Colorado (CO) Vehicle Sales Tax & Fees [+ Calculator]

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Michael Collado

Michael Collado

Michael Collado is a car buying expert and has been a professional automotive writer since 2009.  He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships.  Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.

Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.

Are you planning to purchase a new or a used vehicle in the state of Colorado?

Make sure you know the rules that govern sales tax on vehicle purchases before you break out your checkbook. There could be some tax exemptions you may qualify for in Colorado.

Our car experts did the research for you to streamline your car-buying experience.

Here’s what you need to know about Colorado sales tax on vehicle purchases.

The state vehicle sales tax rate in Colorado is 2.9%, but counties and cities can charge local taxes. On average, you can expect to pay 6.31% sales tax unless you qualify for an exemption.

Understanding Car Sales Tax in Colorado Video

How Much Is the Car Sales Tax in Colorado?

The current sales tax in Colorado is 2.9%.

It's important to note, this does not include any local or county sales tax, which can go up to 8.3%, for a total sales tax rate of 11.2%.

However, the average total tax rate in Colorado is 6.319%.

How to Calculate Colorado Sales Tax on a Car

To calculate the sales tax on your vehicle, find the total sales tax fee for the city. The minimum is 2.9%. Multiply the vehicle price (after trade-ins but before incentives) by the sales tax fee.

For example, imagine you are purchasing a vehicle for $50,000 with the state sales tax of 2.9%. The trade-in value of your vehicle is $10,000 and you have a $1,000 incentive. The total taxable amount is $40,000 since trade-ins are not taxable, but incentives/rebates are.

In this example, multiply $40,000 by .029 to get $1,160, which makes the total purchase price, $40,160 (account for the incentive).

Calculate Car Sales Tax in Colorado Example:

• Initial Car Price: $50,000
• Sales Tax Rate: 2.9%
• Trade-In Amount: $10,000
• Incentive/Rebate Amount: $1,000

Sales Tax = ($50,000 - $10,000) * .029
Sales Tax = $1,160

Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.

Do I Have to Pay Sales Tax on a Used Car?

The sales tax on a used car purchase is 2.9%, which is the same rate for new cars in Colorado.

Which County Has the Highest Tax?

The highest sales tax in Colorado is in Grand County, with Winter Park having the highest sales tax in the state. When you add the state sales tax with the Grand County sales tax, you will get a total of 11.2%.

Which County Has the Lowest Tax?

The lowest sales tax in Colorado is in Baca County. When you add the state sales tax with the county sales tax, you will get a total of 4.9%.

However, some cities in Baca, Cheyenne, Kiowa, and Kit Carson Counties have the minimum state sales tax of 2.9%.

Car Sales Tax for Trade-Ins in Colorado

You do not have to pay a sale tax on the trade-in on your vehicle in the state of Colorado.

In other words, when calculating sales tax, be sure to subtract the trade-in amount from the car price.

Let’s say that you're purchasing a new car for $45,000 and your trade-in is valued at $5,000. This would put your new vehicle purchase price at $40,000, which is the taxable amount.

Car Sales Tax on Private Sales in Colorado

You will have to pay sales tax on any private car sales in Colorado. The rate is 2.9%.

For instance, if you purchase a vehicle from a private party for $20,000, then you will have to multiply that amount by .029 to get $580. That brings the total to $20,580.

Tax on Rebates & Dealer Incentives

In Colorado, you must pay the full vehicle sales tax even when there is an incentive or rebate on the car.

In other words, do not subtract the incentive amount from the car price before calculating the sales tax amount.

As an example, let’s say you want to purchase a new truck for $35,000 and the dealer provides a $2,500 rebate. You still have to pay a sales tax on the $2,500 rebate. Therefore, the taxable amount is $35,000.

Colorado DMV & State Fees

Colorado charges the following DMV and state fees:

Vehicle Registration

Fees are based on the total weight of the vehicle.

• Motorcycles: $3.00
• Vehicles up to 2,000 pounds ($.20 per extra 100 pounds): $6.00
• Vehicles from 2,001 pounds to 4,500 pounds: $12.50
• Plug-in Electric Vehicle: $50.00

Colorado Dealership Fees

Colorado dealerships may charge the following fees:

• Dealer Service & Handling: ~ $598
• Transport Fee: $600 to $1,500.
• Document Fee: ~ $490 (No Statewide Limit)
• Inspection Fee: $7 to $30

When Sales Tax Is Exempt in Colorado

You can avoid paying sales tax on a car sale if you purchase the vehicle in a state with no sales tax and register it in Colorado.

Also, if the vehicle is sold in the state of Colorado but is going to be moved out of the state within 30 days.

Colorado EV Rebates & Incentives

Colorado residents are able to claim up to a $2,800 rebate, in addition to the federal tax credit, when they purchase an EV and register it with the state.

Tax information and rates are subject to change, please be sure to verify with your local DMV. 

Frequently Asked Questions

What is the sales tax on a car purchased in Colorado?

The state sales tax on a vehicle purchase in the state of Colorado is 2.9%. This does not count the county and city taxes which will make the total purchase price higher.

Do I have to pay sales tax on a used car in Colorado?

Yes, when purchasing a used car in Colorado, you will indeed be required to pay a sales tax, which is currently set at 2.9%. However, it's essential to note that this rate is the state's base tax. There can be additional local city, county, and special district taxes, which could potentially increase the total amount of sales tax you pay. These local taxes can vary quite significantly across different areas within the state. But if it's a private sale, you might need to pay the sales tax directly to the Colorado Department of Revenue when you register the vehicle.

Which county in Colorado has the lowest tax?

The county with the lowest sales tax in Colorado is Baca County. When you add the state sales tax with the county sales tax, you will get a total of 4.9%.

Which county in Colorado has the highest tax?

The county with the highest sales tax in Colorado is Grand County. When you add the state sales tax with the county sales tax, you will get a total of 11.2%.

Do I have to pay sales tax on a gifted car in Colorado?

You do not have to pay tax on a gifted vehicle in Colorado.

How much is registration in Colorado?

Vehicle registration in Colorado is determined by the weight and the type of vehicle.

• Motorcycles: $3.00
• Vehicles up to 2,000 pounds ($.20 per extra 100 pounds): $6.00
• Vehicles from 2,001 pounds to 4,500 pounds: $12.50
• Plug-in Electric Vehicle: $50.00

Does a trade-in reduce sales tax in Colorado?

Yes. The value of a trade-in is not taxed. For instance, if you purchase a new truck for $45,000 and the value of your trade-in is $12,000, then you will only have to pay sales tax on the $33,000.

How can I avoid paying sales tax in Colorado?

You can avoid paying sales tax in Colorado by having the vehicle gifted to you. Also, vehicles that are purchased out of state are exempt from sales tax in Colorado. Finally, you can avoid sales tax in Colorado if you purchase your vehicle in the state and transport it out of the state within 30 days.