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Old 08-28-2007, 12:28 PM
 
18 posts, read 157,753 times
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I am wondering if someone can clarify the sales tax that you pay in Denver. My research shows a state sales tax of 2.9%. I also found this information from the Colorado Dept of Revenue web site:

The City and County of Denver has a general sales tax of 3.62%, a 4.0% sales tax on food and liquor for immediate consumption, and a 7.25% sales tax on the rental of automobiles for less than 30 days. Please note that this is a Home Rule City. Denver is located in the Regional Transportation District, which has a sales and use tax of 1.0%, the Scientific and Cultural Facilities District with sales and use tax of .1%, and the Football Stadium District with a .1% sales and use tax.

Does this mean that if you buy something in Denver, you pay the state sales tax of 2.9% plus the Denver sales tax of 3.62% plus the RTD sales tax of 1% plus the other two taxes of .1% for a total sales tax of 7.72%?

Also, regarding the ownership tax for vehicles, is this an annual tax that must be paid at the time of registration, or is it a one time tax that is paid when you register the vehicle?
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Old 08-28-2007, 01:50 PM
 
Location: Denver
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Sounds right - and if it is it's low compared to Longmont.
The ownership tax is paid yearly at registration.
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Old 08-28-2007, 03:04 PM
 
Location: Highlands Ranch, CO
615 posts, read 2,893,429 times
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Sales tax in Colorado is overly complex. You do have to add up the state, county, city, local, and special district taxes to arrive at the sales tax. If you are a business owner and ship your products to the customer then it is even more complex, since sales tax is based on where the customer takes delivery. You can't really go by zip code, since some zip codes overlap cities. You can't go by city in some cases, since parts of some cities are not subject to the special district taxes. Some cites have taxes, some do not. If it is a "home rule" city, then business owners have to pay taxes directly to that city as well as the CO Dept of Revenue.

If you are making big purchases, it helps to know where you can save some money on sales tax. Like, here in Highlands Ranch, we are in an unicorporated part of Douglas County, so we do not pay any city tax. We pay the CO state tax (2.9%) + Douglas County tax (1.0%) + RTD/CD/FD taxes (1.2%), for a total of 5.1%. If Denver is 7.72%, then that can save you some quite a bit on larger purchases. Though, motor vehicles are excluded from this, so you pay sales tax based on where you live, not where you took delivery.

The CO Dept of Revenue does have classes on how to figure out sales tax. It is helpful, but it is still too confusing of a system. I think they (state, counties and cities) miss out on a lot of tax money, because the system is too complex for business owners to figure out. When I lived in CA, I just charged a straight 7.75% for any CA resident and submitted that to the state. It was much simpler.

On motor vehicle registration, you do pay each year, but the fee does go down over time, as your vehicle gets older. Of course, there is the sales tax on it as well, but that is a one time payment.

Last edited by gpraceman; 08-28-2007 at 03:17 PM..
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Old 08-28-2007, 03:51 PM
 
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Well I am looking to move to Colorado (I will not be owning a business here just living here) so I am trying to figure all of this out. I currently live in PA and the sales tax system is much simpler. You pay 6% anywhere in the state except in Allegheny county (Pittsburgh) and Philadelphia county where you pay an additional 1% sales tax. This is why I assumed that you would have to add everything up to get to the actual sales tax number.

What about a local income tax or "city wage tax" for Denver residents? I didn't find anything so I assume that there isn't one. If so, this is a nice bonus over Philly, because if you live in the city you pay a local tax of 4.3% on top of your state income tax of 3.07%. As a matter of fact, if you think that the CO sales tax system is screwed up then you should look at PA's local income tax system. I believe there are 540 municipalities that collect local tax in PA, more than every other state combined. It gets really cumbersome and confusing - I know since I am a tax accountant.
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Old 08-30-2007, 01:41 PM
 
11,715 posts, read 38,494,197 times
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I've looked into the Colorado sales tax system and it does indeed look like a confusing mess. I run a small mobile business doing mostly service work but I do sell some parts. I'm trying to decide how to handle sales tax. I really don't want to have to obtain 20+ permits (and file 20+ returns) for every sales tax collecting entity in the Denver metro area that I might happen to do business in 1-2x a year and sell a stinkin' $6 USB cable in. The paperwork could turn into a full time job. I guess I could just pay tax when I purchase it but I don't think that would be 100% legal even then.
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Old 08-30-2007, 02:53 PM
 
Location: Highlands Ranch, CO
615 posts, read 2,893,429 times
Reputation: 175
Quote:
Originally Posted by EscapeCalifornia View Post
I've looked into the Colorado sales tax system and it does indeed look like a confusing mess. I run a small mobile business doing mostly service work but I do sell some parts. I'm trying to decide how to handle sales tax. I really don't want to have to obtain 20+ permits (and file 20+ returns) for every sales tax collecting entity in the Denver metro area that I might happen to do business in 1-2x a year and sell a stinkin' $6 USB cable in. The paperwork could turn into a full time job. I guess I could just pay tax when I purchase it but I don't think that would be 100% legal even then.
It is confusing, and I do think that there are a lot of taxes that go uncollected because business owners don't want to deal with the hassle. It really only affects those that deliver goods to the customer or perform a service at the customer's location. For a storefront, you just charge a single rate. I have an internet business, but fortunately most of my sales are out of state. For my sales in CO, it is a hassle to fill out the return form. I basically go by zip code. It is not a 100% reliable way of doing things, but it is the closest way that I have found.

You'd think they would have some computer program out there that business owners could use. There isn't as far as I can tell.
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Old 08-30-2007, 03:47 PM
 
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Quote:
Originally Posted by gpraceman View Post
You'd think they would have some computer program out there that business owners could use. There isn't as far as I can tell.
There probably is some module for the high end accounting programs that does it but I use QuickBooks. And any computer based system wouldn't be practical for me unless I want to waste time booting up my laptop every to figure out the sales tax every time I write up an invoice in the field. I don't know how reliable it would be to ask the customer what their tax district(s) are because either they won't know or might lie to get a cheaper rate.
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Old 08-30-2007, 03:59 PM
 
Location: Highlands Ranch, CO
615 posts, read 2,893,429 times
Reputation: 175
Quote:
Originally Posted by EscapeCalifornia View Post
There probably is some module for the high end accounting programs that does it but I use QuickBooks. And any computer based system wouldn't be practical for me unless I want to waste time booting up my laptop every to figure out the sales tax every time I write up an invoice in the field. I don't know how reliable it would be to ask the customer what their tax district(s) are because either they won't know or might lie to get a cheaper rate.
The CO Dept or Revenue does have their "Colorado Sales/Use Tax Rates" guide the summarizes the state, county, city and special district taxes. It is about 4 pages. It may be available on their website. Keep a copy of that on hand and you can quickly calculate the appropriate tax.

I would recommend going to the class that the CO Dept of Revenue provides. It is free and can help alleviate some of the confusion.
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Old 08-30-2007, 04:04 PM
 
11,715 posts, read 38,494,197 times
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Quote:
Originally Posted by gpraceman View Post
The CO Dept or Revenue does have their "Colorado Sales/Use Tax Rates" guide the summarizes the state, county, city and special district taxes. It is about 4 pages. It may be available on their website. Keep a copy of that on hand and you can quickly calculate the appropriate tax.

I would recommend going to the class that the CO Dept of Revenue provides. It is free and can help alleviate some of the confusion.
Thanks. I've seen the rate sheet but it was a bit overwhelming. I'll check out the class when I get closer to moving.
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Old 12-19-2007, 01:20 PM
 
1 posts, read 26,729 times
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Default Does Anyone Have Zip Codes For Special Tax Distrcits

Quote:
Originally Posted by gpraceman View Post
It is confusing, and I do think that there are a lot of taxes that go uncollected because business owners don't want to deal with the hassle. It really only affects those that deliver goods to the customer or perform a service at the customer's location. For a storefront, you just charge a single rate. I have an internet business, but fortunately most of my sales are out of state. For my sales in CO, it is a hassle to fill out the return form. I basically go by zip code. It is not a 100% reliable way of doing things, but it is the closest way that I have found.

You'd think they would have some computer program out there that business owners could use. There isn't as far as I can tell.
I am opening an internet business in January 2008. The business is located in the following special tax districts: RTD, FD, and CD. The colorado sales use rates schedule descibes the boundaries of these districts, but does not outline a list of cities, or zipcodes. I realize there is no eazy way to do this, but a rough zipcode definition of the districts would sure make it easier to "try and do the right thing". Has anyone come up with a list I could use?
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