Colorado Local Taxes and TABOR

What TABOR actually does

TABOR is Colorado's Taxpayer's Bill of Rights. It requires voter approval for tax increases and limits how much revenue a government can keep and spend unless voters approve a change. Revenue above the applicable limit must be refunded unless voters allow the government to keep it. TABOR does not tell you the tax rate for an address, and it does not cap the change in one owner's property-tax bill.

Use tax fills a collection gap

A taxable purchase does not become tax-free just because the seller did not collect the right amount. Consumer use tax can apply to some online orders, equipment, building materials, vehicles, or items bought outside Colorado and then used here. Look up the address and use the Colorado Department of Revenue's consumer use-tax guidance to check the purchase.

Home rule does not always mean self-collecting

Some cities let the state collect their sales tax. Some home-rule cities collect and audit their own tax. Some self-collecting cities participate in Colorado's Sales and Use Tax System, called SUTS, while others require a separate city registration or return. Do not guess from the words "home rule." If you sell taxable goods, find the collector for every city on the return.

For a worker, city income tax is not the usual pattern

Most Colorado residents do not file a general city income tax return. A few cities use an occupational privilege tax tied to work performed inside the city. Denver and Greenwood Village are examples. An employer may withhold the employee part, and the business may have its own payment or filing duty. Check the city where the work is performed.

Four quick examples

• Buying furniture: look up the delivery address, not only the store address.
• Buying online without enough tax collected: check whether consumer use tax is due.
• Selling goods: look up the rate and the government that expects the return.
• Working in a city with an occupational tax: check the city rule and your pay stub.