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use tax

Use tax is a tax imposed by state taxing authorities on the purchase of goods outside the taxpayer’s state of residence when sales tax is not collected on the transaction. Use taxes are generally designed to discourage the purchase of goods that are not subject to sales tax.

In Colorado, use tax functions as a complement to sales tax and is designed to ensure that the state collects tax on goods purchased out of state or from sources where sales tax was not collected at the time of purchase. This applies to both individual consumers and businesses. If a Colorado resident buys goods out of state or online and does not pay Colorado sales tax, they are typically required to pay the equivalent use tax directly to the Colorado Department of Revenue. The use tax rate in Colorado is the same as the sales tax rate, which is 2.9% at the state level as of the knowledge cutoff in 2023. However, local jurisdictions within Colorado may impose additional use taxes. Taxpayers are responsible for reporting and paying use tax on their Colorado income tax return or through the Department of Revenue's online system if the vendor did not collect Colorado sales tax at the time of purchase.

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Taxes

use tax

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Taxes

use tax

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