How to Report Colorado Sales Tax
Colorado imposes sales tax on all purchases made within the state. The sales tax rate in Colorado is 2.9 percent. At the end of each fiscal period, such as a month or a quarter, all vendors across the state must report to the Colorado Department of Revenue on all the taxes accrued. Businesses and vendors need to keep their records clear and concise so they can properly inform the state on all taxes that need to be sent to the state.
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Things You'll Need
- Sales invoices
- Purchase invoices
- Colorado Form DR 0100
- Colorado Form DR 01002
Instructions
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Contact the Department of Revenue in Denver. The Department of Revenue will have the Colorado Form DR 0100 which is the tax form for sales.
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Contact the Department of Revenue for Form DR 1002. DR 1002 lists specific details concerning tax rates and the current tax deductions. Colorado has a number of sales tax deductions that are consistently changing. For example, in 2010, Colorado removed sales tax deductions for candy and soda.
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Hold on to all sales and purchase invoices. The state of Colorado advises businesses to keep such invoices for at least three years, especially if there are taxation issues that could result in an audit.
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Write down your total gross sales and net sales on the sales tax form. The gross sales and net sales amounts must be within the designated fiscal period for the sales tax filing. Even if there are no total gross sales or net sales in the fiscal period for the tax filing in Colorado, you must write a zero (0) on the sales tax form.
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Enter your deductions. The Colorado Department of Revenue offers businesses a variety of tax exemptions and deductions. For example, farmers may receive a deduction on the tax applied in purchasing farming equipment. Tax-deduction information is listed in detail on Form DR 1002.
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Include your business' special tax rate. Colorado has differing tax rates for vendors and businesses based upon their location or service. For example, scientific or cultural vendors as well as businesses near the Denver Broncos football stadium must apply a 0.1 percent tax to their sales. This information is on Form DR 1002 for each tax year.
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Tips & Warnings
Colorado allows each sales tax transaction to be rounded to the nearest 50 cents.
If there seems to be a discrepancy in your tax report, the state of Colorado could audit your business.
If you report your taxes incorrectly and pay less tax than required, the state of Colorado can collect the back tax amount directly from your bank account.
References
- Photo Credit tax time image by Tom Oliveira from Fotolia.com
