Rates last verified: September 4th, 2026
Sources: Colorado Department of Revenue; Colorado Public Utilities Commission; Colorado General Assembly. Full citations at the bottom of this page.
Colorado taxes telephone and telegraph services under its retail sales tax: the provider charges the tax to the customer and remits it with state-administered local taxes. Two things set Colorado apart. First, House Bill 25-1296 extended the state sales tax to interstate telephone service beginning July 1, 2025, so a base that once stopped at the state line no longer does. Second, Colorado's home-rule cities can administer their own sales taxes with their own bases, and the state's guidance does not apply to them.
Quick Facts
| Item | Colorado Treatment |
|---|---|
| State sales tax | 2.9% on telephone and telegraph services (§ 39-26-104, C.R.S.); interstate service taxable since July 1, 2025 (House Bill 25-1296) |
| Local sales taxes | State-administered city, county, and special district taxes collected with the state tax; self-collected home-rule cities administer their own taxes with their own bases |
| Mobile service | Taxable if the customer's place of primary use is in Colorado (4 U.S.C. § 122); local governments may tax it only if that address sits inside their boundaries |
| Voice over Internet Protocol (VoIP) | Taxable as telephone service per the Department of Revenue |
| 911 charges | Emergency telephone charge set by each local 911 governing body, up to $2.17 per line, per month without commission approval, plus a state 911 surcharge of $0.16 per line, per month in 2026 |
| 988 surcharge | $0.30 per line, per month in 2026 |
| Telephone disability access surcharge | $0.08 per line, per month in 2026 |
| Colorado Universal Service Charge | 2.6% on intrastate telecommunications revenue, funding the high cost support mechanism |
| Prepaid wireless at retail | $2.23 911 charge, $0.30 988 charge, and $0.08 telephone disability access charge per retail transaction in 2026; the seller keeps 3.3% for timely remittance |
| Internet access | Exempt (§ 39-26-706, C.R.S.); also protected by the federal Internet Tax Freedom Act |
How Colorado Taxes Telecom Services
Colorado imposes its 2.9% state sales tax on telephone and telegraph services under § 39-26-104, C.R.S. The provider must charge and collect the tax from the customer, along with any state-administered local sales taxes. The taxable base is broad: local exchange service on a flat or measured basis, private line services, leased circuits, call conferencing, routing and switching, service connection charges, and additional listings all count. Universal service fund surcharges and other charges the provider passes on to the consumer are taxable too. Charges for installation or repair are not, and 911, 988, and relay surcharges on the bill carry no sales tax.
The base grew on July 1, 2025. Before that date, Colorado taxed only communication that originated and terminated inside the state. Section 15 of House Bill 25-1296 made interstate telephone and telegraph services subject to the state sales tax from that date forward, and the Department of Revenue revised its telecommunications guidance to match. Mobile telecommunications service follows its own sourcing rule: it is taxable if the customer's place of primary use, the street address where use primarily occurs, is in Colorado, under the federal Mobile Telecommunications Sourcing Act. The Department of Revenue lists Voice over Internet Protocol (VoIP), phone cards, and mobile service as taxable forms of telephone service.
The local layer splits in two. Cities, counties, and special districts whose taxes the state administers get collected on the same return as the state tax, and the Department of Revenue publishes their rates. Self-collected home-rule cities are a different matter: they administer their own sales taxes, define their own bases, and the Department's telecommunications guidance does not apply to them. A provider has to deal with each self-collected city directly, and the Department's Geographic Information System lookup and its Sales & Use Tax System exist to help locate and file them.
The exemptions have clean edges. Internet access services are exempt under § 39-26-706, C.R.S., and the federal Internet Tax Freedom Act bars state and local taxes on internet access; telephone service bundled with internet access stays taxable. Faxing, voicemail, and email services are not taxable, though the telephone service used to reach them is. When taxable and nontaxable services are bundled without separate statement, the provider collects tax only on the taxable share and must keep three years of documentation supporting the split. Wholesale purchases for resale are exempt, and the seller must verify the buyer's sales tax license or collect an exemption form.
911 And Other Per-Line Fees
Colorado funds 911 through two charges. Each local 911 governing body sets an emergency telephone charge for its jurisdiction and collects it from every provider serving its area; from January 1, 2026, a governing body may set that rate up to $2.17 per line, per month without Public Utilities Commission approval, and may go higher with approval. Rates vary by jurisdiction, and the commission publishes the current list and an interactive map. On top of that sits a state 911 surcharge, $0.16 per line, per month in 2026, up from $0.12 in 2025.
Three more per-line charges ride on the bill. A 988 surcharge funds the crisis hotline at $0.30 per line, per month in 2026, up from $0.07 in 2025. A telephone disability access surcharge runs $0.08 per line, per month in 2026; House Bill 25-1154 converted the old telecommunications relay service surcharge into this charge in mid 2025. And the Colorado Universal Service Charge, set by the commission at 2.6% of intrastate telecommunications revenue, funds the high cost support mechanism that supports basic service in high-cost areas.
Prepaid wireless pays at the register instead. Every retail purchase of prepaid wireless service in Colorado carries a 911 charge of $2.23, a 988 charge of $0.30, and a telephone disability access charge of $0.08 per transaction in 2026. The seller collects all three, remits them to the Department of Revenue on the prepaid wireless return, and keeps 3.3% for on-time payment. Wholesale purchases for resale are exempt. The commission also lists a public utilities administration fee, a percentage of intrastate revenue that the Department of Revenue invoices; the state pages pulled for this page publish no rate for it.
Taxability By Service Type
- Intrastate telephone service, including local exchange, private lines, and leased circuits: subject to the 2.9% state sales tax plus applicable local taxes.
- Interstate telephone and telegraph service: taxable since July 1, 2025 under House Bill 25-1296.
- Mobile telecommunications service: taxable when the customer's place of primary use is in Colorado; exempt from Colorado state and state-administered tax when it is not.
- Voice over Internet Protocol (VoIP) and phone cards: taxable as telephone service.
- Sales for resale: exempt at wholesale, with license verification or an exemption certificate.
- Prepaid wireless: pays the flat 911, 988, and telephone disability access charges per retail transaction instead of the per-line surcharges.
- Internet access, email, voicemail, and faxing services: exempt; telephone service used to reach or transmit them stays taxable.
- Installation and repair charges: exempt.
How CereTax Handles Colorado
Colorado's difficulty is the split between state-administered and self-collected jurisdictions, plus a 2025 base change and five separate per-line and per-transaction charges that reset yearly. Every invoice needs the right jurisdiction, the right base for each charge type, and the post-July 2025 interstate rule applied correctly. CereTax assigns each charge to the right jurisdiction at the rooftop level, including self-collected home-rule cities, applies Colorado's base rules by service type, and keeps an audit trail behind every calculation. If you serve customers in Colorado, book a demo and bring a real invoice.
For the full evaluation checklist, see what a telecom tax engine should do.
Sources
- Colorado Department of Revenue, Sales & Use Tax Topics: Telecommunications. Accessed August 28, 2026.
- Colorado Department of Revenue, Colorado Sales Tax Guide, Parts 2 and 3. Accessed August 28, 2026.
- Colorado Department of Revenue, Special Topics: Prepaid Wireless Charges. Accessed August 28, 2026.
- Colorado Department of Revenue, Prepaid Wireless Charge rate page. Accessed August 28, 2026.
- Colorado Department of Revenue, October 2025 tax policy updates. Accessed August 28, 2026.
- Colorado General Assembly, House Bill 25-1296, Tax Expenditure Adjustment, bill summary. Accessed August 28, 2026.
- Colorado Public Utilities Commission, Telecom Surcharges. Accessed August 28, 2026.
- Colorado Public Utilities Commission, High Cost Support Mechanism. Accessed August 28, 2026.
- Internet Tax Freedom Act, 47 U.S.C. § 151 note.
See how other states compare on the telecom tax by state hub.
Note: Always confirm current rates and filing obligations directly with the state’s DOR, PUC, or 911 authority before applying charges or remitting payments.
