Sales tax deduction in Colorado
Varies
Is Sales Tax Deductible in Colorado?
Short answer: Only instead of income tax: itemizers in Colorado pick sales tax (2.9% state rate, about 7.89% with local taxes) or state income tax, whichever is bigger. Lowest nonzero state rate in the U.S.; groceries are exempt from the state tax, but cities and counties (including self-collecting home-rule cities) may choose to tax food.
Use the IRS Sales Tax Deduction Calculator or your receipts, add sales tax paid on a car, boat, or home-building materials, and stay within the $40,400 SALT cap (Schedule A line 5a).
Records to keep: Keep your state return, W-2s and 1099s (1099-R, SSA-1099), and any state credit worksheets. Check your state revenue department's current-year instructions before you file.
Sales tax deduction in Colorado
Varies
Individuals / Personal Taxes
Only instead of income tax: itemizers in Colorado pick sales tax (2.9% state rate, about 7.89% with local taxes) or state income tax, whichever is bigger. Lowest nonzero state rate in the U.S.; groceries are exempt from the state tax, but cities and counties (including self-collecting home-rule cities) may choose to tax food.
Business justification
Only instead of income tax: itemizers in Colorado pick sales tax (2.9% state rate, about 7.89% with local taxes) or state income tax, whichever is bigger. Lowest nonzero state rate in the U.S.; groceries are exempt from the state tax, but cities and counties (including self-collecting home-rule cities) may choose to tax food. Use the IRS Sales Tax Deduction Calculator or your receipts, add sales tax paid on a car, boat, or home-building materials, and stay within the $40,400 SALT cap (Schedule A line 5a).
Category
- Personal Tax Deductions