SALT Report 2592 – The Colorado Department of Revenue issued guidance regarding the tax liabilities for vendors at farmers’ markets. Vendors who sell items that are generally exempt from state sales tax, such as vegetables, fruit or rice for home consumption, are not required to obtain a Colorado sales tax license. However, if a vendor at a farmers’ market sells prepared or ready-to-eat foods or other tangible property, that vendor is required to have a Colorado sales tax license.
Additionally, if the location of the farmers’ market is in a jurisdiction that taxes food for home consumption, the vendor will be required to collect and pay the local tax. The vendor can do so by using their personal sales tax license account or by using the account of the market organizer if the vendor is not required to have a license.
If the farmers’ market organizer only collects local sales taxes, because state sales tax is not required, the organizer can request that they not be required to pay the $50 state sales tax deposit that is normally required by the Department for a retail sales tax license.
This information only applies to state collected taxing jurisdictions. Therefore, vendors should contact any home-rule cities and counties in which they do business for their specific tax registration, collection and filing requirements.
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