Use Tax

What is Use Tax?

Use tax is equivalent to Sales Tax with one distinct difference… it is remitted directly to the taxing jurisdiction by the consumer.  The official Greenwood Village definition of Use Tax is:

Use tax is levied on, “the full purchase price paid for or acquisition cost of tangible personal property and taxable services brought into the city for the purpose of using, storing, distributing or consuming such property and services.  The amount of tax levied is three percent of the purchase price of tangible personal property or taxable services.”

Examples:

1. A desk is purchased and delivered to your office in Greenwood Village, Greenwood Village Sales Tax is charged (total tax charged – 7.35 percent City/State/County/RTD/CD/FD).
   
   No Use Tax is due.  The Greenwood Village Sales Tax charged offsets any Use Tax.

2. A desk is purchased and delivered to your office in Greenwood Village, Greenwood Village Sales Tax is not charged for whatever reason (total tax charged – 4.35 percent State/County/RTD/CD/FD).
   
   Use Tax is due.  The amount is 3.0 percent of the purchase price.

3. A desk is purchased and you pick it up in Unincorporated Arapahoe County.  It is brought back to your office in Greenwood Village.  Only the State, County, RTD, CD and FD Sales Tax has been charged.  (total tax charged – 4.35 percent State/County/RTD/CD/FD).
   
   Use Tax is due.  The amount is 3.0 percent of the purchase price.

4. A desk is purchased and you pick it up in Denver.  It is brought back to your office in Greenwood Village.  Denver, State, County, RTD, CD and FD Sales Tax has been charged.  (total tax charged – 7.60 percent Denver/State/County/RTD/CD/FD).
   
   Use Tax is not due.  The Denver tax was lawfully imposed and offsets the Greenwood Village Use Tax. 

5. A desk is purchased and you pick it up in Centennial.  It is brought back to your office in Greenwood Village.  The Centennial 2.5 percent Sales Tax has been charged.  (total tax charged – 6.85 percent Centennial/State/County/RTD/CD/FD).
   
   Use Tax is due.  The amount due is 0.5 percent of the purchase price.  The Centennial 2.5% Sales Tax only partially offsets the 3.0 percent Greenwood Village Use Tax.

6. A desk is purchased and delivered to your office in Greenwood Village.  A total Sales Tax rate of 7.85 percent has been charged.  You are not sure what City’s tax has been charged. 
   
   Call the vendor and tell them an incorrect Sales Tax has been applied.  Ask the vendor whether they are licensed to collect Greenwood Village Sales Tax.  If the vendor says they are not licensed with Greenwood Village or does not know, pay the vendor only the 4.35 percent State/County/RTD/CD/FD Sales Tax and remit the 3.0 percent Greenwood Village Use Tax directly to the Village.  If the vendor says they are licensed with Greenwood Village, request that the vendor reissue the invoice with the 7.35 percent Greenwood Village/State/County/RTD/CD/FD Sales Tax.

Who pays Use Tax?

Virtually every business will have a Use Tax liability at some time.

Why does Use Tax exist?

Use tax protects local businesses from losing sales to competitors located in an area with a lower Sales Tax rate.  It is also an important revenue source for Greenwood Village.

Is Use Tax unique to Greenwood Village?

No, the majority of cities or states with a Sales Tax have a corresponding Use Tax.

When is Use Tax not due?

Any time the appropriate Greenwood Village Sales Tax has been paid to the vendor.

Any time the purchase is for resale.

Any time another city or county’s lawfully imposed Sales or Use Tax has been paid at a rate equal to or greater than the Greenwood Village Sales/Use Tax rate (3.0 percent)

How do you remit Use Tax to Greenwood Village?

The most common method is by obtaining a Sales/Use Tax License.  This establishes an account with the Village and provides the taxpayer with reporting forms.  Use Tax is due the 20th of the month following the month the purchase was made.

Use Tax may also be submitted to the Village by sending in the payment along with a worksheet.  Worksheets may be obtained by calling the Tax Section at (303) 486-8299.

Use Tax License Application

Use Tax Return