Colorado used car dealer paperwork and sales tax guide
How Colorado sales tax works on a used-car deal, how trade-ins and dealer fees are treated, and the title forms and notices a Colorado dealer prints.
Last checked November 14, 2026
This is a plain-language summary of how a used-car deal works out in Colorado: the sales tax, what happens to a trade-in, how dealer fees are treated, and the paperwork a dealer prints. DMS Apex uses these same rules to work out each Colorado deal.
Colorado tax and fees at a glance
| Item | Colorado |
|---|---|
| State tax | 2.9% state rate plus local tax |
| Who pays it | Collected by the dealer |
| Trade-in | Reduces the tax |
| Documentation fee | Part of the taxable amount |
| Service contract | Not taxed |
| Starting title fee in DMS Apex | $0 |
How Colorado sales tax is worked out
Colorado: the dealer collects the 2.9% state tax (confirm the rate on the Department's DR 1002) plus the local tax of the place of sale (enter the combined rate in Settings) on the price, the documentation fee and other charges, less the trade-in. An optional, separately stated service contract and GAP are not taxed. Before the contract is signed Colorado requires a written, signed disclosure of every known material particular (salvage, frame or flood damage, rental or police use). Type your title fee in the Title Fee box. When the dealer delivers the vehicle to the buyer's location, the local tax follows the buyer's location.
Colorado paperwork a dealer prints
DMS Apex prints these documents for a Colorado deal, all in black and white:
- Buyer's Order
- Buyers Guide
This is general information, not legal or tax advice. Colorado rules change: confirm current requirements with the Colorado Division of Motor Vehicles or the Colorado Department of Revenue.
Common questions
How much is sales tax on a used car in Colorado?
2.9% state rate plus local tax. A trade-in reduces the taxable amount. See the table above and confirm the current rate with the Colorado Division of Motor Vehicles or the Colorado Department of Revenue.
Does a trade-in lower the tax in Colorado?
Yes. In Colorado the trade-in allowance reduces the amount the tax is figured on.
Is the dealer fee taxed in Colorado?
Yes. In DMS Apex the documentation fee is part of the taxable amount for Colorado.
Does DMS Apex print Colorado dealer forms?
Yes. It prints Buyer's Order, Buyers Guide.
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