How Colorado Sales Tax Works
Colorado has the lowest state sales tax rate in the continental US at just 2.9%. However, this low state rate is intentionally designed to be supplemented by local governments — and supplement they do. Colorado cities, counties, and special districts layer their own sales taxes on top of the state rate, and these local additions are among the highest in the country. Denver, for example, stacks a city tax, a county tax, a Regional Transportation District tax, a Scientific and Cultural Facilities District tax, and a football stadium tax — all on top of the state's 2.9%, bringing the total to 8.81%. Colorado is also home to an unusual quirk: home-rule cities (like Denver, Boulder, and Colorado Springs) collect and administer their own sales taxes independently from the state. This means if you sell into Denver, you may file a separate return with Denver — not only with the Colorado Department of Revenue.
Resort and Mountain Community Tax Rates
Colorado's mountain resort communities present some of the most complex sales tax situations in the state. Cities like Aspen, Vail, Telluride, Breckenridge, and Steamboat Springs often have combined rates exceeding 9% because they layer additional resort improvement district taxes on top of normal state, county, and city rates. These resort taxes are used to fund tourism infrastructure, open space, and recreation facilities. Aspen's combined rate reaches 9.3%, while Vail sits at approximately 9.4%. For businesses operating in ski resort areas, the tax compliance burden is particularly significant because you may be dealing with home-rule city rules, multiple special district taxes, and different treatment of services versus goods.
What Is Taxable in Colorado
Most tangible personal property — clothing, electronics, furniture, vehicles, and similar goods — is taxable in Colorado. Services are generally not taxable unless specifically enumerated by law. Food for home consumption is subject to the 2.9% state rate but many cities exempt groceries from the local portion, so effective grocery tax rates vary. Prepared foods and restaurant meals are fully taxable at the combined rate. Prescription drugs and medical equipment are exempt. Compliance nuances (home-rule, districts) mean you should always confirm the rate for your address with official sources.
Denver Sales Tax in Detail
Denver deserves special attention because it accounts for a significant portion of Colorado economic activity and is a home-rule city with its own tax administration. Denver's 8.81% combined rate as of 2026 breaks down as: State of Colorado 2.9%, Denver City and County 4.81%, Regional Transportation District (RTD) 1.0%, and Scientific and Cultural Facilities District (SCFD) 0.1%. If you are a business selling in Denver, you may need to register separately with Denver's Treasury Division in addition to registering with the Colorado Department of Revenue.
Aspen, Vail, and Colorado home-rule compliance
Ski towns often exceed 9% because voters approved extra resort or lodging-related levies. For a consumer estimate, choose the closest listed city or paste the exact rate from your Colorado address lookup. Sellers operating in multiple home-rule cities may file in more than one jurisdiction — this page cannot replace Department of Revenue or city treasury guidance, but the calculator helps you sanity-check math for quotes and personal budgeting.