Colorado's gun and ammunition excise tax — what sellers need to know

Colorado’s 6.5% firearms and ammunition excise tax is one of the few state-level gun-specific excise taxes in the US. It stacks on top of sales tax, not in place of it.

Key takeaways

• Tax rate: 6.5% on the retail sale price of firearms and ammunition
• Effective date: April 1, 2024 (HB23-1219)
• Who collects: the retailer, from the buyer, at the point of sale
• Applies to: all firearms (handguns, rifles, shotguns) and ammunition sold at retail in Colorado or delivered to Colorado customers
• Separate from sales tax: the 6.5% excise tax is in addition to Colorado’s 2.9% state sales tax and any local sales taxes; combined tax on a firearm purchase in Denver could exceed 18%
• Online sellers: remote sellers delivering to Colorado addresses must collect the excise tax; nexus rules for the excise tax mirror Colorado’s economic nexus rules for sales tax
• Registration: sellers may need to register separately for the firearms excise tax with the Colorado DOR; confirm current registration requirements at Colorado.gov/tax
• FFL dealers: licensed dealers handling firearms transfers (FFLs) should confirm whether the excise applies to their transfer fees as well as the underlying firearm value
• Revenue use: Colorado’s law directs excise tax revenue toward gun violence prevention programs and mental health services