Department of Revenue - Taxation:Property / Services Taxable

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Property / Services Taxable

Number	Title and Description
GIL-07-002	Energy Drinks
	Discussion of energy drinks as exempt food or taxable food supplement. Drinks that do not qualify as food under the federal food stamp program are not exempt food.
GIL-07-003	Crime Remediation Services
	Contract is for non-taxable services.
GIL 07-004	Dark and Lit Fiber / Fixtures
	Discussion whether dark and lit fiber optic cable used for telecommunication qualifies as taxable telecommunications service and whether cable is a fixture or tangible personal property.
GIL 07-006	Gift Card Stock and Bundled Software
	A sale by a distributor of card stock is not an exempt wholesale because distributor is the consumer, not reseller, of card stock. Software bundled with card stock may be taxable if not separable from sale of card stock.
GIL 07-010	Animal Management Software and Property
	Discussion of taxability of products and services offered by retailer for animal management business.
GIL 07-013	Portable Trailers, Water / Electrical / Sewer Satellite Systems, Transportation Charges, Repair Parts
	Discussion of taxability of various portable products supplied for drilling sites, including satellite, sewer, water, electrical systems, repair services and repair parts.
GIL 07-014	Meal Discounts
	Discussion of sales tax reporting requirements of two retailers which jointly offered discount food and entertainment program.
GIL 07-016	Consulting and Project Management Services, Credits for Taxes Paid Another State
	Consulting and project management services not taxable if separable from sale of surveillance products. Retailer cannot claim credit for taxes incorrectly paid another state.
GIL 07-017	Call Center Services
	Call center services are non-taxable services.
GIL 07-018	Employment Recruitment Services
	Employment recruitment services are non-taxable services.
GIL 07-019	Warranty Contracts for Leased Goods
	Contracts for service and maintenance of leased goods are not taxable if such contracts are in a separate contract from lease.
GIL 07-020	Installation / Transportation
	Discussion of various aspects of retailer's sale and installation of product and transportation charges.
GIL 07-024	Electricity / Research and Development
	Discussion of availability of exemptions for use of electricity, research and development, and statute of limitation for sales tax.
GIL 07-027	Consumer Surveys and Service Quality Reports
	Discussion of criteria for determining whether consumer surveys and service quality reports are non-taxable services or sales of property discussed.
GIL 08-001	Custom Software, Installation, Repair, Transportation, Training
	Custom software, installation, repair, transportation, and training are generally non-taxable services.
GIL 08-002	Hosting and Networking Services
	Charges by an out-of-state company for webhosting and network connectivity charge where servers are not located in Colorado are not taxable.
PLR-08-002	Sales Tax on Discounted Taxable and Nontaxable Bundled Goods and Services
	Sales tax calculated on retailer's costs when taxable item sold at below costs and bundled with non-taxable service.
GIL 08-005	Merchandising Services
	Retailer provided service of merchandising is not taxable.
GIL 08-007	For-Profit Daycare Providing Food, Plates, Utensils
	Daycare is providing a service and is the consumer of the food products and related accessories.
GIL 08-008	DVD Production
	Labor cost of third-party must be included in retailer's purchase price even if separately stated on the customer's invoice.
GIL 08-009	Contractors / Fixtures
	Discussion of factors considered in determining when tangible personal property becomes a non-taxable fixture to real property. Department will consider, among other things, how taxpayer treated the property on federal income tax return. Discussion of lump sum and time and material construction contracts.
GIL 08-010	Home Study / School Material
	Business that offered home study program and sold books and supplies is not selling a service. Therefore, sale of books and other goods to customer is taxable.
GIL 08-011	Hostess Credits / Transportation
	Credits and discounts distinguished. Credits given by direct marketer to hostess for holding a sales event at hostess' home are not allowed for purposes for calculating sales tax. Transportation charges are taxable because customers did not have any alterative but to use retailer's transportation services.
GIL 08-012	Propane Tanks (Refilled or Empty) / Prepaid Phone Cards
	Propane is exempt if sold for residential use. Retailer must take reasonable steps to ensure exempt sales. Discussion of taxability of customer supplied tanks and retailer supplied tanks. Distributor of prepaid phone cards is consumer of card stock and is not entitled to resale exemption. Retailer of the taxable goods or service purchased with card is responsible for collecting tax, not the card distributor.
GIL 08-016	Software Updates, Upgrades
	Upgrades of taxable software are taxable. Software to correct bugs in original taxable software is not taxable.
GIL 08-018	Food Supplements, Soap, Deodorant, Products
	Supplements and other products are taxable.
GIL 08-019	Print Material
	Discussion of taxability of print material and collection of local sales taxes.
GIL 08-020	Restocking Fees, Travel, Training, Rental of Equipment
	A retailer who charges a restocking fee has not refunded the full purchase price and is not entitled to a refund of any tax. Travel and training are not taxable. Rental of property is taxable.
GIL 08-021	Supplements, TENS, Pads
	Dietary supplements are taxable. TENS are exempt therapeutic device.
GIL 08-023	Purchase Options on Leases, Insurance, Late Payment, Documentation Fees
	Purchase option at expiration of lease is taxable unless finance lease previously factored to a third-party. Insurance is taxable if not separable from lease. Late payment and documentation fee are inseparable and included in purchase price for sales tax calculation.
GIL-08-024	Alteration Services
	Alteration services are not taxable if separable from sale of clothing.
GIL-08-025	Patient Tracking / Incentive System
	System for tracking patients and incentive program is a non-taxable service
GIL-08-027	Signage, Crating, Installation, Transportation, City Permits, Subcontractors
	Sale of signage is taxable unless it becomes a fixture to real property or title passes prior to installation. Manufacturer's purchase of crating is exempt wholesale sale, but taxable sale to consumer. Installation is an exempt service. Transportation is generally exempt except for freight-in charges or if inseparable from sale of signs. City permits are not taxable if obligation of owner. Repair work of subcontractor is discussed.
GIL-08-030	Use Tax on Fabrication Services
	Use tax does not include labor costs of Taxpayer or third-party fabricators who only provide services, but includes fabrication services of third-parties who also sell raw materials, even though the sale of such goods is in a separate contract.
GIL-08-031	Copying Service
	Company that provides copies of hospital medical records to third-parties is selling taxable goods.
GIL-08-033	Condominium Furnishings
	Developer who purchased and paid tax on furnishings for condominium units that it owned and later sold to fractional interest owners is liable for sales tax on such sale and may be entitled to refund of tax paid to suppliers for such furnishings. Developer liable for sales tax when it rents on a nightly basis condominiums to third-parties.
GIL-08-034	Internet Games / Energy drinks / Samples
	Internet gaming lessons are nontaxable services and nontaxable intangible personal property. Income earned from sources within Colorado are subject to income tax, but nexus issue not addressed. Energy drinks are generally nonexempt food supplements. Distribution of samples is not subject to sales tax, but distributor liable for use tax.
GIL-09-001	Taxability of Service Charge / Nexus of Call Center Employing Independent Contractors to Perform Work for Clients in State
	Income derived from Colorado sources is taxable. Taxability of mark-up charged by in cases of resellers, agents, brokers, third party contracts. General discussion of nexus for income and sales tax purposes.
GIL-09-002	Sales of Building Materials Between Controlled Companies
	General discussion of application of sales and use tax for contractor and manufacturer who are controlled companies.
GIL-09-003	Taxability of FCC License and Coordination Charge RE: Two-Way Radio
	General discussion of taxability of FCC license and coordination charge made in connection with sale of two-way radio.
GIL-09-004	Gift Baskets
	Sales tax on gift baskets containing taxable and non-taxable items whose prices are not separately stated is computed on the full purchase price unless the value of the taxable item is de minimis.
PLR-09-004	Optional Service Offered with Taxable Rental of Motor Vehicles are Not Taxable
	Optional services offered in connection with, but separable from, the rental of a motor vehicle are not taxable if such services are separately stated on the invoice.
GIL-09-005	Lessor / Seller of Motor Vehicle Must Collect and Remit Sales Tax on Sale of Motor Vehicle
	Lessor who sells motor vehicle to lessee at the expiration of a motor vehicle lease must collect and remit sales tax.
GIL-09-006	Gas Meter Reading Fee
	Fee charged by propane distributor is taxable if the service is not separable from sale of taxable sales of propane.
GIL-09-011	Preparation of Sales Tax Return and Exemption Certificates
	Internet service that prepares sales tax exemption certificates and sales tax returns is a non-taxable service.
GIL-09-014	Taxability of Service Charge of Call Center Employing Independent Contractors to Perform Work for Clients in State
	Taxability of mark-up charged by in cases of resellers, agents, brokers, third party contracts. .
GIL-09-018	Print and Mail Services / Data Transfer / Address Confirmation / Electronic Data Search.
	General discussion of applicability of sales tax to company providing printing services.
GIL-09-019	Display Items
	Retailer may be liable for use tax for items pulled from inventory.
GIL-09-020	Nominal Purchase Price Taxable
	Nominal price paid by lessee to purchase vehicle at expiration of finance lease is subject to sales or use tax.
GIL-09-021	Pet Recovery Products and Services
	Sales tax due on bundled sales of taxable products and non-taxable services.
GIL-09-024	Modular Home
	Modular home retailer liable for sales or use tax in Colorado
GIL-09-025	Downloaded Data
	Documents downloaded by customers from the Internet subject to sales or use tax
GIL-09-026	Agent's Responsibility for Tax Returns and Remittance / Income Tax for Industrial Banks
	Sales tax license and registration must be under taxpayer's name, not agent of taxpayer who invoices and collects tax from lessees. Sale of finance lease accelerates sales tax obligation. General discussion of income tax regarding industrial banks.
GIL-09-027	Maintenance and Service Agreements
	Sales tax applies to maintenance and service agreements sold in connection with sale of taxable goods, unless agreement is in a separate contract or retailer obtains permission to exempt a percentage of sales price. No exemption if customer has no option but to purchase maintenance/service agreement as part of purchase of taxable goods.
GIL-09-029	Oilfield Fishing Equipment
	Taxability of oilfield fishing equipment will depend on whether the true object of the transaction is a service or the rental of taxable tangible personal property. The department will consider a number of factors, including whether customer charged a lump sum, whether customer must use taxpayer's equipment operator, and whether customer has obligations typical of a lessee.
GIL-09-030	VoIP
	Intrastate Voice over Internet Protocol is a taxable telecommunication service.
PLR-10-001	Carbon Dioxide / Tanks
	Supplier's sale of carbon dioxide to retailer for carbonation of beverages is exempt from sales tax, but sale of nitrogen is not exempt. Charges for tank retail and storage tanks do not qualify as exempt under container exemption.
PLR-10-002	Transportation Services
	Charges for transportation services are presumed exempt, but are taxable if purchaser must use the service, seller does not separately state the charge for services, or the service is inseparable from sale of taxable goods.
PLR-10-003	Patient Meals
	Medical facility is the consumer of patient meals and must pay sales tax on the charges it pays to the food service company, including charges for overhead and management fees.
PLR-10-004	Medical Device / Service v. Sale of TPP
	Sale of catheter is not an exempt therapeutic device because it is not sold pursuant to a written recommendation. A healthcare provider is a provider of a service and cannot claim a resale exemption for the catheter by itemizing it on the patient's invoice.
PLR-10-005	Conversion of Association into Corporation
	Conversion of a church organized as an unincorporated association into a corporate sole does not create a sale or use tax obligation because the corporation is an exempt entity. Declined to address whether conversion constitutes a sale or is supported by consideration.
GIL-10-001	Daily Rental Fee
	Daily rental fee applies only to retailers who typically lease motor vehicles for less than 30 days, regardless of whether the vehicle was leased for more than 30 days.
GIL-11-001	Lay-a-way and Partial Payment Plans
	Sales tax is not due on installment payments made on lay-a-way and partial payment plans until final payment is made.
PLR-11-001	Direct Marketing Advertising Material
	Out-of-state direct marketing company is subject to consumer's use tax for material mailed to Colorado recipients.
GIL-11-002	Sales Tax on Personal Property
	Charge for reimbursement for personal property tax incurred by lessor and separately stated on lease invoice is included in calculation of sales tax owed by leassee.
GIL-11-003	Auctioneer Administrative Fees
	Auctioneer fees that are not optional and viewed as inseparable from the sales transaction are included in the sales tax calculation.
GIL-11-004	Auctioneer's Obligation of Sales Tax Collection on Motor Vehicles
	An auctioneer who sells a motor vehicle on behalf of an owner is, unless an exception applies, a retailer and must collect and remit sales tax administered by the department.
GIL-11-005	Insulin Infusion Pumps
	An infusion pump and related disposable supplies are exempt as an "insulin measuring and injection device" because the pump measures an insulin dosage and injects the insulin.
GIL-11-006	Manufacturer's Coupons
	A retailer is reimbursed by the manufacturer for the amount of the reduction in purchase price; thus, sales tax applies to the full selling price before the deduction for the manufacturer's coupon.
GIL-11-007	Freight-in Transportation Charges
	Transportation charges incurred from transporting tangible personal property from the place of production or manufacturer to the seller or to the seller's agent or representative are deemed "freight-in" charges and are subject to tax.
PLR-11-007	Software Application or Service
	Users true object is the use of the service provided rather than the lease of computer servers or software.
GIL-11-008	Bi-weekly Newspapers / Printers
	A newspaper distributed every two weeks does not qualify as a "newspaper" that is exempt from Colorado sales and use taxes. A printer must collect sales tax from the distributor of a non-exempt newspaper.
PLR-11-008	Food and Nutritional Products
	Products in question qualify as 'food' and, therefore, are exempt from state sales and use taxes if sold for domestic home consumption. These products are subject to local sales taxes of those jurisdictions that have elected to levy sales and use taxes on food, unless the product is purchases with SNAP or WIC benefits.
GIL-11-009	Rebates
	Programs offering consumers rebates for certain purchases are not deducted from the sales price when computing sales tax.
PLR-11-009	Photovoltaic Energy Systems
	The purchase and lease of photovoltaic energy systems by an entity other than the ultimate user is exempt from state and state-administered sales and use taxes under the Renewable Components exemption, except on an on-site monitoring system which is subject to sales and use taxes.
GIL-11-010	Liquor-Filled Candy
	Liqour-filled candy does not qualify as exempt food for state sales and use taxes and state-administered local sales tax purposes.
PLR-11-010	Partial Purchase Price Exemption
	A portion of the purchase price of a fuel used in manufacturing a tangible personal property is exempt from sales and use taxes if a portion of the fuel material is a necessary and desirable component of the manufactured product.
GIL-11-011	Services Related to Medical Devices
	Colorado does not impose sales tax on the provisioning of medical-related services.
GIL-11-013	Lease Payments
	In a 'true' lease, lessor is required to pay sales tax on a purchase from a vendor if the sale takes place in Colorado or pay Colorado use tax if the purchase from a vendor occurs outside Colorado. In a finance lease, the "lessor" must collect tax on the "lease" payments.
GIL-11-014	Electronically Delivered Newspapers and Magazines
	Monthly newspapers and magazines delivered electronically are subject to sales tax.
GIL-12-001	Prescription Reviews
	Pharmacist's review of patient's medication record is a service and not subject to sales and use tax, unless the sale of service and tangible personal property are inseparable and the "true object" of the patient is the report.
PLR-12-001	Drug-Device Combination Products
	Product, which provides a framework over which bones grow and heal, is exempt as material furnished by a licensed provider as part of the provider's professional service to the patient, even if Product is sold to hospitals, clinics or surgery centers. Product does not qualify for the durable medical equipment exemption and may not qualify for prosthetic device exemption.
GIL-12-002	Bio-Engineered Medical Device/Orthotic
	A shoe insert does not qualify for the prosthetic device exemption.
PLR-12-002	Affiliate Nexus
	Company has nexus in Colorado because it is a component member of a combined group of corporations and another component member has a business presence in Colorado. In addition, Affiliated Company is an indirect representative of Company when it acts on behalf of Company to solicit and facilitate sales and sales-related activities because, among other reasons, it accepts return on behalf of Company and participates in a loyalty points program with Affiliated Company. Therefore, Company must open a sales tax account and retailer's use tax account to report and collect local and special district taxes for sales shipped into local jurisdictions in which Affiliated Company's stores are located.
GIL-12-003	Law-a-way Service and Cancellation Fees
	A lay-a-way service is not a sale until final payment. The lay-a-way service fee is included in the sales tax calculation if the fee for the service is not optional. If the lay-a-way is canceled before title or possession is transfer to customer, then the lay-a-way service fee and cancellation fee is not subject to sales tax because there was no taxable sale.
PLR-12-003	Charges for Services
	Charges for services, as described in the ruling, are not subject to sales or use tax, regardless of whether Company provides copy/print center services. Company's charges for certain services would become subject to sales or use tax if Company does not separately state charges for tangible personal property used by Company to provide the services.
GIL-12-004	Fluoride Varnishes and Streaming Videos to Dentist's Office
	Fluoride varnishes sold to a dentist's office may qualify as material furnished to a patient as part of a licensed provider's professional service. General discussion on whether electronically delivered informational videos delivered to a business are subject to tax.
PLR-12-004	Drug-Device Combination Products
	Product, which provides for bone void filling and fracture repair of the pelvis and extremities, is exempt as material furnished by a licensed provider as part of the provider's professional service to the patient, even if Product is purchased by hospitals, clinics or surgery centers.
GIL-12-005	Internal and External Fabrication Labor Costs
	Fabrication labor costs performed by a fabricator on goods that the fabricator later converts to its own use are not included in fabricator's use tax calculation; but fabrication costs are included in the sales tax calculation if the fabricator sells its fabricated goods at retail. Charges for fabrication services performed by a third party are included in the sales tax calculation of the fabricator's retail sale of the fabricated goods to the ultimate consumer if the third party provides the fabricator with the materials and fabrication services.
PLR-12-005	Welding Gases and Tools
	Welding gases that are a fuel or energy source used in one of the enumerated industries are exempt from sales and use tax. Oxygen and inert gases used in welding are not exempt fuel gases. Hand-held torches and welding attachments, parts, and related tools are not machinery or machine tools exempt from Colorado sales and use tax.
GIL-12-006	Application Service Providers
	Computer software that is used by a consumer via an ASP is not taxable computer software because the software is not considered to be delivered to the consumer in a tangible medium.
PLR-12-006	Food and Nutritional Products
	Products qualify as 'food' and, therefore, are exempt from state sales and use taxes if sold for domestic home consumption. Products are subject to local sales taxes of local jurisdictions that elect to levy sales and use taxes on food, unless product is purchased with SNAP or WIC benefits. The tax treatment of a bundled transaction depends on the items in the bundle, the value of the items, and whether the items are separable.
GIL-12-007	Transportation Charges
	Transportation charges that are inseparable from the sale of the good are taxable. Non-optional charges by wholesaler to retailer for drop shipment transportation of goods are not 'freight-in' charges and are taxable if passed on the customer.
PLR-12-007	Subscription Fees
	A subscription fee for an online publication, which is a duplicate of Company's newspaper, is not subject to state and state-administered local sales and use taxes because it is still considered a newspaper. A subscription fee for access to stock screens, comparative performance ratings, and emerging stocks is a service and, thus, not subject to state sales or use tax.
GIL-12-008	Sales to Native American Tribal Members and Tribal Governments
	A sale of tangible personal property to a Native American tribal member is exempt from sales tax if the sale occurs on the tribal member's tribal land. However, sales to non-tribal members on tribal lands are not exempt, and sales to tribal members off the member's tribal lands are not exempt sales.
GIL-12-009	Durable Medical Equipment
	A medical device can qualify for the durable medical equipment exemption if it (a) can withstand repeated use; (b) is primarily and customarily used to serve a medical purpose; (c) is generally not useful to a person in the absence of illness or injury; and (d) is not worn in or on the body.
GIL-12-010	Tangible Personal Property Assembled in Colorado
	Colorado generally exempts from sales and use tax tangible personal property purchased by a manufacturer who integrates the property into a finished manufactured or processed product and holds the same for resale. This exemption applies regardless of whether the finished goods are sold inside or outside Colorado.
GIL-12-011	Reimbursable expenses
	In general, reimbursable expenses are not subject to sales or use tax, unless the reimbursement is more properly viewed as a resale of taxable goods. However, if goods or services for which reimbursement is sought are more fairly construed as being consumed by a company rather than by the company’s client, then the reimbursement charge to the client is not treated as a resale of the goods or services.
GIL-12-012	Non-resident Leases of Passenger Cars
	The place where the vehicle is registered will determine which state and local taxes apply. If the person leasing the vehicle is, at the time the lease is executed, a non-resident of Colorado and immediately takes the vehicle to another state for use outside of Colorado, then Company/dealer is not liable to collect any taxes on the leased vehicle.
GIL-12-013	Training Classes for Corporations
	The provision of education and training is generally a non-taxable service. If tangible personal property is transferred from the educational service provider to the student, this may change the tax obligation. Company may need to remit income tax if it has sufficient nexus to be considered to be doing business in Colorado.
GIL-12-014	Full-Service Truck Washes
	Full-service truck washes are generally viewed as a non-taxable service. However, Company must pay use tax on supplies used within the wash process.
GIL-12-015	Manufacturing Equipment Exemption for Bakeries
	Large-scale wholesale bakery would likely be treated as a as manufacturer. If Company is engaged in manufacturing, then purchases of machinery or machine tools and parts thereof are exempt from state sales and use tax when the machinery is used in manufacturing.
GIL-12-017	Products for the Blind and Legally Blind
	The optical sales and services exemption explicitly excludes Braille reading devices. Products may qualify for the durable medical equipment exemption if the Braille devices serve a “medical” purpose and are dispensed and purchased pursuant to a prescription.
GIL-12-018	Special Mobile Machinery
	When Company and lessee / purchaser are located in the same tax jurisdiction, then Company must collect sales tax for that state-administered local tax jurisdiction, but does not have an obligation to collect the local sales taxes of other local tax jurisdictions in which Company does not have a sufficient nexus.
GIL-13-003	Rental and Labor Charges
	If a retailer provides both taxable tangible personal property and non-taxable services, the taxability of the transaction is generally be determined on whether the “true object” of the transaction is the sale of a service or rental of tangible personal property.
GIL-13-004	Special District Taxes
	Sales of fuel for industrial purposes are exempt from state, state-administered cities, counties, and special districts sales taxes.
GIL-13-005	Tear Serum Testing Modules
	The exemption for “blood test” does not include a test relating to tears produced by the eye, even though the tests are similar in some respects.