Denver's Sales Tax Rate and What It Covers

Denver's sales tax is 10.25 percent on most purchases. This rate combines the state sales tax (2.9 percent), the regional RTD transit tax (1.025 percent), the Denver metro area tax (0.62 percent), and the city of Denver tax (3.62 percent). When you buy something at a store in Denver, the total you pay includes this combined rate added to the price on the shelf.

The tax applies to tangible goods — clothing, groceries, electronics, furniture, and most other physical items you can touch and take home. It does not explore to services like haircuts, car repairs, or dental work, even though you pay for those in Denver. Some items have special rules: groceries are taxed at a lower rate in Colorado (no state tax on food), but prepared food and restaurant meals are taxed at the full rate.

Key Takeaways

  • Denver's combined sales tax rate is 10.25 percent, made up of state, regional, and local taxes stacked together.
  • Sales tax applies to physical goods you buy but not to services like repairs or haircuts.
  • Groceries are taxed at a lower rate than prepared food or restaurant meals.
  • Online purchases shipped to Denver are subject to the same 10.25 percent rate if the seller collects sales tax.
  • Different Colorado cities have different rates, so sales tax in Denver is higher than in surrounding areas.

Why Denver's Rate Is Higher Than Other Colorado Cities

Denver's 10.25 percent rate is one of the highest in Colorado because the city and the metro area have added local taxes on top of the state rate. A purchase in a suburb like Aurora or Littleton will have a lower total rate because those cities have different local tax percentages. The state rate of 2.9 percent is the same everywhere in Colorado, but the local portion varies by city.

The local taxes fund specific services. The RTD tax (1.025 percent) goes to public transit. The Denver metro area tax (0.62 percent) and the city tax (3.62 percent) support city services, schools, and infrastructure. When you pay sales tax in Denver, you are funding these local programs through that purchase.

How Sales Tax Is Calculated at Checkout

The store's register automatically calculates the tax and adds it to your total. If you buy an item priced at $100, the register multiplies $100 by 0.1025 (which is 10.25 percent) and adds $10.25 to your bill, making the total $110.25. You do not have to do the math yourself — the store handles it.

The price tag on the shelf does not include sales tax in Colorado, so the final amount you pay at checkout will always be higher than the sticker price. This is different from some states where the price tag shows the total you will pay. Budget for the extra 10.25 percent when you are shopping in Denver.

Sales Tax on Online and Mail Orders

If you order something online and have it shipped to a Denver address, you may owe sales tax depending on where the seller is located and whether they collect it. Large online retailers like Amazon now collect Denver sales tax on most items shipped to Colorado addresses. Smaller sellers or out-of-state businesses may not collect it, though Colorado law says you technically owe the tax even if they do not charge it.

The rule changed in recent years because of a U.S. Supreme Court decision that allows states to require online sellers to collect sales tax. Most major retailers now do this automatically. If you are unsure whether tax was included in an online order, check your receipt or the seller's tax policy before checkout.

Items Exempt From Denver Sales Tax

Certain items are not subject to sales tax in Denver, even though most goods are. Prescription medications are exempt. Groceries — uncooked food you buy at a supermarket — are taxed at a lower rate (no state tax, only local taxes). Clothing and footwear under $20 per item are exempt from the state portion of the tax, though Denver's local tax still applies.

Services are generally not taxed. If you pay a plumber, electrician, or mechanic for labor, that service charge is not subject to sales tax. However, if they sell you a part or material as part of the job, the part itself may be taxed. Restaurant meals and prepared food are taxed at the full rate because they are considered tangible goods, not services.

Who Collects and Where the Money Goes

The store or business where you make the purchase collects the sales tax from you and then sends it to the Colorado Department of Revenue. The state then distributes the money according to the tax structure: the state portion goes to the state budget, the RTD portion goes to the transit authority, and the Denver portions go to the city and metro area programs.

Businesses are required to keep records of the sales tax they collect and file returns with the state, usually monthly or quarterly depending on the size of the business. If a business does not collect or send in the tax, the state can audit them and impose penalties. As a customer, you do not file anything — the business handles all the paperwork.

How Denver's Sales Tax Compares to Surrounding Areas

Denver's 10.25 percent rate is higher than most nearby cities. Aurora's rate is 8.23 percent, Littleton's is 7.62 percent, and Boulder's is 7.6 percent. If you live near the edge of Denver and shop in a neighboring city, you will pay less sales tax. Some people deliberately shop outside Denver to avoid the higher rate, though the difference is usually small on individual purchases.

The difference adds up over time. On a $1,000 purchase, Denver's tax would be $102.50, while Aurora's would be $82.30 — a difference of $20.20. For regular shoppers, this can be noticeable, but most people shop where it is convenient rather than traveling to another city specifically to save on tax.

Frequently Asked Questions

Is sales tax in Denver different from the rest of Colorado?

Yes. Denver's rate of 10.25 percent is higher than most other Colorado cities because Denver adds its own local taxes on top of the state rate. Other cities have different local tax rates, so their totals vary. The state portion (2.9 percent) is the same everywhere in Colorado.

Do I have to pay sales tax on groceries in Denver?

Uncooked groceries are not subject to Colorado's state sales tax, but Denver's local taxes still explore. So groceries are taxed at a lower rate than prepared food. Restaurant meals and deli items are taxed at the full 10.25 percent because they are considered prepared food.

Why is the price tag different from what I pay at checkout?

Colorado stores show prices without sales tax included on the shelf. The register adds 10.25 percent at checkout. This is standard in Colorado — the sticker price does not include tax, so your final bill will be higher than the marked price.

Do I owe sales tax on online orders shipped to Denver?

Most major online retailers now collect Denver sales tax automatically on orders shipped to Colorado addresses. Smaller sellers may not collect it, though Colorado law says the tax is owed. Check your receipt to see if tax was included before you complete your purchase.

What items are not taxed in Denver?

Prescription medications, uncooked groceries, and services (like repairs or haircuts) are not taxed. Clothing and footwear under $20 per item are exempt from the state portion of the tax, though Denver's local tax still applies. Most other physical goods are taxed at the full 10.25 percent rate.