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Colorado: Farmers Markets and Sales Tax

  • Jun 11, 2013 | Gail Cole

 Denver's Stapleton Farmers' Market: Food for human consumption is exempt from sales tax.

Update,6.16.14: The Colorado Department of Revenue has restated the tax requirements for farmers' markets. Like last year, vendors who only sell exempt commodities are not required to obtain a Colorado sales tax licenses. Anyone selling taxable items is required to collect and remit state and local sales tax.

Summer means long evenings and campfires. It means sunshine and swimming, friends and fun. Summer is a time for outdoor concerts, festivals, and street fairs—a time to gather in the streets and celebrate life. And for many farmers, summer means farmers’ markets.

It’s June, and farmers’ markets in Colorado are open for business. In Fort Collins, markets take place Sundays and Wednesdays, rain or shine. Down in Durango, there’s a farmers’ market on Saturday mornings. And in Denver, it’s hard not to stumble across a market during the weekend.

The Sales Tax Skinny

According to the Colorado Department of Revenue, vendors who are “engaged exclusively in the business of selling commodities exempt from state sales tax (such as vegetables, fruit or rice for home consumption) are not required to get a Colorado sales tax license. However, vendors who sell prepared food or “other tangible property” must register with the state and have a Colorado sales tax license.  Think of your favorite farm stand jam and pesto, or the sweet aprons sewn by the farmer’s wife.

That sounds simple enough, but the situation is actually a bit more complex. Per the DOR:

“If the location of the farmers’ market is in a jurisdiction that taxes food for home consumption, farmers or retailers should collect and pay the local tax….”

They may do this on their own (assuming they are registered with the state), or through the market organizer.

It gets better. If state tax is not required but there is a local tax, “the organizer can request to not pay the $50 state sales tax deposit normally required by the Colorado Department of Revenue for a retail sales tax license.”

The Home Rule Factor

Since Colorado is a home rule state, it’s possible that none of the above applies in certain jurisdictions. Vendors are advised to “contact home-rule cities and counties directly for their tax registration, collection and filing requirements.” At least farmers’ markets tend to be local events; presumably vendors know whether or not they’re in a home-rule jurisdiction.

Whether you’re a farmer or a customer, how do you deal with sales tax?

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photo credit: cantorbea via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.