Colorado Sales Tax License: Costs, Applying, and Renewal

To sell tangible personal property in Colorado, you need a Colorado sales tax license from the Department of Revenue before your first sale. You apply online through the MyBiz Colorado portal, pay a prorated fee based on when in the two-year cycle you apply, and put down a one-time $50 deposit that gets refunded automatically once you’ve remitted $50 in state sales tax.¹² The state license is only part of the picture in Colorado, though, and the local piece is where new business owners most often get tripped up.

Who Needs One

The license requirement covers any business that sells, rents, or leases tangible personal property at retail in Colorado, whether from a storefront, a booth at a craft fair, or an online shop shipping into the state. Services are generally not subject to Colorado sales tax.¹

You don’t need a physical presence in the state to owe Colorado sales tax. Out-of-state retailers must begin collecting once their retail sales into Colorado exceed $100,000 in the current or prior calendar year.³

One boundary worth naming: if you sell only through a marketplace like Amazon, Etsy, or eBay, you likely don’t need your own license. Marketplace facilitators are required to collect and remit sales tax on transactions made through their platforms. But the moment you also sell through your own website or a physical store, you become a multichannel seller and need a license, collection, and returns for the sales the marketplace doesn’t handle.⁴

What It Costs

The standard retail license is valid through December 31 of the next odd-numbered year, and the fee is prorated based on when you apply:²

January–June of an even year (2026): $16
July–December of an even year (2026): $12
January–June of an odd year (2027): $8
July–December of an odd year (2027): $4

New accounts also submit a one-time $50 deposit with the application. The deposit is refunded automatically once your business has collected and remitted $50 in state sales tax, so don’t try to deduct it on a return. It applies only to your first business location.² A new business applying in the first half of 2026 pays $66 per location.

If you only sell at farmers’ markets, festivals, or craft shows, a special event license is a lighter option. Single-event licenses cost $8; a multiple-event license costs $16 on the same proration schedule. Holders of a standard retail license get special event licenses for free.⁵

How to Apply

Before opening the application, gather:

Business legal name and any trade name (DBA)
Physical and mailing addresses
EIN, or Social Security number for sole proprietors
Entity type (sole proprietorship, LLC, corporation, partnership)
Business start date
A description of the goods you plan to sell

Submit the application through the MyBiz Colorado portal. Online applicants typically receive a sales tax account number the same day, plus temporary license details so you can begin collecting right away. Paper applications are still accepted but take two to three weeks for the physical license to arrive.¹ Colorado law requires you to post the license in a conspicuous place at your business location.⁶

The Local License Trap

Your state license covers state tax and taxes for state-collected local jurisdictions. It does not cover “home-rule” cities, which administer and collect their own sales tax independently. If you have a physical location or make sales in a home-rule city, expect to register separately with that city, using its own forms and paying its own fees.⁷

Some home-rule cities have joined the state’s Sales and Use Tax System (SUTS), which lets you register and file for participating cities through a single state-run portal. Others have not, and you’ll need to work directly with those cities. Check the SUTS participating jurisdictions list first; the Department of Revenue’s DR 1002 lists contact information for each home-rule jurisdiction.⁸ Some cities require a separate license for each business location within their limits.

Getting the state license feels like the finish line, but skipping a required local registration means you’re collecting less tax per transaction than you actually owe, and you’ll be personally liable for the difference.

Filing After You’re Licensed

Filing frequency depends on how much sales tax you collect each month:⁹

$600 or more per month: file monthly, due the 20th of the following month.
Under $600 per month: file quarterly, due the 20th of the month after the quarter ends (April 20, July 20, October 20, January 20).
$15 or less per month: file annually, due January 20.

If the 20th falls on a weekend or holiday, the deadline moves to the next business day. File every period even if you made zero sales; skipping a zero-dollar return is one of the easiest ways to trigger penalties.⁹

One change to know: as of January 1, 2026, retailers may no longer retain the state sales tax service fee that previously compensated them for collection costs. Every dollar of state sales tax you collect must be remitted. Some local jurisdictions may still offer their own vendor discounts, so check with each municipality where you file.¹⁰

Renewal

All Colorado sales tax licenses expire December 31 of odd-numbered years. The renewal fee is $16 per physical license location. The Department of Revenue mails renewal notices based on the business information it has on file, but the responsibility to renew on time is yours. A license that isn’t renewed, or that contains outdated information, is not valid, meaning you’re operating unlicensed until you fix it.¹¹ The next renewal deadline is December 31, 2027.

Penalties for Getting It Wrong

Making retail sales without a valid sales tax license is a class 3 misdemeanor in Colorado. The Department of Revenue can also impose a civil penalty of $50 per day, capped at $1,000, and can revoke a license after notice and a hearing.⁶

Late filing or late payment carries a penalty equal to the greater of $15 or 10% of the unpaid tax, plus an additional 0.5% per month the balance remains outstanding, capped at 18% total. For 2026, interest accrues at 8% if you pay within 30 days of a deficiency notice and jumps to 11% after that.¹² Filing on time, even with nothing owed, is always cheaper than cleaning up penalties later.

1
Colorado Department of Revenue – Taxation. How to Apply for a Colorado Sales Tax License
2
Department of Revenue – Taxation. Standard Retail License – Section: License Fees
3
Colorado Department of Revenue. Out-of-State Businesses – Section: Colorado Sales Threshold
4
Colorado Department of Revenue. Sales and Use Tax Topics: Marketplaces
5
Colorado Department of Revenue. Special Event License
6
Justia. Colorado Code 39-26-103 – Licenses – Fee – Revocation – Definition
7
Colorado Department of Revenue. Local Government Sales Tax
8
Colorado Department of Revenue. SUTS Participating Jurisdictions
9
Colorado Department of Revenue. Sales Tax Filing Information – Section: Filing Requirements and Frequency
10
Department of Revenue – Taxation. Service Fee
11
Colorado Department of Revenue. Sales Tax Points of Compliance Brochure
12
Department of Revenue – Taxation. Tax Topics: Penalties and Interest