Use Tax: What Businesses in Fort Collins Need to Know

This time of year is met with a whole host of year-end duties, tax planning, and bookkeeping. One of the things on a business owner or accountant’s to-do list should be to file and pay for your Use Tax. A use tax is in the same category as a sales tax, but is specifically applied to purchases of goods from another business located outside the state of Colorado that will be used, consumed, or stored at your business in the state. The tax is applied at the same rate as your local sales tax and is designed to prevent purchasers from skipping the sales tax by purchasing elsewhere. Use taxes must be paid by businesses; failure to do so can result in penalties and further interest.

 

Business use tax may be paid on an annual basis if the total tax owed is less than $300 for the entire year; it will be due on January 20th of the next year. If the tax is more than $300 per month, the use tax is due on a monthly basis, paid on the 20th of the following month. If the 20th happens to fall on a weekend or holiday, it is due the next business day. 

 

This year’s due date for annual use tax in Colorado is January 22, 2018 for purchases made the previous year. In Fort Collins, the use tax is calculated at 3.85%, the same rate as local sales tax. Use tax should be calculated on all purchases made out of state and can be paid directly to the City of Fort Collins. Other use tax rates and collections procedures may apply based on the city in which your business is located.

 

For example, if your company purchased office supplies and computer systems from an online retailer such as Amazon.com, you must pay 3.85% of every purchase made throughout the year in Colorado use tax. Similarly, if your company bought specialized building supplies, machinery, or other supplies you utilized in Colorado, the use tax must also be calculated and paid for. 

 

Are you worried about your business’s use tax liability? Don’t hesitate to contact Tally Services, Inc. in Fort Collins, Colorado. We can help you understand use tax policies and what use taxes your business owes in Fort Collins. Our team of accounting professionals can make sure your receipts, documentation, and use tax filings are in order and paid for all 2017 purchases. We can also help you set up systems and procedures so use taxes don’t sneak up on your in coming years.