Groceries in Colorado are mostly not taxed by the state: under C.R.S. § 39-26-707, food for home consumption is exempt from the 2.9% state sales tax, so produce, meat, dairy, bread, eggs, and similar staples ring up without the state’s cut.1Justia Law. Colorado Code 39-26-707 – Food, Meals, Beverages, and Packaging – Definitions The exemption has real limits, though. Candy, soft drinks, prepared foods, and supplements are still taxed, and your city or county can add its own tax on food even when the state doesn’t.
What the State Exemption Actually Covers
Colorado exempts “all sales of food” from its 2.9% state sales tax, and it borrows the federal SNAP definition of food as the baseline: any food or food product for home consumption.1Justia Law. Colorado Code 39-26-707 – Food, Meals, Beverages, and Packaging – Definitions In practice that means fruits, vegetables, meat, poultry, fish, dairy, eggs, bread, cereal, flour, cooking oils, canned goods, frozen meals, and condiments all come home tax-free at the state level.
The state then layers its own exclusions on top. Those exclusions are where most confusion at the register comes from.
Grocery Items That Still Get the 2.9% State Tax
Prepared and Hot Food
Food sold hot, food marketed to be heated in the store, and food meant to be eaten on the premises are taxable at the full state rate.2Colorado Department of Revenue. Taxable and Tax Exempt Sales of Food and Related Items A rotisserie chicken from the deli, a hot slice of pizza, or soup from a warming station all count. The test is whether the item is ready to eat now, not whether you personally plan to eat it later.
Candy
Candy has been subject to the 2.9% state sales tax since May 2010. The statute defines it as sugar, honey, or other sweeteners combined with chocolate, fruit, nuts, or flavorings in bars, drops, or pieces.1Justia Law. Colorado Code 39-26-707 – Food, Meals, Beverages, and Packaging – Definitions
Then comes the wrinkle that catches shoppers and cashiers alike: if a product contains flour, it is not candy under Colorado law, no matter how much it looks and tastes like candy. A Kit Kat has flour in the wafer, so it is exempt food. A plain Hershey bar has no flour, so it is taxable candy. Products that need refrigeration are also excluded from the candy definition. The ingredient label is the only reliable guide.
Soft Drinks
Soft drinks became taxable in 2010 as well. The definition covers nonalcoholic beverages containing natural or artificial sweeteners, so regular soda, sweetened iced tea, sweetened energy drinks, and lemonade all get the state tax.1Justia Law. Colorado Code 39-26-707 – Food, Meals, Beverages, and Packaging – Definitions
Three categories stay exempt inside that definition: drinks containing milk or milk products (including soy and rice substitutes), and any beverage that is more than 50% vegetable or fruit juice by volume. Chocolate milk is exempt. A juice that is mostly juice is exempt. A “fruit drink” that is only 10% juice is a taxable soft drink. Plain sparkling water without sweeteners is also exempt.
Supplements and Alcohol
Vitamins, protein powders, multivitamins, and herbal supplements are not exempt groceries; the Department of Revenue treats them as taxable.2Colorado Department of Revenue. Taxable and Tax Exempt Sales of Food and Related Items Alcoholic beverages are always taxable. One narrow exception: cooking wine, wine vinegar, and alcohol-filled candies are treated as exempt food rather than alcohol.
Why Your Receipt May Still Show Tax on Food
The state exemption only removes the state’s 2.9% share. Colorado cities and counties set their own sales taxes, and they aren’t all required to follow the state’s grocery rule.
Counties and statutory cities generally piggyback on the state’s tax base, so many of them adopt the same food exemption. Many, but not all. They can choose to tax food at their own rate even though the state does not.
Home-rule cities are the bigger variable. These self-governing municipalities set their own tax bases and collect their own taxes, and they are not bound by state exemptions.3Colorado Department of Revenue. Local Government Sales Tax A home-rule city can tax groceries at whatever rate its charter allows, and many do. Two stores on opposite sides of a city boundary can charge different tax on the same loaf of bread.
If you want the exact rate for a specific store, the Colorado Department of Revenue’s Geographic Information System lets you enter an address and see the combined state, county, city, and special district rates.4Colorado Department of Revenue. How to Look Up Location Codes and Tax Rates A tax line on items you expected to be exempt is almost always a local levy, not a state error.
SNAP and WIC Purchases
Paying with SNAP benefits or WIC vouchers changes the outcome. Under C.R.S. § 39-26-707(1)(a) and (1)(b), all food purchased with these benefits is exempt from the state sales tax, including items that would normally be taxable when bought with cash.1Justia Law. Colorado Code 39-26-707 – Food, Meals, Beverages, and Packaging – Definitions A bottle of soda or a bag of candy that would carry 2.9% tax if you paid cash rings up tax-free when paid for with SNAP.2Colorado Department of Revenue. Taxable and Tax Exempt Sales of Food and Related Items
Federal law also prohibits states and localities from taxing SNAP purchases, so local grocery taxes drop off too. In a split transaction, benefits apply to the taxable items first to reduce the taxable portion as much as possible.
Grocery Delivery Orders
Colorado charges a retail delivery fee on deliveries that include at least one taxable item. If every item in your grocery delivery order is exempt, the fee does not apply. Drop one bottle of soda or one bag of candy into an otherwise exempt order and the whole delivery triggers the fee, which is $0.28 from July 2025 through June 2026. It’s a small charge, but it’s one more reason to know which items in your cart are taxable and which aren’t.