When I buy something at a shopping center that charges a Public Improvement Fee (PIF), is that PIF part of the price that gets sales-taxed?

Plain-English summary

Someone asked the Colorado Department of Revenue whether a Public Improvement Fee (PIF) is part of the taxable price when you buy something — i.e., whether sales tax is charged on top of the PIF. The Department's answer: yes, a PIF is included in the purchase price and is subject to sales tax.

A PIF is a private fee — not a government tax. A shopping-center developer or landlord adds it to purchases made at the complex to help pay for things like landscaping, paving, and maintaining parking lots and internal roads on the property.

Colorado sales tax applies to the "purchase price" of what you buy. The law carves a few specific things out of purchase price: direct federal taxes, state/local/special-district sales taxes, and the state retail delivery fee. A PIF is none of those — it's a private charge — so it stays part of the price the consumer pays, and sales tax applies to it.

The Department also noted that some local governments reduce their own sales tax rate at locations that charge a PIF (it cited Lakewood as an example). So at the local level the net effect can be partly offset, but the PIF itself is still inside the taxable purchase price.

This is a General Information Letter — general guidance the Department is not bound by, not a binding ruling.

What this means for you

Retailers at PIF shopping centers

When you ring up a sale at a location that charges a PIF, calculate sales tax on the total that includes the PIF, not on the pre-PIF price. The PIF isn't one of the items the law excludes from purchase price, so leaving it out would under-collect tax. Check whether your local jurisdiction offers a reduced rate at PIF locations, which some do.

Developers and landlords who impose PIFs

Because a PIF is treated as part of the purchase price rather than a tax, the sales tax base at your centers includes the PIF. That's worth communicating to your tenants so they configure their point-of-sale systems correctly.

Shoppers and accountants

If you see both a PIF and sales tax on a receipt, the sales tax is generally calculated on an amount that includes the PIF — which is why the tax can look slightly higher than the shelf price alone would suggest. A PIF is a private fee, not a government tax, even though it can look like one on the receipt.

Common questions

Q: Is a Public Improvement Fee subject to Colorado sales tax?
A: Yes. A PIF is part of the purchase price the consumer pays, and it isn't one of the items the law excludes from purchase price, so sales tax applies to it.

Q: Isn't a PIF a tax? Why is it taxed?
A: No — a PIF is a private fee imposed by a developer or landlord, not a federal, state, local, or special-district tax and not a retail delivery fee. Only those specific government charges are excluded from the taxable purchase price, so the PIF stays in.

Q: Does the PIF make my total more expensive twice?
A: Effectively the PIF is in the base that sales tax is figured on. Note that some local governments lower their sales tax rate at PIF locations to offset this — for example, the Department cited Lakewood.

Q: Can I rely on this letter?
A: Treat it as guidance, not a guarantee. A General Information Letter is not binding on the Department and makes no determination for any specific taxpayer.

Q: Does this cover home-rule city taxes?
A: No. The Department administers state and state-administered local sales and use taxes only. Self-collected home-rule cities set their own rules — check with each city.

Citations and references

Statutes and rules:
- § 39-26-104(1)(a), C.R.S. (sales and use tax on the purchase price of tangible personal property)
- § 39-26-102(7), C.R.S. (definition of "purchase price"; excludes direct federal tax, state/local/special-district sales tax, and retail delivery fees)
- § 43-4-218, C.R.S. (retail delivery fee and enterprise retail delivery fees)
- 1 CCR 201-1, Rule 24-35-103.5 (general information letter and private letter ruling procedure)

Local example cited: Lakewood Municipal Code § 3.01.410.H (2025) (local sales-tax-rate reduction at PIF locations).

Source

• Landing page: Colorado Sales & Use Tax Letter Rulings
• Original PDF: GIL-25-005.pdf

Original ruling text

Office of Tax Policy
P.O. Box 17087
Denver, CO 80217-0087
[email protected]

GIL 25-005
August 21, 2025
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
Via Electronic Mail: XXXXXXXXX
Re: Taxability of Public Improvement Fees
Dear XXXXXXXXX:
You submitted a request for a general information letter regarding whether Public Improvement
Fees (PIFs) are included in the taxable purchase price and subject to sales tax. The Colorado
Department of Revenue (“Department”) issues general information letters and private letter
rulings. A general information letter provides a general overview of the relevant tax issues but is
not binding on the Department. A private letter ruling provides a specific determination for a
specific set of facts, is binding on the Department, and requires payment of a fee. For more
information about general information letters and private letter rulings, please see 1 CCR 201-1,
Rule 24-35-103.5.
Issue
Whether public improvement fees (PIFs) are included in the taxable purchase price and subject
to sales tax.
Discussion
Colorado imposes a sales and use tax on the purchase price paid or charged upon all sales and
purchases of tangible personal property.1 The purchase price is the price to the consumer,
exclusive of any direct tax imposed by the federal government, any state, local, or special
district sales tax, and any retail delivery fee and enterprise retail delivery fees imposed or
collected as specified in section 43-4-218, C.R.S.2
A PIF is a private fee imposed on consumers making purchases at certain shopping complexes
across the state by the developer or landlord of the property. The fee is intended to help pay for
upkeep and public infrastructure improvements to the designated shopping complex, including

1
2

Section 39-26-104(1)(a), C.R.S.
Section 39-26-102(7), C.R.S.

GIL 25-005
August 21, 2025
Page 2
landscaping and paving or maintaining parking lots and internal roads inside the designated
area. Some local governments reduce their sales tax rates with respect to locations with PIFs.3
Because a PIF is not a direct federal tax; a state, local, or special district sales tax; or a retail
delivery fee, it is included in the price the consumer pays to make a purchase. As a result, a PIF
is included in the purchase price and is subject to sales tax.
Miscellaneous
This letter represents the good-faith opinion of Department personnel who are knowledgeable
on state taxes issues. However, the Department does not make a specific determination on any
of the issues raised, and the Department is not bound by this general information letter.
The Department administers state and state-administered local sales and use taxes. This letter
does not address sales and use taxes administered by self-collected home-rule cities. You may
wish to consult with those local governments that administer their own sales or use taxes about
the applicability of those taxes. Visit our website at Tax.Colorado.gov for more information about
state and local sales taxes.
Thank you for your request.
Sincerely,

Office of Tax Policy
Colorado Department of Revenue

3

E.g., Lakewood Municipal Code § 3.01.410.H (2025).