Our sales tax calculator can help with the math.

Common mistakes on Colorado invoices

• Charging only 2.9% and forgetting county, city and district taxes.
• Assuming the state collects every city's tax. Home-rule cities may self-collect.
• Showing the tax rate but not the dollar amount.
• Bundling services with goods without separating optional charges.
• Missing or mislabeling the retail delivery fee on qualifying deliveries.

Quick checklist for Colorado invoices

• ✅ Colorado sales tax license, plus any home-rule city licenses
• ✅ Full rate for the delivery address from SUTS
• ✅ Sales tax shown as a separate dollar amount
• ✅ $0.31 retail delivery fee line, if you're not exempt and don't absorb it
• ✅ Customers' licenses or certificates verified and kept for three years