Denver residents face a complex web of taxes on their everyday purchases, with a 4.81% city sales tax adding to state, regional, and cultural district taxes for a total of 8.81%. Proposed increases could bring the city-only tax to 5.65%, making Denver’s sales tax rate the highest in the area.
Certain items, such as digital products, natural gas fees, and restaurant-prepared food, are subject to sales tax, while everyday groceries and certain food items are exempt. The city also imposes a 10.31% tax on retail marijuana sales and various taxes on alcohol and car rentals.
Denver also collects a use tax on items used, stored, or consumed within the city, with exemptions for certain purchased items. Retailer’s use tax is collected on items delivered to Denver by vendors outside the city.
Residents pay sales tax based on the municipality of their address, regardless of where items are purchased. These various taxes generate more than half of Denver’s general fund revenue.
With the potential for higher taxes looming, residents are urged to understand the intricacies of Denver’s tax system to ensure they are not overpaying on their purchases.
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