Colorado Resale Certificate 2026: Sales Tax License and Exemption Guide
Colorado's state sales tax rate of 2.9% looks deceptively low. In practice, Colorado has one of the most complex sales tax systems in the country. Home-rule cities administer their own sales taxes independently. Combined rates can exceed 11%. And businesses operating across multiple Colorado jurisdictions may need to register with five or more separate tax authorities.
This guide covers Colorado's Form DR 0563 (the Exemption Certificate used for resale purchases), the sales tax license process, home-rule city requirements, the retail delivery fee, and the practical steps to get registered in 2026.
Colorado Sales Tax Rates in 2026
State Rate
Colorado's state sales tax rate is 2.9%, one of the lowest state rates in the country.
The Real Picture: Local Rates
The state rate is only the starting point. Colorado has state-collected local taxes, county taxes, city taxes, and special district taxes that stack on top:
| Location | Local Rate | Combined Rate |
|---|---|---|
| Denver | 5.15% | 8.81% |
| Colorado Springs | 5.33% | 8.23% |
| Aurora | 5.0% | 8.0% |
| Boulder | 5.485% | 8.845% |
| Fort Collins | 4.33% | 7.55% |
| Lakewood | 4.5% | 7.5% |
| Winter Park | 8.3% | 11.2% |
| Vail | 6.5% | 10.4% |
Resort towns like Winter Park and Vail push combined rates past 10% and even 11%. For businesses purchasing inventory in these areas, the tax savings from a valid resale certificate are significant.
Calculate your exact savings with our savings calculator.
The Home-Rule City Problem
This is what makes Colorado uniquely challenging. Colorado has approximately 70 home-rule cities that administer and collect their own sales taxes independently from the state.
What "Home-Rule" Means
A home-rule city has the constitutional authority to:
- Set its own sales tax rate
- Define its own tax base (what is taxable and what is exempt)
- Create its own registration requirements
- Require its own exemption certificates
- Conduct its own audits
The practical impact: If you sell in Denver, you register with Denver. If you sell in Aurora, you register with Aurora separately. If you sell in Colorado Springs, that is another registration. Each city may have different forms, different filing deadlines, and slightly different rules about what qualifies as exempt.
Major Home-Rule Cities
| City | Requires Separate Registration? | Has Own Exemption Form? |
|---|---|---|
| Denver | Yes | Yes |
| Colorado Springs | Yes | Yes |
| Aurora | Yes | Yes |
| Boulder | Yes | Yes |
| Lakewood | Yes | Yes |
| Arvada | Yes | Yes |
| Westminster | Yes | Yes |
| Pueblo | Yes | Yes |
| Grand Junction | Yes | Yes |
State-Collected vs. Self-Collected
Cities that are not home-rule have their sales taxes collected by the Colorado Department of Revenue. You register once with the state, and it handles the local portion. Home-rule cities require direct registration with the city.
This dual system is the primary reason Colorado is considered one of the most difficult states for DIY sales tax registration. Businesses that sell across multiple Colorado cities can easily face 5 to 10 separate registrations and filing obligations.
Form DR 0563: Colorado's Resale Certificate
Form DR 0563 is Colorado's Sales Tax Exemption Certificate. It is used for resale purchases and other exemption claims.
Required Information on DR 0563
- Purchaser's name and address: Your business legal name and registered address
- Colorado sales tax license number or account number: Your state registration number
- Reason for exemption: Check the box for "Resale" and provide your license number
- Description of items to be purchased: General description of goods
- Signature and date: Must be signed by the purchaser or authorized representative
Key Details
- Form DR 0563 does not expire as long as your Colorado sales tax license remains active
- Colorado also accepts the Multistate Tax Commission (MTC) Uniform Sales & Use Tax Certificate
- For home-rule cities, you may need to provide the city's own exemption certificate form in addition to or instead of the DR 0563
- Keep copies of all certificates you issue to suppliers
How to Register for a Colorado Sales Tax License
Step 1: Register with the Colorado Department of Revenue
Online registration:
- Visit the Colorado Department of Revenue's MyBizColorado portal at mybiz.colorado.gov or the Revenue Online portal at colorado.gov/revenueonline
- Complete the sales tax license application (Form CR 0100)
- Provide your Federal EIN, business structure, business locations, and expected sales
Processing time: Online applications are typically processed within 1 to 2 weeks.
Cost: Colorado charges a $16 deposit for a standard sales tax license, refundable upon closure if the account is in good standing. Some county and city licenses have additional fees.
Step 2: Register with Home-Rule Cities
If you have physical presence or make sales in home-rule cities, register with each city separately. Most major home-rule cities have online portals:
- Denver: denvergov.org/tax
- Colorado Springs: coloradosprings.gov/salestax
- Aurora: auroragov.org
- Boulder: bouldercolorado.gov/tax-license
Each city has its own application process, fees, and timelines.
Step 3: Begin Filing and Using DR 0563
Once registered, you can file returns through Revenue Online (for state-collected taxes) and through each home-rule city portal for city-specific obligations.
Given the complexity, professional registration assistance is especially valuable in Colorado.
Get Your Resale Certificate -->
The Retail Delivery Fee
Colorado enacted a Retail Delivery Fee effective July 1, 2022. This fee applies to every retail delivery made by a motor vehicle in Colorado.
Key Facts
- Current amount: $0.29 per delivery (adjusted annually for inflation)
- Applies to: All deliveries of tangible personal property sold at retail
- Collected by: The retailer, who remits it to the Department of Revenue
- Reported on: A separate line item on the sales tax return
Impact on Resellers
If you sell goods and deliver them to customers in Colorado, you must collect the retail delivery fee on each delivery. This is not a sales tax, so it is not affected by resale certificates. It applies to the delivery itself.
For more on delivery fees and their impact on e-commerce, see our retail delivery fees guide.
What Qualifies for the Resale Exemption?
Qualifying Purchases
- Tangible personal property for resale: Products you will sell to customers
- Raw materials and components: Items incorporated into a finished product for sale
- Packaging materials: Boxes, bags, and wrapping for customer shipments
- Items for rental or lease: Goods you rent to customers
Non-Qualifying Purchases
- Office supplies and furniture: Consumed by your business
- Tools, equipment, and machinery: Used in operations
- Fixtures and displays: Store equipment
- Vehicles for business use: Company vehicles
- Consumables: Items used internally
A Note on Tax Base Differences
Because home-rule cities can define their own tax base, an item that is exempt at the state level may be taxable in a specific city, or vice versa. This is rare for standard resale purchases but can come into play with service transactions, digital goods, and certain niche product categories.
How Colorado Treats Contractors
Colorado treats contractors as the end consumer of materials they purchase and install into real property.
The General Rule
- Contractors pay sales tax on construction materials at the time of purchase
- Contractors do not separately charge customers sales tax on installed materials
- Form DR 0563 cannot be used for materials that will be permanently installed
Exceptions
1. Retail sales without installation Materials sold at retail without installation can be purchased tax-free with a resale certificate.
2. Specific city rules Some home-rule cities have their own contractor rules that differ from the state. Always verify with the local jurisdiction.
The Home-Rule Wrinkle
A contractor buying materials in Denver for a project in Aurora faces a question: which jurisdiction's tax applies at the point of purchase? Colorado uses destination-based sourcing for state-collected taxes, but home-rule cities may use origin-based sourcing. This can create confusion about which rate applies and where to remit.
For contractor-specific guidance across all states, see our construction materials sales tax guide.
Colorado's Sales Tax Lookup Tool
Colorado provides a free Sales Tax Rate Lookup Tool through the Department of Revenue. You can enter an address and get the exact combined tax rate for that location, including state, county, city, and special district components.
Access it at colorado.gov/tax-rate-lookup.
This tool is essential for businesses selling to Colorado customers, especially when shipping to addresses in different jurisdictions.
Filing Requirements
State-Collected Taxes
File through Revenue Online at colorado.gov/revenueonline.
| Monthly Tax Liability | Filing Frequency |
|---|---|
| Over $300/month | Monthly |
| $15 to $300/month | Quarterly |
| Under $15/month | Annually |
Home-Rule City Taxes
File separately with each home-rule city. Filing frequencies and due dates vary by city.
State Return Due Dates
Monthly returns are due on the 20th of the month following the reporting period.
Common Mistakes to Avoid
Mistake 1: Ignoring Home-Rule Cities
The single biggest mistake businesses make in Colorado. If you have nexus in a home-rule city and do not register, you are accumulating penalties and interest that will surface during an audit or when you eventually try to register.
Mistake 2: Using DR 0563 in a Home-Rule City
Some home-rule cities do not accept the state Form DR 0563 and require their own exemption certificate. Check with each city before assuming the state form is sufficient.
Mistake 3: Forgetting the Retail Delivery Fee
This fee is separate from sales tax and catches many businesses off guard. It must be collected on every qualifying delivery.
Mistake 4: Applying a Single Rate Statewide
Colorado does not have a uniform combined rate. Every address has a different rate. Use the state's rate lookup tool for every transaction.
Record Keeping Requirements
Colorado requires businesses to maintain sales tax records for at least 3 years from the date the return was filed or was due, whichever is later. Home-rule cities may have their own retention requirements.
Get Your Colorado Sales Tax License
Colorado's complexity makes professional registration help especially worthwhile. We navigate the state registration, identify which home-rule cities you need to register with, and handle the applications.
Get Your Resale Certificate -->
For full details on Colorado's requirements, visit our Colorado state page.
Colorado rewards businesses that take the time to register correctly. The tax savings on inventory purchases are real, but only if you are properly set up at every level. Get your state license, register with the right home-rule cities, and start purchasing tax-free.
Related Articles
- Retail Delivery Fees and E-Commerce - Understand Colorado's retail delivery fee and how it affects your business.
- Multi-State Resale Certificates - Selling in Colorado and other states? Learn how to manage certificates across multiple jurisdictions.
- How Long Does It Take to Get a Resale Certificate? - Colorado's processing times compared to other states.