Sales Tax Exemption of Essential Hygiene Products

Beginning January 1, 2023, essential hygiene products are exempted from sales tax. The bill creates a state sales and use tax exemption for all ales, storage, use and consumption of incontinence products, diapers and period products. The bill further provides that statutory cities and counties may choose to adopt either or both exemptions by express inclusion in their sale and use tax ordinance or resolution. Self-collecting home-rule municipalities are not affected by this change. 

The January release of the Colorado Sales and Use Tax Rate publication (DR 1002) will list those state-administered local jurisdictions that will allow the exemption. Local exemptions, including exemptions allowed by self-collecting home-rule municipalities, may also be searched by address using Colorado Sales Tax lookup tool

The bill creating the exemption took effect on August 10, 2022. However, the exemption created by the bill applies to sales on and after January 1, 2023. Sales tax changes commonly start in January or July in order to give the Department and local retailers time to update systems, forms, and documentation.