Use Tax

Definition

Use tax is a compensating tax equal to the city sales tax, due on all items on which no local sales tax was paid or on which a lesser local sales tax was paid.

Initial Use Tax

If you acquire or open a business location in Wheat Ridge, complete the Initial Use Tax Form. Initial Use Tax is due on business equipment, furniture, and fixtures. If the items are acquired as part of a business acquisition, tax is based on the greater of stated values in the contract or the values to be filed for county property tax purposes. If your business was acquired in a stock purchase, no initial use tax is due. If the business is a new opening, initial use tax may be due on the items put in place to be ready for opening. See below and the linked resources for more information.

Other Purchases

Use tax may also be due on purchases made for operating supplies, furnishings, equipment, and fixtures. What is taxable at the city level differs from what is taxable at the State level. Suppliers often rely on State rules in preparing invoices, which creates potential for unpaid City Use Tax that would be assessed with penalty and interest were your company to be audited. (Part II-Code of Laws, Chapter 22-Taxation, Article 1-Sales and Use Tax, Division 3-Use Tax.)

Individuals' Purchases

The city does not enforce use tax on individuals. If an individual makes purchases without paying sales tax, they may choose to voluntarily remit tax to the city at year-end by using the sales and use tax return form and marking it "one-time remittance individual."