Colo. Code Regs. 39-26-102(5)
"Gross taxable sales" means the gross sales of a person during any given reporting period,
See Rule 39-26-111 for credit sales.
Adjustments in a sales price, such as allowable discounts, rebates and credits, cannot be anticipated; i.e., the tax must be based upon the original price unless the adjustments actually have been made prior to the filing of the return wherein such sale is reported. However, if the price upon which the tax was computed and paid to the state by the vendor is subsequently adjusted prior to payment of the tax by the purchaser, a proper credit may be taken by the vendor against the tax due on the next return.
No credit for discount will be allowed to a vendor unless the related decrease in sales tax actually is passed on to the purchaser.
A cash discount allowed for payment on or before a given date is not an allowable adjustment to the selling price in determining taxable sales.
If any vendor makes overpayment of the tax or is entitled to a credit on his tax payments because of mistake, errors or canceled sales, credit for the amount of overpayment may be taken by the vendor on a subsequent return; but if the vendor is no longer engaged in business, he should apply for a refund. (See Rule 39-26-703 -2.)
If any sold article is returned to the vendor for adjustment, replacement, or exchange under a guarantee as to quality or service, and if another article is substituted pursuant to the guarantee free or at a reduced price, the tax shall be recomputed on the actual amount paid to the vendor for the substituted article, taking into consideration any other adjustments made at the time of the replacement.
39-26-102(5)