Buying a Business
If you are buying a business, you may request a "Tax Status Letter" from the Department of Revenue. The letter indicates the Department's current information regarding where the business stands with tax payments and tax delinquencies. Complete a Request for a "Tax Status Letter" (DR 0096). The fee is $7 per tax. The seller of the business may request the letter for the buyer or the buyer may request the letter with a power of attorney from the seller.
Purchase of a Retail Business
The retailer purchasing the business assumes the liability for any sales taxes due, but not paid by the prior owner. If a retailer selling their business does not collect and remit the required sales tax due for any tangible personal property, other than inventory, transferred to the purchaser as part of the sale, the retailer purchasing the business assets assumes the liability for the unpaid tax.
Anyone who purchases an existing retail business must withhold from amounts paid to the seller sufficient purchase money to cover any and all outstanding taxes the seller owes until the seller provides a tax status letter from the Department showing that all taxes due have been paid. The seller may request a tax status letter by submitting a completed form DR 0096 to the Department along with the required fee.
Form DR 0155 is used to report and pay the sales tax on tangible personal property (other than resale inventory) acquired as part of the purchase of an existing retail business. The retailer who purchases the business may file this form to remit the sales tax due for the tangible personal property acquired as part of the sale. The sales tax is due by the 20th day of the month following the month in which the business assets were sold.
Other Business Purchases
If the business purchased was not a retail business, the purchaser is liable for use tax on the purchase price paid for any tangible personal property acquired. Consumer use tax is reported on form DR 0252. If the business purchased was located within a rural transportation authority (RTA), the purchaser must also file form DR 0251. You can search for the applicable jurisdictions by address at Tax.Colorado.gov/GIS.