How to Report Colorado Sales Tax
- 1). Contact the Department of Revenue in Denver. The Department of Revenue will have the Colorado Form DR 0100 which is the tax form for sales.
- 2). Contact the Department of Revenue for Form DR 1002. DR 1002 lists specific details concerning tax rates and the current tax deductions. Colorado has a number of sales tax deductions that are consistently changing. For example, in 2010, Colorado removed sales tax deductions for candy and soda.
- 3). Hold on to all sales and purchase invoices. The state of Colorado advises businesses to keep such invoices for at least three years, especially if there are taxation issues that could result in an audit.
- 4). Write down your total gross sales and net sales on the sales tax form. The gross sales and net sales amounts must be within the designated fiscal period for the sales tax filing. Even if there are no total gross sales or net sales in the fiscal period for the tax filing in Colorado, you must write a zero (0) on the sales tax form.
- 5). Enter your deductions. The Colorado Department of Revenue offers businesses a variety of tax exemptions and deductions. For example, farmers may receive a deduction on the tax applied in purchasing farming equipment. Tax-deduction information is listed in detail on Form DR 1002.
- 6). Include your business' special tax rate. Colorado has differing tax rates for vendors and businesses based upon their location or service. For example, scientific or cultural vendors as well as businesses near the Denver Broncos football stadium must apply a 0.1 percent tax to their sales. This information is on Form DR 1002 for each tax year.
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