Retail Marijuana Delivery Sales Tax

How to Determine Sales Tax for Retail Marijuana Delivery Sales

State and local sales taxes are generally determined at the point of delivery, not the location where the retail marijuana store is located. For example, if a retail marijuana store with a delivery permit is located in municipality A, and delivers retail marijuana to a consumer in municipality B, the tax is collected at the rate established by municipality B. (§ 39-26-104(3), C.R.S.). Home-rule cities that administer their own sales taxes may establish their own rules and should be contacted directly for additional information.

How to Collect and Report Retail Marijuana Delivery Sales

A retail marijuana business is required to obtain a sales tax license for each retail marijuana store it operates (called a physical location). Additionally, a retail marijuana store that delivers retail marijuana to consumers at their homes, either by employees of the retail marijuana store or by a courier, must add a non-physical location to their account for each tax jurisdiction where retail marijuana is delivered. 

Even if the retailer has a physical location in the same tax jurisdiction, a non-physical location is required for deliveries. A retail marijuana store that delivers to consumers at their homes must file separate returns for each physical location and each non-physical location. A separate Retail Marijuana Sales Tax return and Colorado Retail Sales Tax (DR 0100) return are required for each physical and non-physical location. Self-collecting, home rule jurisdictions may establish their own regulation and should be contacted directly for more information about filing and remitting sales tax in their jurisdiction.

The Geographic Information System (GIS) is available to assist retailers with determining the tax jurisdiction(s) and calculating appropriate general sales tax rates for individual addresses. The GIS does not currently provide information on the state retail marijuana sales tax or any special marijuana sales taxes imposed by local jurisdictions.  If you need additional assistance with adding a non-physical location through your Revenue Online account, send an email to DOR_ExciseTax@state.co.us to request the addition of a non-physical site. Be sure to provide the jurisdiction code from the GIS to ensure the correct jurisdiction code is assigned. Visit the Add Locations to Your Account web page for additional information about physical and non-physical locations.

Before collecting and remitting tax on retail marijuana delivery sales, review the instructions on how to add a non-physical location for each jurisdiction where you made retail marijuana delivery sales Sales Tax Return and Retail Marijuana Sales Tax Return.