Frequently Asked Questions
- Who needs a license to do business in the City?
The City of Fort Collins requires that any entity doing business within the City limits obtain a City Sales and Use Tax License . This includes businesses making retail sales and businesses that provide services only. A business with more than one establishment engaged in business in the City would also need to obtain a separate license for each location.
You are considered engaged in business if you:
- Directly, indirectly or by a subsidiary maintain a building, store, office, salesroom, warehouse or other place of business within the taxing jurisdiction;
- Send one or more employees, agents or commissioned sales persons into the taxing jurisdiction to solicit business or to install, assemble, repair, service or assist in the use of its products, or for demonstration or other reasons;
- Maintains one or more employees, agents or commissioned sales persons on duty at a location within the taxing jurisdiction;
- Own, lease, rent or otherwise exercises control over real or personal property within the taxing jurisdiction; or
- Make more than one delivery into the taxing jurisdiction within a twelve-month period.
Please refer to the Engaged in Business Rule and Regulation (PDF 28KB) for additional information.
- What other licenses might I need?
- Auctioneer License
- Bowling Alley License
- Contractors License
- Game Machine License
- Home Occupation License
- Liquor License & Liquor Occupation Tax
- Massage Therapist License
- Movie Theater License
- Pawn Broker License
- Places of Entertainment License
- Secondhand Dealer License
- Outdoor Vendor License
- Solid Waste Collector License
- What is the fee for the sales and use tax license?
There is no fee for the City of Fort Collins license.
- What if I am doing business from my home?
The City’s Zoning Department requires that you obtain a Home Occupation License if you are doing business from a residence within City limits. The fee for the license is $25 and is renewed every two years.
- What is sales tax?
The sales tax is a transaction tax upon all sales, purchases, and leases of tangible personal property and taxable services sold at retail or leased by persons engaged in business in the City. Sales tax is collected by the vendor or lessor and remitted to the City.
- What are sales tax revenues used for?
Of the City's 3.85% sales tax, 2.25% is the base rate. The base rate is used to fund general government services like police, transportation and administration. Three one-quarter cent dedicated taxes were approved by City voters to be used specifically for streets and transportation, general city projects and natural areas. The quarter-cent taxes for streets and transportation and general city projects will expire on December 31, 2015. The quarter-cent tax for natural areas will expire on December 31, 2030. A .85% increase in the City’s sales and use tax rate on all non-exempt taxable items, to be used for certain specified purposes will be levied for a ten year period, beginning January 1, 2011, and ending December 31, 2021. The funding has been allocated as follows:
- 33% for street maintenance and repair;
- 17% for other street and transportation needs;
- 17% for police services;
- 11% for fire protection and other emergency services;
- 11% for parks maintenance and recreation services; and
- 11% for community priorities other than those listed above, as determined by the city council.
- How is the sales tax remitted?
Vendors submit sales tax returns according to the reporting period assigned to them when licenses are issued. Vendors may remit tax monthly, quarterly or annually depending on the amount collected. Each return is completed and returned to the City with the proper remittance on or before the 20th day of the month following the reporting period. Tax returns that are mailed must be post marked on or before the 20th day of the month. If the 20th falls on a weekend or holiday, the return is due the following business day.
Every vendor that is engaged in business in the City must charge and collect City of Fort Collins sales tax on the purchase price or sales price paid or charged for tangible personal property and certain taxable services when purchased, leased, rented or sold at retail within the City. Transactions and items exempt from the sales tax are listed in Section 25-73(c) of the City of Fort Collins Municipal Code.
Any excess sales tax collections that a business collects must be remitted to the City. If, on a taxable sale, no sales tax was collected or an improper percentage was collected, the proper tax must still be remitted to the City.
- Whom do I remit the taxes to?
As a Home Rule City under the Colorado Constitution, the City of Fort Collins has the authority to collect its own taxes. The 3.85% sales tax that you collect for the City of Fort Collins must be remitted directly to the City of Fort Collins. The combined rate for state and county tax is 3.5% - which should be remitted directly to the Colorado Department of Revenue.
- Am I required to file a return if no taxes are owed?
Yes. A tax return still needs to be filed even if no sales or use tax is due for the reporting period. Failure to file a return will result in a deficiency notice. On-line filing of zero returns is available at https://salestax.fcgov.com/
- What happens if I fail to file a tax return on time?
Tax returns received after the due date will be considered late. Penalties and interest will apply.
If you fail to file your tax return with the proper penalties and interest within five days from the due date, a "Notice of Determination, Assessment and Demand for Payment" will be made. You will have 20 days from the date of delivery to file the return with the proper penalties, interest and assessment fee or petition the Financial Officer in writing for a hearing. If the assessment is not satisfied within the 20-day period, other collection methods may be initiated.
- What is use tax?
The use tax is a complement to the sales tax. Use tax is remitted to the City by the person storing, using, distributing or consuming the tangible personal property or taxable service within the City of Fort Collins. You must remit a use tax when a Colorado municipal sales tax of 3.85% has not been paid. The use tax is intended to equalize competition between vendors located in the City who collect Fort Collins sales tax and those located outside the City who do not charge Fort Collins sales tax. It is an incentive to make local purchases.
- When is use tax remitted to the City?
Initial use tax that is due when you begin a business should be remitted on your initial Use tax return which is mailed out with your Sales and Use Tax license. If you purchase an existing business, use tax is due on the furniture, fixtures and equipment. If additional supplies, equipment, etc. is purchased for your business and is subject to use tax, it should be reported each filing period on your City of Fort Collins Sales and Use tax return.
- What are examples of items subject to use tax? Use Tax Applicable To (not all inclusive):
- Office Supplies
- Magazine subscriptions
- Furniture and fixtures
- Tools and Equipment
- Brochures and handouts
- Leased and rented items
- Cash registers
- Cleaning and janitorial supplies
- Paper products
- Non-customized software programs
- Advertising items
- Computers and calculators
- Does the City impose lodging tax?
Yes - A City lodging tax of 3.0% is charged (in addition to the 3.85% sales tax) for rooms or accommodations in the City, if the occupancy is for a period of less than 30 consecutive days.
Lodging tax is imposed on the leasing, rental or furnishing of any room or other accommodation in any hotel, apartment-hotel, motel, guesthouse, trailer court, guest ranch, mobile home, automobile camp or any such similar place to any person who, for a consideration, uses, possesses or has the right to use or possess such room or other accommodation for a total continuous duration of less than thirty (30) days.
- How do I remit lodging tax?
Those businesses providing lodging services must obtain a separate Lodging Tax License (PDF 41KB). Lodging tax is remitted on a separate lodging tax return each month.
- What is the lodging tax rate?
The lodging tax rate is 3% and is charged in addition to sales tax. The total tax rate on lodging within the City limits is 10.35% - that includes State of Colorado and Larimer County sales tax.
- Does the City of Fort Collins tax food for home consumption?
Yes. Only the base rate of 2.25% applies to food for home consumption. Contact State of Colorado and Larimer County to determine the taxability of food for home consumption by those jurisdictions.
- What is the definition of food for home consumption?
Food for home consumption includes all food except:
- prepared food or food for immediate consumption
- carbonated water marketed in containers
- chewing gum
- seeds and plants to grow food
- prepared salads and salad bars
- cold sandwiches
- deli trays
- food or drink vended by or through machines or non-coin operated coin-collecting food and snack devices on behalf of the vendor.
- How is sales tax collected and remitted for a special event in Fort Collins?
A temporary sales tax license (PDF 41KB) is issued for a one-time event in the City of Fort Collins. The license is specific to a particular event and sales tax should be paid to the City two weeks after the event. A separate temporary sales tax license is required for each event. A vendor may choose to obtain a permanent City Sales & Use Tax License if they are participating in multiple events.
The Colorado Department of Revenue collects the State & County tax on special events and should be contacted regarding special event licensing.
- If I sell my business or discontinue my operations, what should I do?
Within 10 days after selling or discontinuing your business, you must complete a return stating the date you sold or discontinued the business and pay all sales and use taxes due. If a business is sold, the new owners must obtain a new sales and use tax license. Your license cannot be transferred.
- Is there a license required for having a garage sale? How many are allowed per year?
You do not need a license to hold a garage sale. You do not need to collect sales tax on garage sale items. The number of garage sales per year cannot exceed five weekend periods in one calendar year. Weekend period means Friday through the immediate following Monday.
- I overpaid my taxes. How do I get a refund?
A refund claim form (PDF 33KB) would need to be filled out along with documentation as to the reason for the refund. Refunds will only be paid to the person who remitted the tax. The statute of limitations for refunds varies depending upon the circumstances of the sale.
- I would like to correct a previous return that has already been filed. How do I do that?
If an error on a previous return was made, you could file an amended return for that period. Clearly state the date of the return you are amending on the top of the return you are filing. Fill out the return with the correct figures for that period.
If you paid too much on a return you need to fill out a claim for a refund and a check will be sent to you.
If you did not pay enough taxes for the period, the additional taxes must be remitted on the amended return. Penalties and interest may apply.
- Does the City provide sales and use tax classes?
Yes, a tax class is offered by the Sales Tax Division. A list of class times is available at www.fcgov.com/salestax. Please call the Sales Tax office to signup for a class at (970) 221-6780.