What is Use Tax?

Use tax is paid by the purchaser when sales tax has not been charged and collected by the seller.

Use tax must be paid by City of Boulder businesses and individuals for purchases brought into City Limits that did not include City of Boulder sales tax or when inventory acquired at wholesale is used by the business, instead of being sold to customers. The city use tax rate is the same as the sales tax rate: 3.86%. With proof of payment, sales tax paid to another tax jurisdiction may be credited against consumer use tax due for a particular item.

Use tax is intended to protect local businesses against unfair competition from out-of-city or state vendors who are not required to collect City of Boulder sales tax. It ensures that all City businesses and residents help fund City services regardless of where they shop. Many tax jurisdictions have a use tax imposed when sales tax is not collected. The State of Colorado also levies Use Tax on purchases where Colorado State Tax is not collected.

For more information see the Use Tax section of our Tax Regulations page.

How to Declare Use Tax - For Businesses

Check invoices and receipts for tax rates

As a business, you should keep a copy of all invoices and receipts from purchases. Check those invoices and receipts to ensure that the full tax rate (City, County, RTD, State) of 8.845% has been assessed and collected. In the example below, the full tax rate has been assessed by the vendor and no additional use tax is due:

Image
Sample invoice with City of Boulder tax

If only County, RTD and State taxes (4.985%) were collected, then the City use tax rate of 3.86% is due and payable to the City of Boulder. The example below shows that City sales tax was not collected and is therefore due as use tax.

Image
Sample Invoice 2

Report any tax due on your next return

On your monthly, quarterly or annual return, declare your use tax in the 'Use Tax' section of the return found on the Boulder Online Tax Portal.

Image
Use Tax Return

Here you can see the return filled out:

Image
Use Tax Return Example

Submit your completed return

Once you have completed the return with your sales & use tax filled out, you can submit the return and pay all tax due.

Please note: Use Tax for businesses must be remitted through the web logon for Boulder Online Tax. Please do not use the Consumer Use tax link as this will delay the processing of your tax return and may result in late filing penalties

How to Declare Use Tax - For Consumers

Go to the Boulder Online Tax Portal

Click File a Consumer Use Tax Return

Go through the steps listed to complete the return

When finished, you can make a payment by ACH debit, credit or check. You will be able to print out a copy for your records.

If you have any questions please contact Sales Tax Staff by email at salestax@bouldercolorado.gov.