Generally, the 3.85% city sales tax must be collected on all sales, leases or rentals of items in the city, including items delivered into the city. Certain services, such as cable TV, telephone, gas and electric services, are also taxable. Professional services such as legal, advertising and accounting services are generally not taxable.
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 is comprised of the following:
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Adams
County
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Jefferson
County
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City of Westminster
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3.85%
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3.85%
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State of Colorado*
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2.90%
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2.90%
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Regional Transportation District (RTD)*
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1.00%
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1.00%
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Cultural District (CD)*
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0.10%
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0.10%
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County (Adams or Jefferson)*
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0.75%
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0.50%
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Total
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8.60%
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8.35%
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* 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.
Exempt Sales
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 is 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.
Qualifying exempt organizations are eligible to make purchases tax free, if the purchase meets all required qualifications. Refer to the list of Tax Exempt Certificate Holders to determine if an organization currently holds a valid Certificate of Tax Exemption from the city.
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:
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:
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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.
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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.
Deliveries
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.
Sales Tax by Address
The City of Westminster is located in two counties and 10 different USPS zip codes, eight of which are shared with other municipalities. These zip code boundaries do not coincide with city boundaries and many do not use "Westminster" as the city name. Therefore, you cannot rely upon mailing address or zip code to determine whether or not a particular location is within the city boundaries.
Retailers are liable to the city for underpayments resulting from improper collection. As such, retailers are encouraged to utilize the electronic location databases certified by the Colorado Department of Revenue pursuant to Colorado Revised Statutes § 39-26-105.3 to determine the correct jurisdiction for sales tax purposes. To encourage use of these databases, Westminster, along with a number of other home rule municipalities, have enacted provisions which will hold harmless retailers who rely on the most current version these databases if the database erroneously returns the wrong jurisdiction for a particular address.
For additional information on verifying addresses using currently certified database providers, including links to the providers' websites, visit the Colorado Department of Revenue. You may also refer to Tax Compliance Guide topic 364 for additional information on Westminster's safe harbor.
If you are located in the city, but your address is in a zip code with a city designation other than "Westminster," be sure that your vendors are aware of the correct jurisdiction for your address. Carefully check all purchase invoices to be sure they include Westminster sales tax at the proper rate. This will help ensure that you are paying the proper sales tax on your purchases and help prevent penalty and interest charges. Note that a full Westminster use tax is due on items delivered into the city even if a vendor erroneously collects sales tax for another jurisdiction. The safe harbor discussed above does not apply to use tax.