What is Use Tax?
Use tax is a tax on the storage, use or other consumption of tangible personal property and certain taxable services in Colorado. The tax is a complement to the Colorado state sales tax. In general, if you have paid Colorado state sales tax on an item, then you do not owe Colorado state use tax. If you have not paid Colorado state sales tax, then you have a responsibility to remit Colorado state use tax directly to the State.
Colorado adopted a Use Tax in 1937. Consumer use tax must be paid by individuals and businesses for tangible personal property used in Colorado for personal or business purposes (not to be resold) when tax was not paid at the time of purchase.
For example: As a business owner, you may have purchased an item from someone out of state that you plan to use in your business (like a new custom-made desk or work table). If this item was not taxed when you made the purchase and since it is not going to be re-sold, you (the business owner) would owe Use Tax.
For more information on Use Tax visit this Colorado Department of Revenue website.
How to Report and Pay Consumer Use Tax for Businesses
The due date for businesses and other legal entities that owe consumer use tax depends upon the amount of use tax owed. If the business or other legal entity accrues less than $300 of total consumer use tax over the course of a year, the business or other legal entity must file an annual use tax return, due January 20th of the following year, to report and pay the tax due. If the cumulative tax due at the end of any month is in excess of $300, the business or legal entity must file a return by the 20th day of the following month. The business or legal entity can either file electronically at Colorado.gov/RevenueOnline or by completing and submitting a Consumer Use Tax Return.
