Depends on the college. Some do not consider it. Others consider it as a minor factor (though most people tend to exaggerate it, because it is relatively observable and comparable against others by outsiders* compared to essays, recommendations, etc.).
*Outsiders meaning outside of the admission office of a college.
Note that these are not mutually exclusive. Someone of Spanish ancestry could be 100% European and 100% Hispanic.
Note that Hispanic/Latino ethnicity question is usually a separate question from the race question.
Mostly, the race/ethnicity question is on the honor system (though a few colleges or organizations may have specific rules, and Native Americans may be asked to show tribal documentation). If there are no specific rules, consider whether at least one of the following is true:
A. You self-identify as the particular race/ethnicity in contexts other than the box on college applications.
B. Others commonly identify you as the particular race/ethnicity, or a superficially similar one by mistake.