Usage Tax? What I Need to Know Living in Colorado

Individuals and businesses in Colorado are bound to pay a consumer use tax, also known as usage tax. This is typically applicable for acquisitions like the purchase of a dental business for sale that didn’t include sales tax at the time when it was bought. Consumer use tax is also applicable when the inventory that comes with a business is not sold to customers and is utilized by the practice itself.

Usage Tax Rate in Colorado

The state's consumer use tax is levied at the same 2.9% rate as its sales tax. Sales tax payable to other states may be deducted from consumer use tax owed in Colorado for a specific item with proof of payment. It is important to note that a few special districts and local administrations also collect usage tax.

Special Tax Districts in Colorado

The majority of people in Colorado reside in one of several special districts. For example, most of Denver's metro area population lives within the limits of the Scientific & Cultural Facilities District (SCFD) and the Regional Transportation District (RTD).

How to Report or Pay Usage Tax in the State

The amount of consumer use tax payable determines the due date for companies and other legal bodies. The company is required to submit a yearly use tax report even if the total amount of consumer use tax it pays in a year is less than $300. By January 20th of the following year, it must be submitted. The firm or legal entity must submit a return before the 20th day of the subsequent month if the total tax owed exceeds $300.

Conclusion

Usage tax is a compulsory part of a transaction involving a dental business for sale. However, it applies to the sale of other ventures as well. It is vital to consider, report, and file this tax under the circumstances that are described above.

For more information on tax matters in Colorado or to look for a credible dental practice for sale in the state, get in touch with CTC Associates today.