Colorado: Sales Tax Handbook

How to appeal a sales tax audit or penalty in Colorado

In Colorado, the Department of Revenue will frequently audit business sales tax returns and may issue penalties or punishments for tardy filing, incorrect reporting, willful omissions, or other violations. Penalties can range from fines to revocation of your sales tax permit depending on the infraction.

If you disagree with a penalty or ruling made by the Colorado Department of Revenue, you have several options you can pursue in appealing their decision. This page contains basic guidelines for appealing to the Department of Revenue, to an administrative appeal body, and through the courts.

Colorado Sales Tax Statute of Limitations
Appeal to the Colorado Department of Revenue
Administrative Appeals in Colorado
Judicial Appeals in Colorado

Sales Tax Statute of Limitations in Colorado

In sales tax law, the "statute of limitations" is the maximum amount of time state authorities have to investigate and begin potential audit or prosecution related to a a filed Colorado sales tax return in the event of underpayment, incorrect reportings, etc. The Department of Revenue cannot begin an audit or issue a penalty after this timeframe.

The statute of limitations in Colorado is three years from the later of either the return filing date or the tax due date.

Appealing to the Department of Revenue in Colorado

If you do not agree with a penalty or decision made by the Colorado Department of Revenue, you have the right to file an appeal and ask for reconsideration. In the case of a department appeal, an official petition must be filed with the Executive Director of the Department of Revenue less than thirty days after the mailing of notice of deficiency.

Administrative Sales Tax Appeals in Colorado

This state has no administrative appeal body

Judicial Sales Tax Appeals in Colorado

If all other appeal avenues fail, businesses can make a final appeal in the state court system. When working with judicial appeals, the suit must be filed with the District Court within thirty days after the mailing of the determination.

Tax compliance done right

Tired of manually handling sales taxes? Avalara can automate your multi-state sales tax returns, let you know when you've triggered nexus, and more. Request a free demo of Avalara today.

SalesTaxHandbook is a free public resource site, and is not affiliated with the United States government or any Government agency