Understanding Colorado sales tax on furniture isn’t just helpful—it’s essential. Whether you’re a buyer furnishing your home or a seller moving inventory, missing a step in tax compliance can cost you big. Colorado’s layered tax system includes state, local, and special district taxes, and furniture is almost always considered taxable. That means what you charge or pay at the point of sale can change dramatically depending on the city or county.
Hands Off Sales Tax (HOST) helps businesses navigate this complexity with ease—so you can focus on growing your business while staying fully compliant.
Understanding Colorado’s State Sales Tax
Colorado’s sales tax landscape is more complex than it seems at first glance. The base state rate is just the beginning. Depending on where a sale takes place, the total tax rate can vary significantly due to additional city, county, and special district taxes. Let’s break it down.
Colorado’s Base Sales Tax Rate: 2.9%
At the state level, Colorado imposes a 2.9% sales tax on most retail sales of tangible personal property—including furniture. This rate applies statewide and serves as the foundation on which additional local taxes are stacked.
What’s Considered Taxable? Yes, Furniture.
According to the state, tangible personal property—meaning physical items that can be touched and moved—is subject to sales tax unless specifically exempt. That includes new and used furniture, whether sold in a retail store or online to a Colorado customer.
The Local Layer: Cities and Counties
Local jurisdictions in Colorado can tack on their own sales taxes, which often vary widely:
- City and County of Denver imposes a 4.81% city sales tax, making the combined rate with state tax 7.71%.
- Boulder adds 3.86% city tax plus county and district taxes, creating a total of 8.845%.
- Colorado Springs has a combined rate of around 8.2% depending on the location.
Why This Matters
If you’re a seller, failing to charge the correct rate could result in under-collection, penalties, or unhappy customers. If you’re a buyer, especially purchasing furniture from out-of-state retailers, you might owe use tax if the seller doesn’t collect it. Understanding and applying the correct combined tax rate isn’t optional—it’s critical.
Special District Taxes
In addition to state, city, and county sales taxes, certain areas in Colorado are subject to special district taxes. These often-overlooked add-ons can significantly increase the total tax rate on furniture sales.
Common Special District Taxes
- Regional Transportation District (RTD) Tax
The RTD tax applies to areas like Denver, Boulder, and surrounding suburbs. It adds 1% to the total sales tax rate. - Scientific and Cultural Facilities District (CD) Tax
This district imposes an additional 0.1% tax to fund cultural and scientific institutions within the seven-county Denver metro area.
Practical Examples
Let’s look at a few examples to see how it all adds up.
Example 1: Selling Furniture in Denver
Let’s say you sell a $1,000 sofa to a customer in Denver. The combined sales tax rate includes:
- State tax: 2.9%
- Denver city tax: 4.81%
- RTD tax: 1.0%
- CD tax: 0.1%
Total tax rate: 8.81%
Sales tax owed: $88.10
Example 2: Selling Furniture in Colorado Springs
A $1,000 dining table sold in Colorado Springs would be taxed at:
- State tax: 2.9%
- City tax: 3.07%
- County tax: 1.23%
- PPRTA (special district): 1.0%
Total tax rate: 8.2%
Sales tax owed: $82.00
Use Tax Implications
When sales tax isn’t collected at the point of sale—especially in out-of-state or online furniture purchases—use tax often steps in to fill the gap. It ensures Colorado still receives tax revenue on taxable goods used, stored, or consumed in the state.
What Is Use Tax?
Use tax is a complementary tax to sales tax. It applies when a purchase would’ve been taxable if bought locally but wasn’t taxed because it was purchased elsewhere. The rate typically matches the combined local sales tax rate.
When Does Use Tax Apply?
- Buying furniture from an out-of-state seller who doesn’t collect Colorado sales tax.
- Bringing personal or business furniture into Colorado for use.
Buyer Responsibilities
Buyers are required to self-report and remit use tax, usually via their Colorado Individual Income Tax Return or local filing systems.
Exemptions and Special Considerations
While most furniture sales in Colorado are taxable, there are a few important exemptions and edge cases sellers and buyers should be aware of—especially for business transactions.
Are Any Furniture Sales Exempt?
Generally, retail furniture sales are taxable in Colorado. However, there are exemptions in very specific cases, such as sales to tax-exempt entities (like certain nonprofits or government agencies) with proper documentation.
Resale Certificates for Businesses
If a business purchases furniture with the intent to resell it, they may use a resale certificate to avoid paying sales tax at the time of purchase. The seller must retain the certificate to prove the sale was exempt.
Used vs. New Furniture
There is no exemption for used furniture—it is taxable whether sold by a business or private individual, as long as the seller meets the requirements for a taxable event (e.g., regular business activity).
Compliance for Sellers
If you sell furniture in Colorado—whether online, in-store, or at events—you’re likely responsible for collecting and remitting sales tax. Staying compliant isn’t optional, and the penalties for getting it wrong can be steep. Here’s how to get it right from the start.
Step 1: Register for a Sales Tax License
To legally collect sales tax in Colorado, you must register with the Colorado Department of Revenue (DOR) and obtain a Colorado Sales Tax License (Account Number).
- Apply online via MyBizColorado.
- You may also need to register separately with home-rule cities like Denver, which manage their own tax systems independently of the state.
Step 2: Collect, Report, and Remit Tax
Once registered, you must:
- Charge the correct combined sales tax rate (state + local + district).
- File returns on a monthly, quarterly, or annual basis depending on your volume.
- Remit the tax by the due date to avoid penalties.
Step 3: Maintain Accurate Records
Colorado requires sellers to keep detailed sales records for at least three years. This includes transaction dates, invoice numbers, amounts, and taxes collected.
Why HOST Is Your Sales Tax Safety Net
Colorado’s furniture sales tax landscape is layered, localized, and constantly evolving—which means getting it wrong is easier than you think. That’s where Hands Off Sales Tax (HOST) comes in. They take the burden of compliance off your plate, so you can focus on selling, not stressing.
Here’s how HOST makes your life easier:
- Nexus and Registration Support
HOST identifies where you have sales tax obligations (nexus) and handles registration in Colorado and any relevant local jurisdictions, including complex home-rule cities like Denver. - Accurate Rate Management
With dozens of overlapping tax rates across Colorado, HOST ensures you’re always charging the correct amount—factoring in city, county, and special district taxes automatically. - Filing and Remittance Done for You
HOST prepares, files, and remits your sales tax returns on time, every time. No missed deadlines, no penalties. - Audit Defense and Notice Management
If Colorado ever comes knocking, HOST steps in with expert audit support and response services—so you’re never left on your own.
In short: if you’re selling furniture in Colorado and want zero tax headaches, HOST is the partner you need in your corner.
Don’t Let Sales Tax Complicate Your Sales
Selling or buying furniture in Colorado comes with more tax complexity than most people expect. With varying state, local, and special district rates—and rules that change depending on the city—it’s easy to get tripped up. Whether you’re a business owner trying to stay compliant or a shopper curious about what you’re really paying, understanding Colorado sales tax on furniture is essential.
If you’re overwhelmed or just want to do things right the first time, Hands Off Sales Tax (HOST) is your solution. Reach out today for a consultation and let the experts take it from here.
