DOR Taxation web site

Exemptions

Number Title and Description
 GIL 07-009 Energy Company Leases
               Discussion of nexus of out-of-state company that leases property located in Colorado and whether property is exempt from tax.
 GIL 07-011 Drop Shipments, Wholesale Sale Documentation
  Out-of-state supplier not liable for sales or use tax for property delivered to in-state consumer.  Out-of-state retailer may use another state's sales tax license to document wholesale sale exemption.
 GIL 07-015 Wheelchairs, Scooters
  Wheelchairs are exempt, but scooters and related accessories are taxable.
 GIL 07-022 Carbon Dioxide / Tanks
  Sale of carbon dioxide by supplier to retailer for soda fountain drinks is exempt.  Lease of tanks for shipping carbon dioxide by supplier to retailer may be exempt.  Important - This GIL has been superseded by PLR-10-001.
 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 07-025 Medical Equipment Exemption
  External fixators and wires are exempt medical equipment.
 GIL 07-028 Exempt Sales / Requirements for Documentation
  Retailer must ask to view the sales tax license, determine that license is active, and that buyer's statement that the purchase is for resale is reasonably consistent with the buyer's business.
 GIL 07-032 Drug Test Kits
  Kits qualified for exempt medical supply.  Distributor may not have nexus.  Consumer must pay use tax.
 GIL 07-034 Cholesterol and Blood Test Kits
  Cholesterol and blood testing kits are not taxable.
 GIL 08-003 Exempt Wholesale Sales, Retailer's Due Diligence
  Supplier, who knows that some purchases by retailer are not for resale, must take reasonable steps to ensure sales are wholesale sales.
 GIL 08-004 Scooters, Boot Walkers, Heel Pads
  Sales of scooters, boot walkers and heel pads are not exempt therapeutic devices.

GIL-08-006 amended

Cosmetic Medical Equipment / Therapeutic Devices

 GIL-08-006 Collagen gel used for cosmetic purposes is exempt if furnished by a doctor as part of professional services to a patient, but not exempt as a therapeutic or prosthetic device.
 GIL 08-013 Mattresses / Pillows as Therapeutic Devices
  Mattresses and pillows that are not specifically designed for therapeutic purposes are taxable even though they may be used for therapeutic purposes.
 GIL 08-014 Surgical Equipment
  Discussion of exempt surgical equipment.
 GIL-08-026 Medical Implants
  Discussion of screws and plates used for bone fractures as medical supplies exemption and exempt sales to charitable organizations and to government entities.
 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-08-032 Medical Items
  Discussion of exemption for flu vaccine, urine test, and other medically-related items.
 GIL-08-035 Hospital Beds, Wheelchairs
  General discussion of exemption for sale of hospital beds and wheelchairs.
 GIL-08-036 Surgical Stapler and Forceps
  Medical supplies exempt from sales and use tax if they leave with the patient but subject to tax if they are used and consumed by the physician.  General nexus discussion.
 GIL-09-007 Room Rental to Church Members on Ski Vacations
                     Sales tax exemption for church does not apply to lodging by church members if primary activity was a ski vacation.
 GIL-09-008 Sales Nexus Created by Related Service Activity in State / Income Tax Nexus
  Non-taxable services may create nexus for sales tax collection for one to two sales per year by nonresident single member LLC.  Income generated from sources within Colorado subject to Colorado income tax.
GIL 09-009 Enteral Feeding Pump
  Feeding pump is not exempt product.
GIL-09-013 Medical Supplies
  General discussion of exemptions for medical supplies furnished by a doctor or sold to a charitable entity
GIL-09-017 Sales of Propane and Firewood
  Sale of propane and firewood for residential purposes is exempt.  Retailer must provide reasonable documentation to establish sales are exempt.
GIL-09-022 Medical Supplies
  General discussion of exemptions for custom disposable instruments for patients undergoing joint replacement surgery.
PLR-10-001 Carbon Dioxide / Nitrogen for Beverages / Rental Charges for Gas Cylinders and Tanks.
  Sale of carbon dioxide for beverage is exempt from tax, but sale of nitrogen as a propellant of beverage is taxable. Rental charges for gas cylinders and tanks used by retailer are not exempt as shipping containers.  
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 the sale of taxable good.
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 an 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.
PLR-10-006 Use Tax Inapplicable to Buyer's Acceptance Testing
  Acceptance testing by buyer under Colorado's Uniform Commercial Code is part of sales transaction and not a separate taxable use. 
GIL-11-005 Insulin Infusion Pumps 
  An infusion pump and related disposable supplies are exempt as an "insulin measuring and injecting device" because the pump measures an insulin dosage and injects the insulin.  
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 local jurisdictions that have elected to levy sales and use taxes on food, unless the product is purchased with SNAP or WIC benefits.
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 an on-site monitoring system which is subject to sales and use taxes.
 GIL-11-010

Liquor-Filled Candy

  Liquor-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-11-014

Electronically Delivered Newspapers and Magazines

 

Monthly newspapers and magazines delivered electronically are subject to sales tax.

 PLR-12-001 (amended) Drug-Device Combination Products
 PLR-12-001 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 purchased by hospitals, clinics or surgery centers. Product does not qualify for the durable medical equipment exemption and may not qualify for the prosthetic device exemption.
 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.

 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.
 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.
 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.
 PLR-13-002 Invoice Component Fees
  Fees charged by a company in the business of retrieving and copying medical records of health providers for use by insurance companies, lawyers, and other third-parties are not subject to sales and use tax.
 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.
 PLR-13-003 Computer Software and Computer Software Maintenance Contracts
  Software that is prepackaged, has a nonnegotiable license agreement, and is delivered on a tangible medium is taxable.  Nonnegotiable software license agreements presented to the buyer on-line qualify as a tear-open, nonnegotiable license. Optional maintenance agreements are generally viewed as a service and are not subject to sales and use tax.
 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.
 PLR-13-006 Hardware, Software and Services
  The hardware and software purchased by Company is consumed by Company in the provisioning of services to clients and is not rented to clients. Company, who provides routing of intrastate telephone calls and other communications, is providing intrastate telecommunication services in Colorado.
 GIL-13-007 Maintenance Agreements
  Company's client pays an IT services company to install free Microsoft patches and software upgrades, which are taxable standardized software, indicates that the true object is the sale of a nontaxable service rather than the sale of tangible personal property.
 PLR-13-007 Third Party Administrator of Insurance Claim Obligations
  Company’s purchases from suppliers are exempt wholesale purchases when Company resells the goods to the insurance companies. Therefore, Company must collect the applicable sales taxes from insurance companies.
 GIL-13-011 Plumber's Fees
  The method a plumber uses to invoice customers determines how sales and use tax is collected.
GIL-13-012 Sutures and IV Catheters
  Sutures qualify for an exemption but IV catheters do not.
 GIL-13-013 Meal Included in 501(c)(3) Organization’s $25,000 Proceeds Limit
  The net price of the dinner charged by a charitable entity for a fundraising event is included in the gross proceeds calculation of the $25,000 net proceeds exemption.  
 GIL-13-015 Fees and Charges Applied to Utility Bills
  The taxability of charges for connecion, disconnection, late-payment and other items are discussed.
 GIL-13-017 Seeds and Plants, Food and Dietary Supplements, Medical Supplies, Test Kits, and a Coupon Book
  Exemptions listed under §39-26-716, C.R.S. apply to commercial agriculture and livestock operations.  Seeds and orchard trees that are not used for a commercial agricultural purpose are not exempt. Colorado excludes dietary supplements from the definition of food. See ruling for discussion of medical supplies, test kits and coupon books.
GIL-13-018 Entry Towers
  If entry towers are fixtures, their taxability will depend upon the type of contract Company uses with the owner. Contractors who charge the owner a lump sum amount do not collect sales tax from the owner, and, instead, pays sales tax when they acquire the building materials from the supplier or manufacturer.  If a contractor uses a “time-and-material” contract with the owner, then the contractor must collect sales tax from the owner on the marked-up price of the entry tower, but not on the labor charges.
 GIL-13-019 Sale of Domestic Jet Fuel for Commercial International Flights
  Colorado exempts from its fuel excise tax specially blended kerosene and other fuel products if they are exempt from federal aviation fuel taxes and used in aircraft operated by scheduled air carriers or commuter airline operators.
 GIL-13-022 Material Safety Data Sheet
  Reports and completed applications for governmental regulatory compliance activities are generally treated as a service. However, access to data, without any significant analysis of the data by Company, would generally be treated as a taxable digital product.
 GIL-13-023 Lease of Medical Equipment
  A lessor of a “true lease” must pay sales taxes when it acquires the property if the lease term is three years or less, unless the lessor obtains prior permission from the Department to collect sales or use tax on lease payments. If the lessor uses a leases that is more than three years in duration or if the lease is a finance lease (regardless of whether it is more or less than thirty month duration), then lessor must collect sales or use tax on the lease payments, including the final “purchase” payment, and lessor does not have the option to pay sales or use tax when it first acquires the property.
 GIL-13-028 Bagged and Packaged Salads
  Bagged salads that do not include salad dressing or utensils qualify as food for home consumption. Bagged salads that contain all the ingredients of a prepared salad, including the salad dressing, and packaged salads in the shape of a bowl that contain a variety of lettuce, vegetables, salad dressing, a utensil, and may include meat, are “prepared salads” subject to tax.
 GIL-14-001 Promotional Videos
  The production of a video is a non-taxable sale of services, even though some property is transferred from seller to buyer.  If charges for the raw footage and project file reflect the value of the services to produce the raw video and not the value of the property, the raw footage and project files will also be considered a non-taxable service.  As a result, Company must pay sales or use tax on the items it uses to perform its service.
 GIL-14-002 Modular Homes
  The tax liability will depend upon the type of contract the builder uses with the homeowner.
 PLR-14-002 Foot Orthotics, Braces, Splints, and Implant Kits
  Most foot orthotics, braces, and splints are exempt only if furnished to the patient by a licensed provider as part of the provider's professional service. A joint implant and pins, which are purchased together with a drill bit as a "kit", are exempt from tax, but the drill bit included in the kit is subject to tax.
 GIL-14-003 Domestic Jet Fuel Used in International Flights
  Colorado sales tax applies to aviation fuel sold in Colorado to commercial airlines even if the fuel is used for international flights.
 PLR-14-003 Aggregate Mining, Asphalt and Recycled Asphalt Production
  Asphalt production inside and outside an enterprise zone is manufacturing, unless fifty percent or more of the new asphalt is comprised of recycled asphalt. If new asphalt is comprised of fifty percent or more of recycled asphalt, then production of such asphalt is not manufacturing, regardless of whether it is inside or outside an enterprise zone. Aggregate mining and recycled asphalt production is manufacturing when performed in an enterprise zone, but is not manufacturing when performed outside an enterprise zone. Use tax does not apply on aggregate materials mined from manufacturer’s own gravel pit. Lease payments related to mining may constitute the taxable sale of tangible personal property.
 GIL-14-004 Sales Taxability of Federal Excise Tax on Jet Fuel Sales
  Sales tax is calculated on the price charged to the customer.  However, if the purchaser is levied a direct federal tax, the sales tax calculation excludes the direct federal tax. A direct federal tax is a tax levied by the United States on the taxpayer, which, in the case of sales tax, is the purchaser.
 GIL-14-006 Alternating Current Electricity
  “Renewable energy” does not include burning natural gas and equipment used to capture thermal heat from the combustion of natural gas and does not qualify for the sales tax exemption for components used in the production of alternating current electricity from a renewable energy source.
 GIL-14-007 Intrauterine Devices
  An IUD that releases hormones is considered a drug and is exempt if dispensed pursuant to a prescription by a licensed provider. An IUD, whether furnished to a patient pursuant to a prescription or not, will likely qualify for the exemption for materials furnished by a licensed provider as part of their professional services because only a licensed provider can insert an IUD and the patient leaves the licensed provider’s office with the IUD.
 GIL-14-009 Demand Charge
  A demand charge for the sale of electricity is taxable unless used for residential or industrial purposes.
 GIL-14-012 Infusion Pumps
  An infusion pump that administers medications through infusion is exempt from Colorado sales and use tax if prescribed by a licensed provider.