Certain Colorado business in the food & beverage service industry may enjoy a state sales tax holiday for eligible months in 2020 and 2021.
Colorado HB21-1265, enacted in June 2021, allows restaurants, bars, food trucks, caterers & food service contractors to deduct state sales taxes from their returns in June, July and August 2021. This bill is essentially an extension of HB20B-1004, which Colorado legislators passed in December 2020 to provide state sales tax relief to non-hotel operated restaurants & bars, and food trucks in November & December 2020, and January & February 2021.
If your business qualifies for this special tax deduction but you have already paid your state sales taxes for an eligible period, you may claim a refund from the CO Department of Revenue. To claim sales tax relief in the current reporting period, simply take the deduction in the state column of Section B.
Eligible retailers are still required to collect all applicable state and state-administered local sales taxes, file returns on time, and pay all local sales taxes (in addition to state sales taxes in excess of the amount related to the special deduction). The special deduction does not apply to any taxes imposed by any state-administered city, county, or special district.
Visit Tax.Colorado.gov/Sales-Tax-Relief for eligibility details and filing instructions.
VIDEO: How to claim Colorado state sales tax relief for restaurants, bars, caterers & food trucks in 2020 & 2021
Watch our short video for guidance on which entities are eligible for relief & when, how to claim the special sales tax deduction in the current period, and how to amend a return to claim a state sales tax refund.
Note: To skip to a specific part of the presentation, click the bullet-list icon in the player control bar to select a chapter.
More Resources
- CDOR Info Page on COVID-19 Sales Tax Relief for Bars, Restaurants, Caterers and Mobile Food Retailers
- Colorado Sales Tax Relief Filing Tips
- CO Special Sales Tax Deduction Eligibility & Filing Instructions for June, July & August 2021 Tax Periods
- Restaurant, Bar & Food Services Contractors (also hotel-operated restaurants, bars & caterers)
- Mobile Food Vendors
- Catering Industry
