How to Calculate Sales Tax in Colorado

The State of Colorado imposes a state sales tax on purchases made within the state. As of 2010, groceries and prescription drugs are exempt from Colorado sales tax. In order to calculate the sales taxes owed on a purchase, you also need to know the local sales tax rate, if any, because some cities and counties impose additional sales taxes. Knowing the amount of sales tax will help you better budget for your purchases.

Difficulty:

Moderately Easy

Instructions

Things You'll Need

• Calculator

1. Look up the local sales tax rate for your Colorado city or county using the Colorado Department of Revenue's website, taxview.state.co.us. For example, the county rate in Bent is 1 percent as of 2010.

2. Add the local sales tax rate to the state sales tax rate. As of 2010, the Colorado sales tax rate equals 2.9 percent. For this example, you would add 1 percent to 2.9 percent to get 3.9 percent.

3. Divide the total sales tax rate by 100 to find the rate expressed as a decimal. In this example, you would divide 3.9 percent by 100 to get 0.039.

4. Multiply the amount of your purchase subject to Colorado sales tax by the sales tax rate expressed as a decimal to find the amount of Colorado sales tax. Finishing the example, if you had $88.50 of taxable purchases, you would multiply $88.50 by 0.039 to find the sales tax to be $3.45.

Tips & Warnings

• Certain special district taxes may apply sales taxes. And some localties such as Boulder assess a sales tax that equals that of the state. Colorado Springs is not far behind at 2.5 percent.

References

• Colorado Department of Revenue: Tax Rates and Information
• Federation of Tax Administrators: State Sales Tax Rates

Resources

• Colorado Department of Revenue: Sales Tax Information System