Sales Tax FAQ

The sales tax is a transaction tax levied upon sales, purchases, and leases of tangible personal property and taxable services sold or leased by persons engaged in business in the City. The sales tax is collected by the retailer or lessor and remitted to the City.

A sales tax license must be obtained by any person engaged in the business of selling and/or leasing at retail within the City.

Effective 9/1/2023, the City of Colorado Springs Sales Tax Office will no longer impose a license or renewal fee.

Yes. In the search box located in the upper right hand corner of this page type  "SALES TAX ONLINE SERVICES"  this will take you to the hyperlink of our online services where you are able to file a sales tax return or apply for a new sales tax license. 

Yes, you will need a temporary sales tax license. The application for a temporary license  can be mailed to our office along with payment for the license fee and cash deposit. For quicker processing, you can bring the application into our office where we can process it immediately and assign you a temporary license number. A copy of the license should be maintained by the vendor as proof of licensing. The license fee is $20.00. Please call the office to determine the cash deposit amount before mailing. Our mailing address is: Sales Tax Division, P.O. Box 1575, Colorado Springs, CO 80901-1575. Additional questions can be answered by contacting the Sales Tax Department at (719) 385-5903.

City zoning requirements restrict garage sales to two per household per year, and they are limited to two days in length per garage sale. The first $300 of sales per year at a garage sale are exempt from City sales tax. If sales do not exceed $300 in a year, a sales tax license is not required, and City sales tax does not have to be collected.

All returns are due on the 20th of the month following the reporting period. A return must be filed even if there is no liability.

If the return is filed after the 20th you must add a 10 percent penalty and interest at the applicable rate.  Please call 385-5903 for the current interest rate.

If you purchase furniture, fixtures, equipment (not inventory) or supplies for use, storage or consumption in the City without paying the City sales tax you owe a use tax. You owe one or the other, not both. The use tax is paid directly to the City by you, the consumer. For example, if you purchase office supplies from a direct mail catalog company outside the City and the sales tax is not collected by the seller, you must pay use tax directly to the City. Transactions specifically exempt from the City sales tax are also exempt from the City use tax.

Any business that purchases tangible personal property for its own use, storage or consumption without the payment of the City sales tax must apply to the City for a Use Tax Account.

No. The account is free. 

Public Improvement Fees are not a sales tax. They are not administered or collected by the City of Colorado Springs.

Most often PIFs are a private fee that developers require their tenants/retailers to collect from customers. This fee is collected as part of sales transactions and is generally a percentage of the sales amount.  The developer/property owner may normally implement at PIF without municipal approval.

The PIF may be used for any designated purpose but is generally used to pay for infrastructure, on-site improvements, and maintenance (examples: curbs, sidewalks, street lights, parking facilities, roads within the developed area).

Public Improvement Fees must be listed on the sales receipt as a separate line item from the sales tax.

January 1, 2021 to Present - 3.07%   State of Colorado rate is 2.9%. El Paso County rate is 1.23%. Pikes Peak Rural Transportation Authority rate is 1%.  

Generally, you must maintain books and records for a period of 36 months.

No, but the burden of proof of exempt sales rest with you. Religious and charitable organizations within the City are required to have a letter of exemption provided by the City.

Any claims for refund must be made within 36 months from the time the tax was paid.

Yes, all construction materials purchased or used within the City are taxable. There is no exemption for jobs performed for government, religious or charitable organizations, since the contractor and/or subcontractor is the user of all tangible personal property used or consumed with the City. If City sales tax is not paid, City use tax is due.

No, the City does not have an exemption from the sales or use tax in an enterprise zone.

Yes, the sales or use tax is imposed on the full retail selling price of tangible personal property sold after manufacture or after having made to order.

No, if the bill (invoice) separates the parts used and labor expended, the tax may be charged on the parts only. Otherwise, the entire invoice amount is taxable.

If you sell taxable property from your home in the City, you need a sales tax license to collect and remit City sales tax. If you operate a business from your home, you may need a Home Occupation Permit from the City Planning Department. Please call City Planning at (719) 385-5905 before applying for a sales tax license for more information on zoning requirements.

If you sell taxable tangible personal property within the City you need a sales tax license. But, if you operate a temporary business and sell from private property or on the Public Right of Way you must comply with the Temporary Use Regulations in the City code. Please contact the City Planning Office at (719) 385-5905 for more information.