If you are planning to set up a booth at a bustling local festival or a quaint holiday market, understanding the Colorado Special Event Tax is just as important as bringing enough inventory. Whether you are an artist selling handmade jewelry, a food truck owner slinging tacos, or a boutique popping up for the weekend, the state of Colorado requires you to play by specific rules when it comes to collecting and remitting sales tax. This guide is designed to walk you through the entire process, from obtaining your special event sales tax license to filing your final return, ensuring that you remain compliant while you capitalize on the foot traffic. We will cover the critical differences between a single event license and a multiple event license, explain when you might be exempt if an organizer is handling the taxes for you, and break down the deadlines that, if missed, could lead to pesky fines. By the time you finish reading, terms like DR 0589 application and state-administered local sales taxes will feel less like legal jargon and more like simple checkpoints on your road to a successful event season. So, grab your calculator and let’s demystify the tax obligations that come with being a mobile vendor in the Centennial State.
Who Needs A Special Event License?
In Colorado, the rule of thumb is simple: if you are making retail sales at a location other than your regular business place, you likely need a special event license. This applies to everyone from established businesses to hobbyists selling crafts. A “special sales event” is defined as an event where retail sales are made by more than three sellers at a location other than their normal business location.
There are generally two types of licenses you can apply for using the DR 0589 form:
- Single Event License: Perfect for a one-off opportunity. It costs $8 per event.
- Multiple Event License: Ideal if you plan to hit the festival circuit. This costs $16 and covers you for a two-year period (renewing every even-numbered year).
The only major exception is if the event organizer has obtained a license to collect and remit taxes on behalf of all the vendors. In that case, you might be off the hook for filing your own return, but you must confirm this with the organizer explicitly.
Collecting The Right Amount
One of the trickiest parts of the Colorado special event tax is that tax rates change based on where you are standing. Colorado is a “home rule” state, which means different cities and counties can administer their own taxes. When you sell at an event, you must collect:
- State Sales Tax: The base rate for Colorado.
- State-Administered Local Taxes: County and special district taxes (like RTD or scientific and cultural facilities districts).
- Home Rule City Taxes: If the event is in a self-collecting home rule city (like Denver or Colorado Springs), you might need a separate license and return for that specific city.
Always check the “DR 1002” publication before the event to look up the exact combined tax rate for the event’s location.
Filing Your Return And Deadlines
Once the tents are packed away, the clock starts ticking. You must file your special event sales tax return (Form DR 0098) by the 20th day of the month following the event. For example, if you sold goods at a 4th of July market, your return and payment are due by August 20th.
You can file this easily through the Revenue Online portal. Even if you made zero sales, or if you already collected tax under your standard license, the state often still expects a specific special event return to close out that temporary location. Failing to file can result in estimated assessments where the state guesses how much you owe—and they usually guess high!
FAQs
Q: Do I need a license if I only sell at one craft fair a year?
A: Yes, unless the event organizer is collecting and paying the tax for you, you need a Single Event License.
Q: Can I just use my standard sales tax license?
A: Generally, no. Special events require a separate special event license because the sales occur at a temporary location different from your main business address.
Q: What happens if I forget to file after the event?
A: You may receive a “non-filer estimate” bill including penalties and interest. You should file the return immediately, even if it’s late, to correct the balance.