| Agency | City of Colorado Springs Sales Tax Office, separate from the Colorado Department of Revenue |
|---|---|
| Form or step | Account Maintenance Form to close the account, plus a final city sales tax return |
| Timing | Once taxable sales stop, which for a sale is the closing date |
Watch for this: The city license does not transfer. If you never close it, returns keep coming due in your name.
Two Sales Tax Accounts, Not One
Most Colorado cities let the state Department of Revenue collect their local sales tax. Colorado Springs is a home rule city that runs its own Sales Tax Office, with its own license, its own returns and its own rules.
A retailer inside city limits usually holds a state sales tax license and a separate Colorado Springs license. Selling the company means dealing with both.
The City License Stays With You
The city treats a sales tax license as belonging to the taxpayer, not the storefront. It is not transferable.
When a new owner with its own federal employer number takes over, the city expects that owner to register a new account through its online business registration.
That includes most asset sales, where the buyer forms a new company to buy the assets. In a stock sale, where the same legal entity continues under new owners, ask the city how it wants the change reported.
Closing Your Account
City rules require a taxpayer to notify the Sales Tax Office when it stops making taxable sales.
The tool for that is the city's Account Maintenance Form, which asks for a closure date and the reason for closing. The city does not charge a fee to process it, and the form is emailed to the Sales Tax Office.
Then file a final return covering sales through the closing date. The city return has a place to enter a cancellation date.
Keep proof that you closed the account. If the buyer keeps selling under your old number by mistake, you want a clear record of the date your responsibility ended.
Settle Sales Tax at Closing
Sales tax you collected from customers belongs to the city and the state, not to the business. Buyers worry about inheriting unpaid tax, so expect the purchase agreement to require that all returns are filed and paid through closing.
A clean history makes this easy. If you have had an audit or a payment plan, tell your broker early so it does not surface in due diligence.
Do Not Forget the State Account
Closing the city license does nothing to your Colorado sales tax account. The state has its own closure process through Revenue Online or its Business Tax Account Closure Form.
Our page on closing your Colorado withholding account covers the state side for payroll, and the same closure request can list your state sales tax account.
Buyers also often ask for a Colorado tax status letter showing nothing is owed to the state.
Use Tax on Equipment
Colorado Springs also has a use tax on taxable items bought without paying city sales tax. In an asset sale, the transfer of equipment can raise sales or use tax questions for the buyer.
That is mostly the buyer's issue, but it can affect how the price is split, so raise it with your CPA.
Who to Ask
The city Sales Tax Office answers questions at (719) 385-5903. Law firms that handle Colorado acquisitions and the city's own published sales tax guidance are good places to confirm the current process.
This page is general information, not tax or legal advice, so confirm your situation with your CPA or attorney.
Other filings sellers meet are listed under tax and license steps. If you are still deciding whether to sell, start with a confidential valuation.