(Colorado Sales Tax for Farmers’ Markets Information Courtesy of the Colorado Department of Revenue)
Farmers’ markets season is upon us. Persons 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.
If the farmer or retailer at a farmers’ market sells prepared (ready-to-eat) food or other tangible property, that business should have its own Colorado sales tax license.
Additionally, 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 either on their own sales tax license account or through the account of the market organizer if the farmer/retailer is not required to have a sales tax license. If the farmers’ market organizer is only collecting applicable local sales tax (because state sales tax is not required), 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.
Please note this information pertains only to state-collected tax jurisdictions. Vendors should contact home-rule cities and counties directly for their tax registration, collection and filing requirements. To find out whether a city or county is home-rule and to check all state and local sales tax rates, see the publication DR 1002.