Basin Coop customers could pay slightly higher prices on some items after the business enters city limits in March.
Durango City Council approved the annexation of the co-op and the Ampride gas station earlier this week without discussion.
Annexation of the 25.9 acres was required because the co-op built a storage building in 2008. The co-op was not interested in annexing at the time and negotiated a delay, according to city documents.
The annexation will take effect March 7. Sales tax collections generally begin as soon as a business enters city limits, said City Attorney Dirk Nelson.
The sales tax will not apply to some agricultural items, such as fuel, fertilizer and feed, Basin Coop CEO and President Lynn Forssberg said.
But sales tax will be owed on vehicles, equipment and smaller items, such as clothing.
The co-op does not have to upgrade its property to meet city standards immediately as a result of annexation.
If the co-op does minor redevelopment, the city will either require landscaping near upgraded buildings or along the frontage road.
If major redevelopment happens at the co-op, the city would customize the parking and landscaping standards the co-op would have to meet, according to city documents.