If you’re selling digital services and products to customers in Colorado, then you might be liable for Colorado’s sales tax. This guide helps you with:
- The 8-step process of how to register for Colorado sales tax online, and
- How to file sales tax returns in Colorado on time
We’ve scoured the Department of Revenue website to provide you with all the necessary information about Colorado sales tax for out-of-state businesses in one place.
How do I register for sales tax in Colorado?
Remote sellers can register online for sales tax in Colorado through Revenue Online and Colorado Sales and Use Tax System (SUTS), an online portal that provides various tax services. This portal is also where you’ll file and pay your tax returns. More on that later!
The first step is to register for a sales tax license and receive a tax number. This is a simple process! But before you begin, have this information handy:
- Your Social Security number (if registering as a sole proprietor with no employees)
- Your Employer Identification Number (EIN)
- North American Industry Classification System number. Each number is a 2-6 digit code. Find yours in the NAICS directory.
- The date of your first sale in Colorado
Apply for a sales tax license in Colorado
- Go to the Revenue Online application for out-of-state retailers. Once you pass the instructions, you must confirm that you are indeed an out-of-state business.
Enter your personal information and physical address. At the bottom of the page, you’ll need to verify your address with the system's registry.
You must log at least one business owner in the system’s records. Click “+ Add a Record” at the bottom of the screen.
Enter all these fields you see below. If you’re done, click “Next.” If you’d like to add a second owner, repeat the process by clicking “+ Add a Record” again.
- Next provide the date of your first taxable sale in Colorado, as well as your NAICS code. If needed, you can search for your NAICS code directly on the page! A box will appear, where you can search by keyword. Then select the field most relevant to your business. Here’s an example with the keyword “software.”
- After yet again providing contact details, you must create Login Information for your new Revenue Online tax account in Colorado.
- Next you must select all locations you expect to sell to in Colorado. This determines where you must eventually file taxes, sometimes in multiple local jurisdictions.
It’s possible to select all locations at once by clicking “Select All” – but only do so if you plan to conduct business throughout the entire state. Otherwise you can search and filter for specific cities and counties.
Colorado charges a fee for the license application. You must agree to pay the fee and to file in each location you’ve selected in step 6.
Click “Submit” and you’re done! You should receive a confirmation right there on the screen and via email.
The website doesn’t state how long you should expect to wait, but if you have any questions, simply login and contact customer support.
Once your application is reviewed and approved, you should receive a seller’s license and a business tax ID, also known as a Colorado Account Number (CAN). The CAN is listed on your sales tax license as the first 8 digits of the Use Account Number, in the upper left portion.
You’ll also be assigned a tax filing frequency: monthly, quarterly, or annually.
How do I file sales tax returns in Colorado?
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in Colorado in a different currency, be sure to convert those to USD using official currency exchange rates.
When to file and pay
You must file a sales tax return either monthly, quarterly, or yearly. The deadlines are as follows:
For monthly filers, reports are due on the 20th day of the month following the reporting month. For example, the July sales tax report is due August 20.
For quarterly filers, reports are due on the 20th day of the month following the reporting period.
- April 20, for first quarter ending March 31
- July 20, for second quarter ending June 30
- October 20, for third quarter ending September 30
- January 20, for fourth quarter ending December 31
Note: You must still file every quarter even if you made no sales in Colorado! This is typically called a “zero return” and it follows the exact same process as a normal return. (Just a little less data entry 😉)
How to file tax returns in Colorado
Before you get started, you should collect all the information about your taxable sales in Colorado during the previous quarter. The tax website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
You can file online in Revenue Online. You can log in here.
Once submitted, you should receive confirmation and a Filing ID, which is a unique identifier for this particular tax return. You can keep this for your records.
How to pay sales tax in Colorado
Tax payments must be made electronically and in US dollars. You can pay directly at the time of filing through your Revenue Online account.
Colorado offers a few different payment methods. Please note that most methods charge a service fee and take a few days to process payment!
- Debit or credit card
- EFT (ACH Debit or Credit)
What to do in between registering and filing?
So, you’ve learned how to register & file taxes online in Colorado. Now you must comply with all the rules for Colorado sales tax! That means charging 2.9% sales tax and watching out for local level taxes, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Business Guide to Sales Tax in Colorado.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.