Colorado's statewide sales tax is 4.63 percent

Colorado charges a statewide sales tax of 4.63 percent on most retail purchases. This is the base rate that applies everywhere in the state. However, your actual sales tax bill will be higher in most places, because cities and counties add their own local taxes on top of the state rate.

The total you pay depends on where you make the purchase. A transaction in Denver will have a different total rate than the same purchase in Boulder or Colorado Springs, because each municipality has layered its own tax on top of the state base. When you see a price tag, it does not include any sales tax — you pay the tax at checkout.

Colorado does not have a statewide sales tax on groceries, prescription medications, or medical equipment. Some cities and counties have added their own local taxes on these items, but the state itself exempts them. This is one of the few major categories with a break from the full rate.

Key Takeaways

  • Colorado's base sales tax rate is 4.63 percent statewide, but your actual rate will be higher because cities and counties add local taxes on top.
  • The total sales tax you pay varies by location — Denver, Boulder, and Colorado Springs each have different combined rates.
  • Groceries and prescription medications are not taxed at the state level, though some local jurisdictions may have added their own local taxes on these items.
  • You can find your exact local rate by entering your address into the Colorado Department of Revenue's tax rate lookup tool or by asking a retailer in your area.

How local taxes stack on top of the state rate

When you buy something in Colorado, you pay three layers of sales tax: the state rate, the county rate, and the city rate. Each one is calculated on the purchase price and added together. A 4.63 percent state tax plus a 2 percent county tax plus a 3.5 percent city tax would total 10.13 percent.

Local rates vary widely. Some counties and cities have no additional local tax at all, while others add 4 percent or more. The variation exists because each municipality sets its own rate to fund local services. A purchase in an unincorporated area of a county will have a different rate than a purchase in a city within that same county.

The Colorado Department of Revenue publishes a complete list of all local tax rates by jurisdiction. You can also call your city or county assessor's office to ask what the combined rate is for your address. Retailers in your area can tell you the rate as well.

What items are taxed and what items are not

Most tangible goods — clothing, electronics, furniture, household items — are taxed at the full combined rate wherever you buy them. Services are generally not taxed in Colorado, which means haircuts, repairs, consulting, and labor are usually tax-free. The distinction matters because a plumber charging you for parts and labor will tax only the parts.

Groceries purchased for home consumption are not taxed at the state level. This includes bread, milk, produce, meat, and canned goods. However, prepared foods — restaurant meals, deli items, and hot foods — are taxed. Some local jurisdictions have added their own tax on groceries despite the state exemption, so check your local rate.

Prescription medications and medical equipment prescribed by a doctor are exempt from state sales tax. Over-the-counter medications like aspirin or cold medicine are taxed. Durable medical equipment such as wheelchairs or oxygen equipment may be exempt depending on how it is classified and whether a prescription exists.

Sales tax on online and out-of-state purchases

If you buy something online from a Colorado retailer, you pay Colorado sales tax based on the delivery address. If you buy from an out-of-state retailer and have it shipped to Colorado, you may owe Colorado sales tax depending on whether the seller has a physical presence in Colorado or meets certain sales thresholds. Most large online retailers now collect Colorado sales tax on all orders shipped to the state.

If you purchase something while traveling outside Colorado and bring it back into the state, you do not owe sales tax on it — the tax was already paid in the state where you bought it. However, if you order something from outside Colorado and it is shipped to you in Colorado, the out-of-state seller may still be required to collect Colorado tax.

How to find the exact rate for your location

The easiest way to find your combined sales tax rate is to use the Colorado Department of Revenue's online tax rate lookup tool. You enter your street address, and the tool returns the exact combined state, county, and city rate for that location. This is the most accurate method because it accounts for all three layers.

You can also contact your city or county assessor's office directly and ask for the combined sales tax rate. They can tell you the breakdown by layer if you want to understand which portion comes from the state, county, and city. Retailers in your area will also know the local rate and can tell you what you will pay.

Frequently Asked Questions

Is Colorado's sales tax higher or lower than neighboring states?

Colorado's base state rate of 4.63 percent is lower than most neighboring states. However, when you add local taxes, Colorado's combined rate often ends up similar to or higher than neighboring states. Wyoming has no sales tax, but Utah, New Mexico, and Kansas all have higher base state rates than Colorado.

Do I have to pay sales tax on used items?

Yes, used items sold by a retailer are taxed the same as new items. If you sell a used item to another person privately, there is no sales tax. The tax applies only when a business makes the sale.

What about sales tax on vehicles?

Colorado charges sales tax on vehicle purchases, but the rate and rules are different from regular sales tax. Vehicle tax is calculated on the purchase price and varies by county. You pay it when you register the vehicle with the Department of Motor Vehicles, not at the dealership.

Are there any items that used to be taxed but are not anymore?

Colorado has made changes to what is taxed over time, but the current exemptions for groceries and prescription medications have been in place for many years. Check the Colorado Department of Revenue website for the most current list of what is and is not taxed.