About the Carryout Bag Fee
In 2021, the Colorado General Assembly enacted House Bill 21-1162. Beginning January 1, 2024, the act prohibits stores and retail food establishments from providing single-use plastic carryout bags to customers. Certain retail food establishments, and small stores that operate solely in Colorado and have 3 or fewer locations, may provide single-use plastic carryout bags.
Between January 1, 2023, and January 1, 2024, a store may furnish a recycled paper carryout bag or a single-use plastic carryout bag to a customer at the point of sale if the customer pays a fee of 10 cents per bag or a higher fee adopted by the municipality or county in which the store is located. On and after January 1, 2024, a store may furnish only a recycled paper carryout bag to a customer at the point of sale at a fee of 10 cents per bag or a higher fee imposed by the municipality or county in which the store is located.
A store is required to remit, on a quarterly basis beginning April 1, 2024, 60% of the carryout bag fee revenues to the municipality or county within which the store is located and may retain the remaining 40% of the carryout bag fee revenues.
The carryout bag fee does not apply to a customer that provides evidence to the store that the customer is a participant in a federal or state food assistance program.
The act does not apply to materials used in the packaging of pharmaceutical drugs, medical devices, or dietary supplements or any equipment or materials used to manufacture pharmaceutical drugs, medical devices, or dietary supplements.
Please review the full text of HB21-1162 for a complete discussion of the requirements, restrictions, and penalties imposed under the act.
Frequently Asked Questions
No, the carryout bag fee is not collected or administered by the Colorado Department of Revenue. Section 25-17-505(3)(d), C.R.S., requires that stores remit the carryout bag fee to the finance department or division or equivalent agency of the municipality within which the store is located. If the store is not located within a municipality, the carryout bag fee must be remitted to the finance department or division or equivalent agency of the county in which the store is located.
At this time, the carryout bag fee cannot be paid through the Sale and Use Tax System (SUTS).
Section 25-17-505(3)(d), C.R.S., requires that stores remit the carryout bag fee to the finance department or division or equivalent agency of the municipality within which the store is located. If the store is not located within a municipality, the carryout bag fee must be remitted to the finance department or division or equivalent agency of the county in which the store is located. Contact these agencies for more information on how to remit the fee.
The fee is not subject to state and state-administered local sales tax. The Colorado Department of Revenue does not collect sales and use taxes for certain home-rule municipalities. You will need to contact these self-collecting home-rule municipalities directly to determine whether these fees are subject to their local sales tax. For a complete listing of jurisdictions, including state-administered jurisdictions and self-collecting home-rule municipalities, please refer to Department Publication DR 1002.