Colorado Expands Sales Tax to SaaS and Downloaded Software Beginning Jan. 1, 2027

Short summary

Colorado's HB 26-1223, enacted June 4, 2026, expands sales and use tax to most downloaded and remotely accessed software including SaaS and mobile apps, effective Jan. 1, 2027. Custom software and individually negotiated license agreements remain exempt, but standard-form and click-through agreements do not qualify. Businesses selling software into Colorado must reassess taxability, billing, and compliance systems before the law takes effect.

• •Colorado taxes SaaS and downloaded software starting Jan 1, 2027 under HB 26-1223
• •Custom software and negotiable license agreements are exempt; standard click-through terms are not
• •Home-rule cities retain independent taxing authority, requiring jurisdiction-by-jurisdiction analysis

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