Colorado alcohol tax permits and rules

DTC License Required: Yes

License Type: DTC Permit

License Fee: $100

License Expiration: 1 year from issue date

License Bond: No

State Sales Tax: Only wineries having $100,000 or more of gross sales delivered in Colorado in the previous or current calendar year will be required to collect Colorado sales tax.

State Sales Tax Rate: 2.900%

Local Sales Tax: Yes

Local Sales Tax Range: 0%-8.3%

Sales Tax on Shipping: No

Liquor Tax: $0.0733/L

Wine Development Fee: $0.01/L

Consumer Limit: Unlimited

Per State Aggregate: Unlimited

Required? Yes

Sales Tax & Use Tax: The 20th of the month following the end of the reporting period. Filed monthly. Note, this requirement is dependent on sales tax nexus status.

Excise Tax: Monthly by the 20th

Direct Shipment: N/A

Record Retention: At least 3 years

Product Restrictions: Only wines produced or bottled by the permittee may be sold and shipped to consumers.

Product Registration: No

Product Requirements: Wine sold and shipped directly to consumers in Colorado must be packaged in containers conspicuously labeled to indicate alcoholic contents and the signature of a person 21 years of age or older is required for delivery.

*Nearly all states have some kind of rule regarding how wine must be labeled when being shipped direct to consumer. Please check for the unique rule for your state.

Tax can get complicated when it comes to direct-to-consumer (DTC) shipments. The beverage alcohol industry is different from other industries in that licensed alcohol shippers are required to register for sales tax in most states, independent of economic or physical nexus.

Depending on the state, sales and use tax can be applied at the state, county, city, or special district levels. Address accuracy is important to determine if a location falls into an incorporated or unincorporated section of a county or a special district.

On top of the sales tax requirements, alcohol taxes also apply to DTC shipments. Several states have “markup” taxes, where the retail value of the alcohol is multiplied by a percentage rate. Most of these markup taxes are either required or can be passed through to the consumer. 

Traditional “gallonage”-based excise taxes are also usually due on DTC shipments. Most of the time these are factored into the price of the item and not passed through to the consumer. In a few cases, these excise taxes are required to be passed on to the consumer.

Rules and regulations for your winery, brewery, or other beverage alcohol business change frequently. Avalara for Beverage Alcohol helps distill the beverage alcohol compliance process so you can focus on your business.

Colorado DOR site

Please note: Tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this page is for informational purposes only and does not provide legal or tax advice.