Sales Tax Information
Every person who is engaged in business in Westminster must obtain a sales/use tax license. The Westminster Municipal Code imposes a sales tax upon the purchase price paid for tangible personal property and certain taxable services purchased at retail in the city. Retailers are responsible to collect this tax on behalf of the city and remit it on periodic, Westminster sales and use tax returns. Even those retailers without a commercial establishment in Westminster may be engaged in business and responsible for the collection and payment of Westminster sales tax.
Westminster Combined Sales Tax Rate
The total tax rate imposed upon sales within Westminster as of January 1, 2012 is comprised of the following:
|City of Westminster
|State of Colorado*
|Regional Transportation District (RTD)*
|Cultural District (CD)*
|County (Adams or Jefferson)*
* This tax is collected by the Colorado Department of Revenue. For more information, visit their website or contact Taxpayer Services at (303) 238-7378.
Tax Added to the Price
Retailers must add the tax due to the taxable purchase price showing it as a separate and distinct item. Retailers may not advertise, state, or otherwise hold out, directly or indirectly, to the public or to any consumer that tax will be assumed or absorbed by the retailer or is otherwise included in the price, will not be added to the price, or will be refunded. For sales tax, there are two exceptions. The sales tax may be included in the price of malt, vinous, or spirituous liquor sold by the drink. Sales tax may also be included in the price of items vended from "coin-operated" devices or the price of using "coin-operated" devices.
Every retailer must remit sales tax equal to or greater than (see excess tax below) the total taxable sales for the reporting period multiplied by the specified rate even if they did not collect as much. The burden of proving that any transaction or item is exempt from Westminster sales tax is on the retailer. Improper exemption may result in penalties and interest in addition to payment of the resulting tax deficiency. Should a dispute arise between a retailer and purchaser as to whether a transaction or item is subject to tax, the retailer is required to collect the tax and the purchaser may apply for a refund from the city directly.
The Westminster Municipal Code is written broadly with the intent of imposing tax upon the vast majority of transactions. Taxation is the rule and exemption the rare exception. Exemptions from sales tax are specifically identified in the code and may not be increased by implication or similarity. In other words, transactions and items are subject to tax unless explicitly exempted.
As a home-rule city, Westminster administers its own tax program independent of the State of Colorado and other Colorado home-rule municipalities. It is important to note that Westminster taxes some items & transactions differently than the state and other jurisdictions. The following is a list of some of the items that are taxed by Westminster but may not be taxed by other jurisdictions:
- Pay television
- Natural gas and electricity for use in manufacturing, use in food preparation, and residential use
- Prepress supplies for one time use
- Medical supplies for one time use
- Equipment used in manufacturing
- Freight, delivery, and transportation charges
- Food for home consumption
- Interstate & international telecommunications
- Rental of storage space within the city
- Solar energy and solar systems
- Utilization of “coin operated” devices (taxed as a rental)
Trust Status of Taxes Collected & Excess Tax
Sales tax collected by any retailer on behalf of Westminster remains property of the city at all times. Retailers hold these taxes in trust for the sole use and benefit of the city until paid. All Westminster sales tax collected by a retailer must be remitted to the city. Remittance to the Colorado Department of Revenue or any other taxing authority does not relieve a retailer of their liability to Westminster. Retailers are encouraged to deposit city sales tax in a separate account to segregate it from other business funds. Should a retailer collect tax in excess of the computed tax due, such tax must be reported as excess tax (line 6) and paid to the city.
Deductions & Credits
If a retailer includes the following items in the reported gross sales (line 1), they may be deducted on line 3 of the Periodic Sales and Use Tax Return:
- Refunds/Returned Goods – The taxable purchase price refunded for tangible personal property or taxable services may be deducted if (1) the original taxable purchase price was included in the gross sales of the current Westminster return or any previous Westminster return filed to the extent the statute of limitations has not expired; and (2) the original taxable purchase price and the Westminster sales tax thereon have been refunded in cash or credit to the purchaser.
- Bad Debts – If a taxable sale on account (other than a secured sale) is subsequently found to be worthless, and is actually and properly charged of by the retailer as a bad debt for Federal income tax purposes, the uncollectible amount of the taxable purchase price may be deducted provided that the original taxable purchase price was included in the sales of the current Westminster return or any previous Westminster return filed to the extent the statute of limitations has not expired. If the debt is subsequently collected, the taxable purchase price must be reported on line 2 of the Periodic Sales and Use Tax Return.
- Interest & Finance Charges – If separately stated from the price, interest & finance charges are not subject to sales/use tax. If these charges have been properly exempted, and included in gross sales, they may be deducted.
If the total deductions and credits exceed gross sales, a Claim for Refund form must be submitted with the return.
Westminster sales tax only applies to transactions where delivery of property or services occurs in the City. Westminster retailers need not collect Westminster sales tax on items delivered outside the City. Retailers located outside Westminster making deliveries into Westminster must collect Westminster sales tax.
In determining whether or not a specific address is inside are encouraged to use the electronic location databases certified by the Colorado Department of Revenue. Retailers are cautioned that mailing addresses and zip codes do not coincide with City boundaries and are not a reliable source for determining the taxes due. Refer to Sales Taxes by Address for more information.