1. Am I required to complete the consumer use tax portion of the individual income tax return?
Leaving that portion of the return blank indicates the taxpayer does not want to use the income tax form to report and remit any consumer use tax liability they may have for the prior year. However leaving it blank does not mean that the taxpayer is formally stating there is no use tax liability. Taxpayers may confidentially and without fear of criminal prosecution report zero on the use tax line of their individual income tax return. The Department's working assumption will be that the taxpayer either had no use tax liability or they chose to report it through one of the other methods available to them.
2. What is the deadline to pay consumer use tax?
Individual consumer use tax is due by the income tax due date for the prior tax year. For example, consumer use tax will be due by April 15, 2021 for 2020 tax year.
3. How do I know if I paid tax on my purchase?
Check your invoice or receipt to see if sales tax was paid. Some online purchases will have sales or use tax included. Many online or out-of-state retailers do not collect sales or use tax from customers on purchases.
4. What is the consumer use tax rate?
The state consumer use tax rate is the same as the state sales tax rate: 2.9%. Consumer Use Tax is also collected by some cities, counties and special districts. Visit the How to Look Up Sales & Use Tax Rates web page to find the use tax rates for each tax district. Be sure to add the rates together to determine the amount of Consumer Use Tax that you owe.
For example, you are building a home in Erie and you purchased specialty lumber from a small supplier and had it delivered to the new home building site. That supplier qualifies for the small business exception and did not collect sales tax. The Erie has a city use tax rate of 3.5% for building materials. The new home is in Boulder County, which has a 0.985% use tax rate for building materials. Colorado has a use tax rate of 2.9% on all tangible goods, including lumber. So, the Consumer Use Tax rate on that lumber would be 7.385%. To determine the amount of Consumer Use Tax you would need to pay in this example, you would multiply the cost of the lumber by 0.07385.
5. How do I file a return and pay consumer use tax?
Taxpayers can elect to voluntarily report their consumer use tax owed to the state and some special districts on the Consumer Use Tax Return (DR 0252), Consumer Use Tax Reporting Schedule (DR0104US) when filing with a individual tax return‚ or via Revenue Online. To find a form to download, print out and mail, visit the Sales & Use Tax Forms web page.
To report via Revenue Online, click on "File a Return" under the Quick Links menu. Then, select "Consumer Use Tax" from the list of options. The tax rates for the taxpayer's residence or business location are built into this service. The easy-to-use system calculates the amount of tax owed based on the purchase total and will help taxpayers avoid calculation errors. The consumer use tax calculations are also built in when taxpayers file their individual income tax return via Revenue Online and enter total purchases that were not taxed.
For more information, visit the Consumer Use Tax Filing Information web page.
6. What is a Special District?
More than half of Colorado residents live in one or more special districts. Most residents of the Denver metropolitan area are within the district boundaries of both the Regional Transportation District (RTD) and the Scientific & Cultural Facilities District (CD). Visit the How To Look Up Sales & Use Tax Rates web page, contact your County Assessor's Office, or view district maps for additional information to determine whether you live within the boundaries of a special district.
7. Are retailers required to report when they do not charge sales tax?
If a taxpayer purchases taxable property over the internet from a retailer that does not collect Colorado sales tax, the retailer is required to:
- Provide a Transactional Notice at the time of sale to Colorado Customers of their responsibility to pay consumer use tax directly to the Colorado Department of Revenue (CDOR).
- Send the taxpayer an Annual Purchase Summary by January 31 listing the purchases they made during the prior year. The Annual Purchase Summary the taxpayer receives will help them in reporting and paying consumer use tax.
- Provide Annual Customer Information Reports to CDOR by March 1 with the total dollar amount of purchases made by each Colorado customer in the prior calendar year. The law prohibits the identification of particular items purchased from retailers.
For more information, visit the Retailer Reporting Requirements web page.
8. I just bought an airplane and the wholesaler/manufacturer did not charge sales tax. Do I need to pay use tax on my airplane?
Yes, when purchasing personal property, including airplanes, the buyer needs to file a Consumer Use Tax Return (DR 0252) if the seller did not collect and remit sales tax for the purchase. The Consumer Use Tax Return can also be filed using Revenue Online. For airplane purchases, the return and the use tax payment are due on or before the 20th of the month following the purchase.
Visit the How To Look Up Sales and Use Tax Rates web page for information on how to determine the applicable use tax rate, which would include state, county, municipal, and special district use tax. Generally, the use tax rate is determined by the location where you took possession of the airplane. Visit the Sales & Use Tax Forms page for a downloadable copy of the DR 0252.