Selling Gold in Colorado: Taxes, Dealer Rules and How to Prepare

Sales Tax in Colorado: Bullion and Coins Are Exempt, Jewelry Is Not

Colorado belongs to the sizeable group of states that have removed sales tax from investment-grade precious metals. C.R.S. 39-26-706(4) exempts “all sales of precious metal bullion and coins” from both the 2.9 percent state sales tax and the use tax, with no dollar threshold. The underlying definitions in C.R.S. 39-26-102 reach gold, silver, platinum and palladium bullion along with coins that are, were, or will be legal tender under U.S., Colorado or any foreign law. The Colorado Department of Revenue administers the state tax at tax.colorado.gov/sales-use-tax.

For a private seller walking into a Colorado dealer, the practical consequence is simple: the dealer owes no state sales tax on the purchase of your bullion coins, bars or rounds. Sales tax is a dealer-side issue on the retail resale, not a line item on your sale to the dealer, and the exemption applies with no minimum, from a single one-ounce American Silver Eagle to a six-figure allocated bar order.

Home-Rule Cities Set Their Own Local Tax

Colorado’s constitution lets municipalities adopt home-rule charters, and more than 70 Colorado cities have done so. Denver, Boulder, Colorado Springs, Aurora, Fort Collins, Lakewood, Thornton, Westminster, Greeley and others administer their own sales and use tax separately from the state. A state exemption under 39-26-706(4) does not automatically bind a home-rule city’s municipal tax. State-collected jurisdictions, which include most counties and non-home-rule towns, follow the state exemption directly. For a Colorado-wide breakdown with worked examples, see sales tax on bullion in Colorado.

What Still Gets Taxed in Colorado

The exemption stops at bullion and monetized metal. The following are typically taxable at the state level:

• Jewelry sold as jewelry (22-karat chains, rings, pendants) at the standard 2.9 percent state rate plus any applicable local rate
• Rhodium bullion and other non-enumerated metals outside the gold, silver, platinum, palladium list
• Numismatic supplies, display cases, loupes, cotton gloves and other accessories
• Coins mounted into jewelry, which lose the exemption and are taxed as jewelry

For sellers walking into a dealer with jewelry, this is a dealer-side detail: your sale to the dealer is still outside the sales tax base. If you are also buying from the same dealer on the same visit, the exemption treatment on each line of the invoice depends on the product category.

Colorado Income Tax on Gold Gains: 4.4 Percent Flat Rate, No Bullion-Specific Exclusion

Colorado taxes individual income at a flat statewide rate of 4.4 percent. Capital gains, including long-term gains from the sale of physical precious metals, flow into the state base as ordinary income and are taxed at the same flat rate. Colorado’s broader capital gains subtraction was repealed for most taxpayers effective tax year 2022, which closed a long-standing partial exclusion that had applied to certain qualified assets. There is no bullion-specific state exclusion today; the full long-term or short-term gain is taxed at 4.4 percent on the Colorado return.

Federal Collectibles Capital Gains Rules (Apply First)

At the federal level, the IRS classifies physical gold, silver, platinum and palladium as collectibles under Internal Revenue Code Section 408(m), and Section 1(h)(4) caps the maximum federal long-term capital gains rate on collectibles at 28 percent. That is higher than the 0, 15 or 20 percent rates that apply to most stock and bond gains held over one year. Short-term gains are taxed at your ordinary federal income tax rate. For the authoritative text, see 26 U.S. Code 1(h) and 26 U.S. Code 408(m). For distributions from retirement accounts that hold metals, see IRS Publication 590-B.

Calculating Your Taxable Gain

Your taxable gain is calculated once at the federal level, then flows through to the Colorado return:

• Start with the sale price you received from the Colorado dealer
• Subtract your cost basis: what you originally paid for the metal, plus documented acquisition costs such as dealer premiums, shipping, insurance and assay fees
• The remaining amount is your net gain, reported federally on Schedule D and Form 8949 with collectibles treatment, and on your Colorado Form DR 0104 as part of your federal taxable income flowed to the state

If you sold several items in the same tax year, you can generally net losses against gains within the same category before applying the rate. Clean records keep the gain well-documented. Purchase receipts, dealer invoices, shipping records and assay certificates belong in a dedicated folder for every bullion purchase, electronically or on paper.

A Worked Example (Illustrative Only)

The following figures are illustrative only and assume a long-term federal holding treated under the collectibles rules. Your actual tax liability depends on your total income, filing status, deductions and other factors. Consult a licensed tax professional before making decisions based on this example.

Short-term gains (held one year or less) cost more. The federal collectibles cap does not apply to short-term holdings; the full gain is taxed at your ordinary federal rate and at the Colorado flat 4.4 percent. For a current estimate of what your physical holdings are worth per weight and purity before you start modeling tax, use the Goldiew gold value calculator.

Colorado Dealer Rules: C.R.S. 18-16-101 Through 18-16-106

Colorado regulates buyers of used precious metals through a dedicated chapter of the Criminal Code titled “Purchasers of Valuable Articles,” codified at C.R.S. 18-16-101 through 18-16-106. The chapter applies statewide and sits on top of any additional municipal licensing in Denver, Colorado Springs and other home-rule cities. If you are a private individual selling your own gold, these rules fall on the dealer, not on you. Knowing what a compliant Colorado buyer is required to do helps you tell a legitimate operation from an informal or unlicensed buyer.

Identification and Record-Keeping

Under C.R.S. 18-16-103, a purchaser cannot buy any valuable article (gold and silver bullion are expressly listed in 18-16-102) without first securing adequate identification from the seller. The statute enumerates acceptable identification types, which include a current driver’s license, a Colorado identification card, a U.S. passport and other government-issued photo IDs. Under C.R.S. 18-16-105, the dealer maintains a register logging the seller’s identifying information, the transaction date, a description of each item purchased, its weight and purity, and the price paid, plus a written declaration of ownership from the seller. Records must be kept for at least three years and made available to any peace officer on request.

Thirty-Day Holding Period (With a Bullion Exception)

C.R.S. 18-16-106 imposes a 30-day holding period before a purchased valuable article can be melted, altered or resold, so law enforcement has time to match items against stolen-property reports. The statute carves out an important exception for bullion sellers: stamped and assayed gold and silver bullion, and gold coins, are exempt from the holding requirement, provided the dealer still records the transaction. In practice, a Colorado dealer buying a one-ounce American Gold Eagle or a stamped and assayed one-kilo gold bar can resell it the next business day, while the same dealer buying a 14-karat gold bracelet must hold the piece for the full 30 days. For sellers of eligible bullion, this exception usually means payment at the counter rather than payment delayed until the hold expires.

Denver and Other Home-Rule City Licensing

Several Colorado cities add a second layer. Denver requires most businesses that buy used personal property, including precious metal jewelry and coins, to hold a Secondhand Dealer license issued by the Department of Excise and Licenses, and to report purchases to the Denver Police Department through LeadsOnline. Denver business licensing is published at denvergov.org Business Licensing. Comparable licensing and reporting ordinances exist in Colorado Springs, Aurora, Boulder, Fort Collins and other larger Colorado cities, each administered by the city clerk or licensing department. Confirm the specific requirement with the city before a time-sensitive sale.

What a Compliant Dealer Captures at the Counter

Across state and local rules, a legitimate Colorado buyer logs the transaction date and ticket number, a description of each item (metal type, weight, purity markings, hallmarks), the price paid, the seller’s full name, home address and date of birth, and a copy of a valid government-issued photo ID. These records are available to law enforcement under C.R.S. 18-16-105 and the applicable city ordinance. A buyer who refuses to perform these basic steps is a red flag, not a convenience.

Step by Step: How to Prepare Before Selling Gold in Colorado

A short preparation window before you walk into a dealer in Denver, Colorado Springs, Aurora, Fort Collins, Boulder, Lakewood, Pueblo, Grand Junction or any Colorado community measurably improves what you take home.

1. Gather Your Cost Basis Documentation

Pull together original purchase invoices, dealer receipts, shipping and insurance records, and any assay certificates. The stronger your documentation, the lower your federal taxable gain and the lower the amount Colorado taxes at the 4.4 percent flat rate. If you inherited the metal, document its fair market value at the time of inheritance, which typically serves as your stepped-up basis under federal rules; Colorado follows the federal basis.

2. Verify the Spot Price Internally First

Before approaching any Colorado buyer, know the day’s spot price for gold, silver, platinum or palladium. The simplest way is to use the Goldiew gold value calculator, which pulls a live spot price so you can estimate what your holdings are worth per weight and purity. The spot price lets you judge whether a dealer’s offer reflects current market conditions or an unusually wide discount, before you commit to the counter.

3. Weigh and Test Your Items at Home First

A basic jewelry scale that reads in grams and troy ounces confirms weight. Purity markings (10K, 14K, 18K on jewelry; 0.999 or 0.9999 on bullion) indicate fineness. For items without clear markings, a reputable dealer offers an on-site acid test or XRF (X-ray fluorescence) scan. Watch the test being performed; a dealer who refuses to let you observe is a red flag.

4. Get Multiple Offers

Dealer spreads vary widely in Colorado, from a Denver shop with regional competition to a mountain-town buyer with no nearby alternative. Two or three competing offers typically improve what you receive, especially on larger holdings. The simplest way to do this at scale is to post one free request on Goldiew’s Sell Gold platform, which routes to up to 15 verified buyers in sealed-offer form. See also why getting multiple offers matters.

5. Confirm the Payment Timeline

Ask upfront when and how you will receive payment, and whether timing is affected by the 30-day holding period under C.R.S. 18-16-106. For stamped and assayed gold and silver bullion and for gold coins, the state holding period does not apply, so eligible sellers typically receive payment at the counter. For jewelry and non-bullion items, part of the payment may be deferred until the hold expires. In Denver and other home-rule cities with LeadsOnline reporting, the dealer completes the municipal reporting step the same day.

What a Legitimate Colorado Buyer Looks Like (and Red Flags)

A legitimate Colorado precious metal buyer typically shares the following traits:

• A general business license from the city or county where they operate, plus any applicable secondhand dealer license in Denver and other home-rule cities
• A permanent business location with regular hours, not a hotel-room pop-up or cash-only roadshow
• A clear written offer tied to the current spot price and a transparent assay methodology
• Willingness to let you observe weighing and purity testing
• A written receipt itemizing each piece purchased and the price paid
• Record-keeping and identification checks consistent with C.R.S. 18-16-103 and 18-16-105
• Compliance with the local reporting requirement where it applies (LeadsOnline for Denver and others)
• Verifiable community reviews on at least one independent platform

Red flags that warrant walking away include pressure to decide on the spot, refusal to provide a written offer in advance, refusal to show licensing where it applies, dramatically below-spot cash offers framed as limited-time deals, and buyers operating out of temporary venues. The FINRA alert at finra.org covers the broader pattern. For local verified options, start with the Colorado gold dealer directory, Colorado coin dealer directory or Colorado pawn shop directory.

Special Situation: Gold Held in a Self-Directed IRA

If your gold is held inside a properly structured self-directed IRA rather than owned directly, the tax analysis is different. Selling gold inside the IRA is not a taxable event at the point of sale; taxes apply when you take distributions. Traditional IRA distributions are typically taxed as ordinary federal income and ordinary Colorado income on the state side at the flat 4.4 percent rate; qualified Roth IRA distributions are federally tax-free, and Colorado conforms to the federal treatment of qualified Roth distributions.

The federal collectibles cap and the state flat rate do not apply directly to IRA distributions, because the distribution itself is treated as ordinary income rather than as a capital gain. For federal distribution rules, see IRS Publication 590-B; for prohibited transactions in retirement accounts, see IRS retirement topics.