Sales and Use Tax Rulings | Discounts and Credits

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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-13-027   Drilling Equipment

Company’s purchases of steel, cement, pipe, and other material from suppliers are not wholesale purchases because Company alters and uses the materials to build structures. If the sale of equipment occurs outside Colorado and Company pays sales or use tax to another state and Company, thereafter, moves the machinery to Colorado for use in Colorado, then Company must pay Colorado state use tax and any state-administered local use tax applicable to the location where the machinery is registered. Company is entitled to a credit against any such Colorado state and local use taxes equal to the amount of sales or use tax paid to the other state.

GIL-11-006   Manufacturer 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-11-009   Rebates

Programs offering consumers rebates for certain purchases are not deducted from the sales price when computing sales tax.

PLR-08-002   Discounted Taxable and Nontaxable Bundled Goods and Services

Sales tax is calculated on the retailer's costs to purchase the items when the taxable item is sold at below cost and bundled with non-taxable services.

GIL-08-011   Credits for Goods for Hosting a Sales Event and Shipping Charges

Credits and discounts are distinguishable.  Credits given by a direct marketer to a hostess for holding a sales event at the hostess' home are not allowed for purposes for calculating sales tax.  The shipping charges are taxable because customers did not have any alterative but to use retailer's shipping services.

GIL-08-017   Federally Funded Coupon Program

Federal program offering consumers rebates for certain purchases is not deducted from sales price when computing sales tax.

GIL-08-022   Federally-Funded Coupon Program

Federal program offering consumers rebates for certain purchases is not deducted from sales price when computing sales tax.

GIL-07-001   Credit for Taxes Paid to Another State on Leased Vehicles

Discussion of credit for taxes paid to another state on leases of motor vehicles if the legal incidence of tax falls on lessee, not lessor, even though lessor may collect the tax. Colorado does not require other state to give similar credit as a condition to receiving Colorado credit.

GIL-07-007   Free or Discount Satellite Rental

Satellite TV provider, which offered one month free rental of satellite receiver as an inducement to customers to purchase non-taxable satellite TV service and taxable rental of satellite box, is liable for use tax for the one month of free rental.

GIL-07-014   Meal and Entertainment Package with Various Vendors

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

Consulting and project management services are not taxable if separable from sale of surveillance products.  Retailer cannot claim credit for taxes incorrectly paid another state.

GIL-07-029   Sales Tax Collection Requirement of a Multi-Level Marketing Company

Sales tax is calculated on discounted prices to consumer and representatives, not on suggested retail prices.  A multi-level marketing company is retailer.  Company is ultimately liable for unpaid sales tax.  Representatives do not need sales tax licenses.

GIL-07-033   Sales Tax Calculation on Price Adjustments

The distributor is allowed to calculate sales tax on the price that is later adjusted to reflect the discounted price of the product that is sold as a sample as part of marketing effort with retailer.