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Sales Tax and Business Licensing

Frequently Asked Questions#

Who needs a license to do business in the City?highlight_off

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:

  1. Directly, indirectly or by a subsidiary maintain a building, store, office, salesroom, warehouse or other place of business within the taxing jurisdiction;
  2. 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;
  3. Maintains one or more employees, agents or commissioned sales persons on duty at a location within the taxing jurisdiction;
  4. Own, lease, rent or otherwise exercises control over real or personal property within the taxing jurisdiction; or
  5. Make more than one delivery into the taxing jurisdiction within a twelve-month period.

Please refer to the Engaged in Business Rule and Regulation for additional information.

What other licenses might I need?highlight_off

Please call the Sales Tax office for further information on obtaining these licenses and the associated fees (970) 221-6780.

What is the fee for the sales and use tax license?highlight_off

There is no fee for the City of Fort Collins license.

What if I am doing business from my home?highlight_off

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 does the City of Fort Collins do with my account and payment information?highlight_off

The City of Fort Collins is bound by Municipal Code Section 25-166 - Confidentiality regarding the disclosure of any account information.  And, the City of Fort Collins does not store any bank account or credit card information.  

What is sales tax?highlight_off

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?highlight_off

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, 2025. The quarter-cent tax for natural areas will expire on December 31, 2030.  

The Keep Fort Collins Great (KFCG) .85 percent sales tax was passed by Fort Collins voters in November 2010 to fund critical services and programs for the community. This .85% dedicated tax sunset December 31, 2020. On February 5, 2019, City Council referred a ballot measure regarding Keep Fort Collins Great revenue replacement to the April 2, 2019 ballot. Fort Collins voters passed the ballot by 61%. This measure will continue the .85% tax by increasing the ongoing tax rate by .60% and adding a renewable .25% tax through 2030. The City of Fort Collins uses this important revenue stream for road improvement projects, increased staffing and facilities for our emergency responders, the diverse needs in our Parks and Recreation Department and other community priorities. 

How is the sales tax remitted?highlight_off

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?highlight_off

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 state and county tax should be remitted directly to the Colorado Department of Revenue.

When is my tax return due?highlight_off

A return is due no later than the 20th of the month following the reporting period set up for your account (monthly returns are due the 20th of each month; quarterly returns are due April 20, July 20, October 20, and January 20; and annual returns are due January 20). If the 20th falls on a weekend or holiday the tax return is due the following business day.

On-line returns must be entered by 11:59 pm MST on the due date in order to avoid late charges.

Am I required to file a return if no taxes are owed?highlight_off

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. 

What happens if I fail to file a tax return on time?highlight_off

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 types of payments and form of payment is accepted when using the online tax system?highlight_off

Payments can be made for sales, use, and lodging tax.  New returns as well as outstanding balances can be paid on-line.  Acceptable forms of payment include E-checks, Master Card, and Visa. If you are using an e-check and you have debit blocks on your account, please contact our office for the information needed by your bank to avoid the transaction being rejected by your bank.  Please be aware that a credit/debit card payment incurs a 2.75% processing fee.  

Will I receive confirmation if I file and pay my taxes online?highlight_off

Yes, you will receive an email notification that the return and payment were processed.

Why do I have to pay a fee when paying with a credit card?highlight_off

The payment processor charges a "service fee" for processing the transaction and covering the operating costs associated with servicing the transactions. 

What is use tax?highlight_off

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.  Use tax must be remitted when a municipal sales tax of at least the current Fort Collins rate 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?highlight_off

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):highlight_off
  • Office Supplies
  • Magazine subscriptions
  • Furniture and fixtures
  • Books
  • 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
  • Signs
Does the City impose lodging tax?highlight_off

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?highlight_off

Those businesses providing lodging services must obtain a separate Lodging Tax License. Lodging tax is remitted on a separate lodging tax return each month.

What is the lodging tax rate?highlight_off

The City of Fort Collins lodging tax rate is 3% and is charged in addition to sales tax.

Does the City of Fort Collins tax food for home consumption?highlight_off

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?highlight_off

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?highlight_off

temporary sales tax license 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?highlight_off

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?highlight_off

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?highlight_off

refund claim form 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?highlight_off

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?highlight_off

Yes, a tax class is offered by the Sales Tax Division. A list of class times is available at Please call the Sales Tax office to signup for a class at (970) 221-6780.

Where can I pay the taxes collected?highlight_off

The preferred way to remit City of Fort Collins tax is using the online sales tax system. Other options to pay include:

Mailing a check along with your return to:

PO Box 440

Fort Collins CO 80522

You MUST include a return along with your payment

If you need to make a payment in cash, please go to the City of Fort Collins Utilities Customer Service office at 222 Laporte Avenue.