Denver Sales Tax Exemption Certificate: Who Qualifies and How to Use It

If your organization is a 501(c)(3) in good standing with the IRS, you do not need to apply for a Denver sales tax exemption certificate. Since January 1, 2021, Denver no longer issues a separate municipal Letter of Exemption to charities. Your IRS determination letter, paired with an Affidavit of Exempt Sale completed at the register, is what makes a purchase tax-free from the city’s 5.15% sales tax.¹

Who Qualifies Automatically

An active 501(c)(3) organization is automatically exempt from Denver’s sales tax, use tax, lodger’s tax, tourism improvement district tax, and the business portion of the occupational privilege tax. No city application, no renewal, no separate certificate number.¹

Two conditions have to hold for every purchase:

The organization must have a valid, active 501(c)(3) determination from the IRS.
The purchase must be paid directly from the organization’s own funds. An employee or volunteer paying with personal money and then seeking reimbursement does not qualify, even when the organization ultimately covers the cost.¹

Federal, state, and local government entities are also exempt. Under the Denver Revised Municipal Code, “government” covers departments, institutions, and political subdivisions of the United States and the State of Colorado.² Government buyers should still expect vendors to ask for documentation at the point of sale.

If your organization previously held a Denver Letter of Exemption, there is nothing to renew. The letter is no longer required for 501(c)(3) entities.

How to Make a Tax-Free Purchase

The document that actually does the work at the register is the Standard Municipal Home Rule Affidavit of Exempt Sale. It is not an application for exempt status. It is a point-of-sale form the buyer completes and gives to the vendor to certify that a specific transaction qualifies under DRMC 53-26, DRMC 53-97, and DRMC 53-172.³

When your 501(c)(3) buys something in Denver, expect the retailer to ask for two things: a completed affidavit and a copy of your IRS determination letter. Together they give the vendor the proof they need to justify not collecting tax.¹

The affidavit is available for download from the Denver Treasury Division’s tax forms page on denvergov.org. Keep blank copies and a scan of your IRS letter on hand so any staff member making a purchase can complete the paperwork on the spot. Fill out every field on the affidavit; the vendor keeps it as their audit trail, and Denver puts the burden of proving a sale is exempt on the vendor, not the buyer.⁴ That’s also why an unprepared vendor may hesitate: bringing your IRS letter and a filled-in affidavit removes the friction.

Denver Is Separate From Colorado’s State Exemption

Denver is a home-rule, self-collected city. Colorado’s sales tax rules do not carry over to Denver’s municipal tax, and Denver runs its own exemption process.⁵

Two practical consequences for nonprofits:

A Colorado state exemption certificate (numbers starting with 98 or 098) does not exempt you from Denver’s 5.15% city tax.
Qualifying for Denver’s exemption does not cover the state’s 2.9% tax or the taxes imposed by other overlapping districts.

Other Colorado home-rule cities that self-collect can set their own rules too. If your organization buys in multiple cities, check each one’s documentation requirements separately.

When You Also Need to Register in eBiz Tax Center

Denver’s eBiz Tax Center is a business tax portal, not an exemption application. Because 501(c)(3) organizations no longer need a separate exemption certificate, there is no exemption form to file there.

You do need to register in eBiz if your exempt organization collects sales tax from the public (a thrift shop, event ticketing) or has employees in Denver subject to the occupational privilege tax.⁶ During registration, provide your 501(c)(3) determination letter so the Treasury Division flags the account as exempt for the applicable taxes.¹

Records to Keep and What Counts as Misuse

Automatic exemption doesn’t mean automatic paperwork. Keep copies of every completed Affidavit of Exempt Sale, the matching receipts, and evidence that each purchase was paid from organizational funds. Organize the records by date so any transaction can be tied back to a legitimate organizational purpose if the Treasury Division asks. The city’s tax guides don’t set a specific retention period for exempt-purchase records; three to four years is a reasonable minimum, longer if you want more cushion.

Using the organization’s exempt status for personal purchases, or for items unrelated to the exempt purpose, violates Denver municipal law. The city can revoke exempt standing and, on audit, assess back taxes plus interest on every disqualified purchase. Employees and volunteers cannot use the exemption for personal buying, even while traveling on official business; a personal item rung up alongside organizational supplies does not get tax-free treatment. Auditors look for exactly this pattern.

Where to Get Help

Questions about exempt status, the affidavit, or business tax registration go to the Denver Treasury Division at 720-913-9300 or Treasury.Information@denvergov.org. Written correspondence goes to the Wellington Webb Building, 201 W. Colfax Ave., Department 1009, Denver, CO 80202.⁷

1
City and County of Denver. Exempt Organization Information
2
City and County of Denver. Tax Guide Topic 87 – Governmental Exemption
3
City and County of Denver. Standard Municipal Home Rule Affidavit of Exempt Sale
4
City and County of Denver. Tax Guide Topic 24 – Exemption – Burden of Proof
5
Colorado Department of Revenue. Local Government Sales Tax
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City and County of Denver. Business Tax FAQs
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City and County of Denver. Treasury Contacts