First and foremost, when is sales tax imposed in Denver?  In Denver, sales tax will be imposed on the purchase price for retail sales, leases and rentals of certain tangible personal property.  Further, some services can be taxable that are purchased or performed in Denver or if delivered, used or stored in the county.  Thus, it begs the next question, what services are taxable?  The following services could be taxable, but please note, the list below is not all inclusive of the services that could be taxable.

• Software charges
• Entertainment Services
• Informational Services
• Fees such an entrance fees or a cover charge or mandatory tips/gratuity

What if a business is not located in Denver but receives business from Denver?  Does a business outside of Denver need to collect and pay the Denver Sales Tax?  If a business is licensed outside of Denver, the business may be required to collect and remit the Denver Retailer’s Use Tax on sales in Denver that would be taxable Denver retail sales.  These applicable activities could include performing an activity in Denver in connection with the sale or lease of tangible personal property. 

What sales tax is charged if delivering items outside of Denver County?  You should generally charge the applicable tax for the location you are delivering the item.  You should also check to see if any type of license is required for the location, or any other fee required.

What food is taxed and what food is exempt from sales tax?  When you purchase food in Denver County that is prepared such as in a restaurant, or when food is ready to eat, sales tax will apply to the purchase.  Food that is purchased for domestic consumption in your home can be exempt from sales tax. 

Does sales tax apply to the sale of alcoholic beverages such as beer and wine?  Yes, sales tax always applies to the sale of alcoholic beverages.

What is a home rule city?  A home rule city, which is what Denver is, elects to collect and administer their own sales tax, as opposed from another taxing authority such as the state department of revenue.

John McGuire, a local tax attorney in Denver and Golden Colorado prepared the above article.  You can contact John by contacting The McGuire Law Firm.  A free consultation with a tax attorney is provided to all potential clients.