As we approach the new year, it’s essential for businesses in Colorado to stay informed about the upcoming changes in sales tax rates. The Colorado Department of Revenue has recently published the local sales and use tax changes that will take effect on January 1, 2025. Staying up to date with the latest sales tax rate changes is vital for businesses in Colorado. By understanding the changes and updating their sales tax rates accordingly, businesses can ensure compliance and avoid penalties. If you have any questions or concerns about the sales tax rate changes, please don’t hesitate to contact our sales and use tax firm for guidance and support.

 State-Administered Local Tax Rate Changes

The state-administered local tax rate changes include rate increases for several jurisdictions. Some of the notable changes include:

1. Arriba: New jurisdiction with a 2% sales tax rate
2. Aspen: Use tax decrease to 2.1%
3. Canon City: Sales and use tax increase to 3.3%
4. Crook: New jurisdiction with a sales tax rate of 2.5%
5. Holly: Sales tax increase to 4%
6. Leadville: New jurisdiction with a 0.5% sales tax rate
7. Superior: Sales and use tax increases to 3.775%

Aside from the sales and use tax rate increases, there are several changes to exemptions which can be found on the Colorado Department of Revenue’s website.

Home Rule Jurisdiction Changes

Home rules jurisdictions in Colorado have the authority to administer their own sales and use taxes. The following home rule jurisdictions have changes effective January 1, 2025:

1. Castle Rock: Sales and use tax rate increase to 4.2%
2. Denver: Sales and use tax rate increase from 4.81% to 5.15%
3. Glenwood Springs: Sales and use tax rate increased to 4.2%

Changes to Self-collecting home-rule jurisdictions:

• Aspen will be State Collected effective 1/1/2025
• Monument is now a Self-Collected City effective 1/1/2025. The current sales tax rate is 3.50%

Impact on Businesses

These changes will impact businesses operating in the affected jurisdictions, and they must update their sales tax rates to ensure compliance. Failure to do so may result in penalties and fines. It’s crucial for businesses to review their sales tax obligations and make the necessary adjustments to avoid any potential issues.

Additional Resources

For a comprehensive list of tax rate changes, you can visit the Colorado Department of Revenue’s website and access the printable list of tax rate changes, found here: https://tax.colorado.gov/sales-tax-rate-changes

Please let us know if we can help simplify your sales tax compliance. Contact us to schedule a free 30-minute consultation.