Colorado State Tax Updates

Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Colorado.

March 2, 2026

Colorado Releases Guidance on Partnership Audit Adjustments

Authored by: Bonnie Susmano, JD, MBA and Katerine Velasquez

The Colorado Department of Revenue has issued guidance outlining the state income tax responsibilities of partnerships that are subject to final federal audit adjustments. The guidance explains the options available to an audited partnership for reporting and paying the resulting Colorado tax.

Under the guidance, a partnership may make an irrevocable election to satisfy the tax liability at the entity level or, alternatively, to pass the federal adjustments through to its partners. When a partnership elects to pay at the entity level, it must remit an “in lieu of” tax amount calculated by combining the applicable Colorado tax across five distinct partner categories. If the partnership instead defers the adjustments, each affected partner is generally required to file an amended Colorado income tax return within 180 days of the final federal determination.
Regardless of the election made, the partnership is required to submit a Partnership Federal Adjustments Report to the Colorado Department of Revenue within 90 days of the final determination date.

If you have any questions, please reach out to a member of the Withum SALT Team.

March 2, 2026

Colorado Adopts New Electronic Filing Rules

Authored by: Bonnie Susmano, JD, MBA and Katerine Velasquez

On February 24, 2026, the Colorado Department of Revenue adopted 12 new rules expanding mandatory electronic filing and payment requirements for various state and local taxes and fees. The changes are intended to modernize tax administration and eliminate outdated payment methods.

Key updates include clarified thresholds for monthly sales tax filing and the removal of requirements tied to the Department’s discontinued ACH debit program. Several rules now require electronic filing and payment based on activity levels, such as annual gross sales, gallons sold, miles traveled, or days subject to fees.

Taxes and fees impacted include retail sales tax, aviation fuel sales tax, motor fuel tax, alcohol beverages excise tax (including winery direct shippers), oil and gas severance tax withholding statements, county lodging tax, local marketing and promotion tax, public utilities administration fees, and daily vehicle rental and congestion impact fees.

Taxpayers affected by these rules should review the new thresholds to ensure compliance with Colorado’s electronic filing and payment requirements.

If you have any questions, please reach out to a member of the Withum SALT Team.

September 1, 2025

Colorado Eliminates Sales Tax Vendor Fee (Effective January 1, 2026)

Authored by: Bonnie Susmano, JD, MBA and Joe Petrucci

Beginning January 1, 2026, Colorado will eliminate the sales tax vendor fee—the small percentage of state sales tax collections that retailers have historically been authorized to retain as compensation for collecting and remitting the tax. This change means retailers will be required to remit 100% of the state sales tax collected, with no vendor allowance. The legislation was signed into law on August 28, 2025.

Retailers are encouraged to review their current sales tax procedures and consult with Withum’s SALT team to ensure full compliance with the updated requirements. Further information and guidance from the Colorado Department of Revenue are expected to be released prior to the effective date. Withum will keep you updated.

If you have questions about state sales tax vendor allowances, please reach out to a member of the Withum SALT Team.

May 6, 2025

Colorado Sets Retail Delivery Fees

Authored by: Chao Zhang, MSA and Bonnie Susmano, JD, MBA

The Colorado Department of Revenue has set the aggregate statewide retail delivery fee from July 1, 2025, through June 30, 2026, at $0.28 per delivery, a lower figure from the $0.29 fee set in the 2024–2025 period. The fee consists of six component assessments and applies to deliveries of motor vehicles to Colorado addresses containing at least one item of tangible personal property subject to state sales or use tax. (Retail Delivery Fee, Colo. Dept. of Rev., April 24, 2025.)

If you have any questions about retail delivery fees, please reach out to a member of the Withum SALT Team.

February 25, 2025

Colorado Issues Revised Information on Sales and Use Tax Exemptions for Precious Metal Bullion and Coins

Authored by: Brandon Spinella and Penny Sweeting, CPA

On February 1, 2025, the Colorado Department of Revenue provided revised information about sales tax exemptions for coins and precious metal bullion. The DOR stated that the sale, storage, use, or consumption of coins and precious metal bullion are exempt from state and state-administered local sales and use taxes. Other numismatic items that are not coins or precious metal bullion are not exempt from sales and use taxes. Numismatic items include paper money, tokens, checks, and wampum. Coins qualify for exemption if they meet all the following criteria:

The coins are monetized bullion or other forms of money.
The coins are manufactured from gold, silver, platinum, palladium, or other such metals.
The coins are designated as a medium of exchange under the laws of this state, the United States, or any foreign nation.

If you have questions about sales tax exemption, please reach out to a member of the Withum SALT Team.

November 4, 2024

Denver Voters Presented With Ballot Measures Increasing Local Sales Taxes

Authored by: Emilia Jarrin and Katie Nguyen, CPA

Denver voters will be presented with two ballot proposals increasing local sales taxes:

Ballot Issue 2Q proposes to increase the local Denver sales tax rate by 0.34%. The additional sales tax is dedicated to increase funding for the city’s public hospital, Denver Health. The proposal estimates that the 0.34% rate increase would raise an additional $70 million per year for Denver Health.
Ballot issue 2R proposes a 0.5% sales tax increase dedicated to increase affordable housing. The Proposal estimates that the 0.5% sales tax increase would raise $100 million per year which would allow the city to build 44,000 affordable housing units over 10 years.

Presently, the Denver sales tax rate is 8.81%. If both ballot initiatives pass, the Denver sales tax rate will increase to 9.65%. This would make the Denver sales tax rate one of the highest in the nation.

If you have questions about local sales taxes, please reach out to a member of the Withum SALT Team.

Disclaimer: Please note that this information is readily available at this time and is subject to change, so please consult your Withum tax advisor.