Can a Colorado wholesaler without a state-issued sales tax license use the Multistate Tax Commission's Uniform Sales & Use Tax Resale Certificate to buy tax-free?

Plain-English summary

The Colorado Department of Revenue explained how a wholesaler can document a sales-tax exemption when it doesn't hold a state-issued Colorado sales tax license. The short version: the popular Multistate Tax Commission (MTC) Uniform Sales & Use Tax Resale Certificate is off the table, because that certificate requires the signer to attest that the business is registered for sales/use tax in the states and cities where the seller would deliver — an attestation an unlicensed business can't truthfully make. But that doesn't leave an unlicensed wholesaler stuck paying tax: it can instead give the seller Colorado's own form DR 5002, Declaration of Wholesale or Entity Sales Tax Exemption, which doesn't require a license number the same way.

Either way, the burden stays on the seller. Colorado law puts the burden of proving an exemption on the seller, who must exercise "due diligence" — collecting either DR 5002 or the MTC certificate (or equivalent documentation), verifying it, and satisfying itself that the goods are reasonably intended for resale in the purchaser's ordinary business. If the seller can't resolve doubt about eligibility, it must collect the tax at the time of sale; the purchaser can then seek a refund from the Department using form DR 0137B.

What this means for you

Wholesalers without a Colorado sales tax license

Colorado doesn't require a business that sells exclusively tax-exempt commodities to hold a sales tax license at all. If you're in that position (or otherwise don't have a license), you can still buy inventory tax-free from a Colorado seller — just use form DR 5002 instead of the MTC resale certificate. If you'd rather have a formal wholesaler license, you can apply for one using form CR 0100.

Sellers accepting exemption certificates

You're the one on the hook if an exemption claim turns out to be invalid, so due diligence matters: verify the purchaser's license or certificate is current (via the Department's online lookup or by inspecting a physical copy), keep a copy for your records, and satisfy yourself the goods are actually being purchased for resale. If a purchaser hands you an MTC certificate but doesn't actually hold a sales tax license anywhere it lists, that certificate isn't valid documentation — ask for DR 5002 or other adequate proof instead.

Accountants and tax professionals

This GIL is a clean statement of the mechanical difference between the two standard exemption-documentation paths: the MTC certificate (license-attestation-based, useful for multistate resale documentation) versus Colorado's own DR 5002 (doesn't hinge on holding a state sales tax license). Useful to cite when a client's wholesale customer can't produce an MTC certificate.

Common questions

Q: Can any wholesaler use the MTC Uniform Sales & Use Tax Resale Certificate in Colorado?
A: Only if the wholesaler holds a valid, state-issued sales tax license or exemption certificate in the jurisdictions the certificate lists — the certificate itself requires attesting to that registration.

Q: What can an unlicensed wholesaler use instead?
A: Colorado Department of Revenue form DR 5002, Declaration of Wholesale or Entity Sales Tax Exemption, or other adequate documentation of exemption eligibility that the seller retains for its records.

Q: Who is responsible if an exemption claim turns out to be wrong?
A: The seller bears the burden of proving the exemption and must exercise due diligence in verifying the purchaser's documentation; if in doubt, the seller must collect the tax, and the purchaser can then apply for a refund on form DR 0137B.

Q: Is this letter binding on the Department?
A: No. A General Information Letter is explicitly not binding — it's the good-faith opinion of Department personnel giving general guidance, not a determination on specific facts. For a binding answer, a taxpayer would need to request a private letter ruling.

Q: Does this cover city sales tax too?
A: No. The Department administers state and state-administered local sales tax only. Colorado's self-collected home-rule cities set their own rules — check with each one separately.

Citations and references

Statutes and rules:

• § 39-26-104(1)(a), C.R.S. (imposition of sales tax on retail sales)
• § 39-26-105(3)(a), C.R.S. (seller's burden to prove an exemption)
• § 39-26-103(6), C.R.S. (no license required for exclusively exempt-commodity sellers)
• § 39-26-103(8)(a), C.R.S. (wholesaler license application, form CR 0100)
• 1 CCR 201-4, Rule 39-26-105-3 (seller due-diligence and documentation requirements)
• 1 CCR 201-1, Rule 24-35-103.5 (GIL/PLR procedure)

Source

• Landing page: Colorado Sales & Use Tax Letter Rulings
• Original PDF: GIL-26-001.pdf

Original ruling text

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

GIL 26-001
June 9, 2026
XXXXXXXXX
Via Electronic Mail: XXXXXXXXX
Re: Claiming a Wholesale Exemption Without a Sales Tax License
Dear XXXXXXXXX:
You submitted a request for a general information letter regarding how to claim a wholesale
exemption without a sales tax license. 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 a wholesaler without a state-issued sales tax license may use the Multistate Tax
Commission's Uniform Sales & Use Tax Resale Certificate to claim an exemption on purchases
made in Colorado.

Discussion

Colorado imposes a sales tax on the retail sale of tangible personal property, unless a specific
sales tax exemption applies. For any sale of tangible personal property on which the purchaser
claims an exemption from sales tax, the burden is on the seller to prove they are exempt from
collecting the tax on the purchase. The purchaser must provide information regarding the
claimed exemption to the seller at the time of the sale, and the seller must exercise due
diligence in verifying the information provided and determining the purchaser's eligibility for the
exemption. If the seller cannot resolve any doubt the purchaser's eligibility for the exemption,
the seller must collect the tax at the time of sale. Then the purchaser may request a refund from
the Department by submitting form DR 0137B, Claim for Refund of Tax Paid to Vendors.

When exercising its required due diligence, the seller must first obtain and retain sufficient
information from a purchaser claiming a sales tax exemption. The seller may collect the
required information by obtaining from the purchaser a completed Department form DR 5002,
Declaration of Wholesale or Entity Sales Tax Exemption, or the Multistate Tax Commission's
Uniform Sales & Use Tax Resale Certificate. Alternatively, the seller may obtain the required
information in another format for its records.

A purchaser may only use the Multistate Tax Commission's Uniform Sales & Use Tax Resale
Certificate if it has a state-issued sales tax license or exemption certificate. The attestation on
this form begins, "I certify that [the business]...is registered for sales/use tax with the below
listed states and cities within which Seller would deliver purchases to Buyer…" By signing this
form, the business' representative is attesting that they hold a valid sales tax license in those
jurisdictions. If the business does not have a valid sales tax license in those jurisdictions, it
cannot make the attestation and would not be eligible to use the Multistate Tax Commission's
certificate.

Colorado does not require any person engaged exclusively in the business of selling
commodities that are exempt from taxation to obtain a sales tax license. However, any person
operating exclusively as a wholesaler may apply to the Department for a wholesale license
using form CR 0100, Colorado Sales Tax and Withholding Account Application. Alternatively, a
purchaser without a wholesaler license may complete form DR 5002. A seller may accept this
form as part of their due diligence in verifying the purchaser's exemption eligibility.

As explained above, a wholesaler without a state-issued sales tax license may not use the
Multistate Tax Commission's Uniform Sales & Use Tax Resale Certificate to claim an exemption
on purchases because they are unable to make the attestation. However, a seller may accept
Department form DR 5002 from a purchaser without a state-issued sales tax license.
Regardless of what form is used, the seller is obligated to exercise due diligence and verify the
information provided and the purchaser's exemption eligibility. In general, a seller must verify
that the purchaser's state-issued sales tax license or exemption certificate is valid and current,
either by using the Department's online verification system or by inspecting a physical copy of
the license or certificate and maintaining a copy for their records. For an out-of-state
purchaser, a seller may accept an out-of-state resale license, exemption certificate, or other
authorized documentation from the issuing state. For a wholesale exemption, the seller must
also reasonably conclude that the goods sold are reasonably for resale in the course of
purchaser's ordinary business. The purchaser must discuss with the seller what information
they need to resolve any doubts about an exemption claim.

Miscellaneous

This letter represents the good-faith opinion of Department personnel who are knowledgeable
about state tax 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