City of Northglenn Initial Use Tax 
                                        
When a new business comes into being in Northglenn, it becomes subject to Initial Use 
Tax. What is this? Well, first we have to figure out… 
 
WHEN DOES A NEW BUSINESS COME INTO BEING? 
 
 1. Someone starts a business from scratch 
 2. Someone purchases an existing business 
 3. An existing business changes ownership (which isn’t necessarily the same as 
    someone purchasing a business) 
 4. An existing business moves into Northglenn 
 
So now, we can look at………………….WHAT IS INITIAL USE TAX? 
 
All the Assets, Equipment, and Supplies purchased by a new business are subject to 
Initial Use Tax.  
 
If a business starts from scratch, this will mean virtually everything needed to start the 
business. Computers, office furniture, shelves, adding machines, telephones, paper 
supplies… you name it- if it is bought for the business and not intended for re-sale, it is 
subject to Initial Use Tax. 
 
If a business changes ownership, then the new owner is required to establish the fair 
market value of all tangible personal property (except inventory for resale) that goes with 
the business. The total fair market value is subject to Initial Use Tax. 
 
Initial Use Tax for a new business is pretty easy to deal with. The business owner or 
accountant should gather together all the purchase invoices and determine for each 
invoice: 
 
 1. Tax rate paid on invoice. If Northglenn tax was collected, the total tax rate should 
    be 8.75%. If the rate is anything other than 8.75%, it most likely does not include 
    City of Northglenn tax. The 8.75% is broken down as follows: State of Colorado 
    sales tax rate is 4.00%, Adams County is 0.75%, and City of Northglenn is 4.00%. 
 2. Was any City sales tax paid? If no, the entire amount is subject to tax. If yes… 
         a. Was the City tax Northglenn’s tax? If yes, nothing further is due. If no… 
         b. Was the other City’s tax properly assessed? If no, then the entire amount is 
            due to Northglenn. If yes… 
         c. Was the other City’s tax less than 4%? If yes, Initial Use Tax equal to the 
            difference between the tax paid and Northglenn’s tax rate is due. If other 
            City’s tax was greater than 4%, no additional tax is due. 
 

                 City of Northglenn Initial Use Tax 
                  
Initial Use Tax for a business that changes ownership can be REALLY easy, or really 
difficult and complex. If the new owner is able to determine the fair market value on all 
the assets and tangible personal property, they just take 4% and remit that amount. If they 
can’t or won’t, then it becomes a job for the tax auditor.  
 
Also, PLEASE NOTE – Initial Use Tax on a business that changes ownership is due 
WITHOUT REGARD TO any prior sales or use tax that might have been paid. The 
transfer of a business is a separate transaction, and so is fully taxable. 
   
WHEN IS INITIAL USE TAX DUE AND WHAT IS THE FILING FREQUENCY? 
 
Initial Use Tax is a one-time filing based on the initial purchases for the business and is 
due within 60 days from the date the business opens. 
 
Keep in mind, however, Use Tax must be reported and paid on all operating purchases 
for the life of the business. Ongoing Use Tax should be reported on the monthly, 
quarterly, or annual Sales and Use Tax Return Form that the business files on a regular 
basis. 
 
Be sure to keep all receipts and records for the business for a minimum of three years. All 
records are subject to inspection and an audit by the City of Northglenn can occur within 
three calendar years after the date the tax was or is payable.  
   
STILL NEED HELP? 
 
You can also check out our website at www.northglenn.org/taxes. Here, you will find our 
complete Sales and Use Tax Code, as well as insightful information and forms to help 
you get started.