City and County of Denver, Colorado

 TAX GUIDE

Topic No. 13

CONSIGNMENT SALES

 

Any seller who takes goods on consignment must collect sales tax on the full sales price when the goods are sold at retail. Even though the seller (the consignee) may be acting as an agent in selling goods for the consignor, this does not relieve the consignee of the responsibility to collect the sales tax. The DRMC defines the terms "retailer" and "vendor" to include any person who sells goods as an agent for another person or entity (principal) and imposes on them the duty to obtain a sales tax license and to collect sales tax, whenever the principal is not licensed or fails to collect sales tax.

 

EXAMPLES

 

1.     John has a retail outlet for goods made by local artisans. The craftspeople place their goods on consignment with John to be sold to the general public. As the retailer, John must collect sales tax on the sales of the consigned goods.

 

2.     Charlie operates an auction house and takes goods on consignment from businesses seeking to dispose of outdated or overstocked items, estates needing to liquidate assets such as furniture, etc., or anyone with items they want to sell. As the retailer, Charlie must collect sales tax on the sales of the consigned goods.

 

 

RELATED TAX GUIDE TOPIC

Agents: Salespersons, Auctioneers, and Manufacturer's Representatives

 

 

* DRMC Section 53-24(18). Definitions.

* DRMC Section 53-27. Retailers to collect tax.

* DRMC Section 53-28. Retailer responsible for payment of tax.

* DRMC Section 53-76. Retail License Required.

* DRMC Section 53-95(20). Definitions.

* DRMC Section 53-98. Retailers to collect tax.

* DRMC Section 53-99. Retailer responsible for payment of tax.

* DRMC Section 53-146. Retail License Required.

 

THE ABOVE INFORMATION IS A SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT DENVER TAX LAW FOR THIS INDUSTRY OR BUSINESS SEGMENT. IT IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF THE DRMC AND APPLICABLE RULES AND REGULATIONS.

 

Revised 1/95                                                                         13-1