Colorado Sales Tax for Online and Out-of-State Sellers: $100,000 Nexus, Home-Rule Cities and the Retail Delivery Fee
Colorado Sales Tax for Online and Out-of-State Sellers: $100,000 Nexus, Home-Rule Cities and the Retail Delivery Fee
If you sell products online and ship them to Colorado customers from outside the state, you may owe Colorado sales tax even if you have no office, warehouse or employees here. Colorado applies a colorado economic nexus rule: once your retail sales into the state cross a dollar threshold, you must collect and remit tax. The rule is simple on paper, but three details catch sellers: the threshold can be triggered two different ways, home-rule cities run their own sales tax systems, and a separate per-delivery retail delivery fee can apply on top of sales tax.
This guide walks through each piece so you can decide what to register for and which points to confirm with the agencies that enforce the rules.
Informational content only. This article is general information, not legal or tax advice. Tax rules change, and your situation may involve rules not covered here. Talk with a qualified CPA or tax attorney before you make filing decisions, especially if you sell into several states.
How Colorado Economic Nexus Works
Colorado's economic nexus test for remote sellers is based on sales dollars. It is not based on transaction count, and it does not require a physical presence in the state. Under C.R.S. 39-26-102(3)(c)(I), a remote seller must collect and remit Colorado sales tax once its retail sales into Colorado exceed $100,000. The threshold can be reached in either of two ways:
- Previous year test: your Colorado retail sales in the previous calendar year exceeded $100,000.
- Current year test: your Colorado retail sales in the current calendar year exceed $100,000. Collection then starts on the first day of the month after the 90th day after you crossed the line.
Here is how the current year test plays out. Suppose your store passes $100,000 in Colorado sales on June 1. The 90th day after June 1 is August 30, so collection starts on September 1. Sales made before that date still count toward the threshold, but the collection obligation begins on the start date. A seller who waits for year-end totals can miss that window, so track running totals throughout the year.
There is no transaction count test. A seller with 40 large orders and a seller with 4,000 small orders are treated the same if their dollar totals match. What matters is the total dollar value of retail sales into Colorado.
Marketplace Facilitators and Marketplace Sellers
If you sell through a large online marketplace, the nexus math changes. A marketplace facilitator counts all sales made through its marketplace toward its own Colorado threshold. A marketplace seller excludes those sales from its own total. This treatment has applied since October 1, 2019.
Many sellers use both a marketplace and their own website. Keep those two sales streams in separate columns in your bookkeeping. Your direct sales count toward your $100,000 total, while sales made through the marketplace do not count toward your total for this purpose.
Colorado Rules at a Glance
| Item | Rule or figure | Where to confirm |
|---|---|---|
| Remote seller threshold | More than $100,000 in Colorado retail sales (previous year or current year test) | C.R.S. 39-26-102(3)(c)(I); tax.colorado.gov |
| Transaction count test | None | Not applicable |
| State sales tax rate | 2.9% plus special district taxes | tax.colorado.gov |
| Marketplace sales | Counted by the facilitator; excluded by the marketplace seller (since October 1, 2019) | tax.colorado.gov |
| Retail delivery fee | $0.31 per delivery from July 1, 2026 to June 30, 2027 (was $0.28) | Department of Revenue, C.R.S. 43-4-218 |
| Retail delivery fee exemption | Prior-year Colorado retail sales of $500,000 or less | Department of Revenue retail delivery fee page |
| LLC Articles of Organization | $50 filing fee | Secretary of State online filing |
| Periodic Report | $25 per year; none due in an entity's first year | Secretary of State |
The State Sales Tax License and What It Covers
Colorado has no general state business license. Your entity is formed with the Colorado Secretary of State. If you collect or withhold tax, you open an account with the Colorado Department of Revenue, Taxation Division. Once your sales reach the nexus threshold, you need a sales tax license, and most sellers of tangible goods do.
The state sales tax rate is 2.9%, plus any special district taxes that apply where the buyer receives the goods. The state license covers the state tax and the local taxes the state collects. It does not cover every local tax in Colorado. Apply through the Department of Revenue at the sales tax license page. Confirm the current license fee, the filing frequency your sales volume triggers, and the start date for your first return with the Department of Revenue, because this guide does not state those figures.
Home-Rule Cities Collect Their Own Tax
This is where many out-of-state sellers get caught. Several dozen Colorado home-rule cities collect and license their own city sales tax instead of relying on the state to do it. Denver, Aurora, Colorado Springs, Boulder and Fort Collins are examples. The state sales tax license does not cover these cities.
A seller shipping into a home-rule city needs a separate city account. You can register directly with the city, or in some cases through the state's SUTS portal. Home-rule cities may also apply their own nexus tests, and those tests can differ from the state's $100,000 rule. Check each city's rules with its finance or tax office before you assume the state license is enough. If your sales reach a home-rule city, you may have a filing obligation there even if your statewide total looks small.
The Retail Delivery Fee
Colorado also charges a retail delivery fee. It is a single combined fee per delivery made by motor vehicle to a Colorado location when that delivery includes at least one taxable item. For July 1, 2026 to June 30, 2027, the fee is $0.31 per delivery, up from $0.28. The Department of Revenue sets the fee under C.R.S. 43-4-218.
The retailer is liable for the fee. You may pass it to the buyer as a separate charge, or you may absorb it. Either choice affects your checkout display and your margins, so decide before you turn on Colorado shipping.
Businesses with $500,000 or less in prior-year Colorado retail sales are exempt. Check the Department of Revenue's retail delivery fee page at tax.colorado.gov to confirm how the exemption is measured and how the fee is reported, because those details are not covered in this guide.
Services Are Generally Not Subject to Sales Tax
Services are generally not subject to the Colorado state sales tax. A consultant who sells only advisory work usually has no sales tax collection duty for that work. Sales of tangible goods are the core of the obligation. Bundled offers, such as a product sold together with installation, need a closer look. Confirm the treatment of any bundle with the Department of Revenue before you price it.
Steps to Take Now
- Pull your Colorado sales totals for the previous calendar year and for the current year to date, with marketplace and direct sales in separate columns.
- If either test is met or close to being met, open a Department of Revenue account and apply for a sales tax license.
- List every Colorado city where you ship, confirm which ones are home-rule cities, and set up city accounts where required.
- Decide whether to pass the retail delivery fee to buyers or absorb it, confirm whether your prior-year Colorado sales qualify for the $500,000 exemption, and build the charge into checkout if it applies.
- If you sell under a name other than your legal name, file a Statement of Trade Name with the Secretary of State. It costs $20 to file online and $5 to renew. Trade names are filed statewide with the Secretary of State, not with the county. Search the business database at the Secretary of State search page before you choose a name.
- If you are forming a new LLC, file the Articles of Organization online for $50. Online filings are processed in real time. A new LLC owes no Periodic Report in its first year. After that, the $25 report is due in the entity's periodic report month each year.
Common Mistakes to Avoid
- Assuming the state license covers Denver or Boulder. It does not. Those cities collect their own tax.
- Counting marketplace sales toward your own threshold. Sales made through a marketplace facilitator are counted by the facilitator, not by you.
- Waiting for year-end totals. The current year test can start collection partway through the year.
- Forgetting the retail delivery fee. It applies to deliveries by motor vehicle that include at least one taxable item, and you are liable for it even if you absorb the cost.
- Relying on transaction counts. Colorado's test is dollar based, so a low order count does not protect you.
Where to Confirm Current Rules
Rules and figures change, so confirm the details that matter to your business before you file. Use the Department of Revenue at tax.colorado.gov for sales tax, the license, and the retail delivery fee. Use each home-rule city's finance or tax office for local collection. Use the Secretary of State at coloradosos.gov for entity filings and trade names. The Colorado Small Business Development Center Network at sbdc.colorado.gov can help you work through the basics.
For sellers who ship into several states, a CPA or tax attorney can help you line up Colorado's obligations with the rules in your other states. This guide is informational only and is not legal or tax advice.