Sales & Use Tax | Letter Rulings

Private Letter Rulings and General Information Letters

Businesses and individuals can request a general information letter or private letter ruling on any tax administered by the department. General information letters are general discussions of tax issues that are not specifically addressed in other department publication, such as FYIs, rules and regulations, or form instructions. General Information Letters are general statements of department understanding and cannot be relied upon as binding guidance. Private letter rulings are specific determinations of the tax consequences of a proposed or completed transaction. Unlike general information letters, private letter rulings are binding on the department and, therefore, provide taxpayers with greater certainty for their business and personal taxes. However, private letter rulings can only be relied upon by the party to whom the ruling is issued. Private letter rulings cannot be relied upon by any taxpayer other than the taxpayer to whom the ruling is made. For more information about general information letters and private letter rulings, including fee amounts and how to submit a request, please see department regulation 1 CCR 201-1 (24-35-103.5)
The Colorado Legislature recently enacted House Bill 19-1240, which changes the way retailers source their sales when doing business in Colorado. HB19-1240 also changed the circumstances in which a person would be considered to be "doing business in Colorado" for sales and use tax purposes. In light of these changes, certain letter rulings have been rescinded. The Colorado Department of Revenue administers state and state-administered local sales and use taxes. You may wish to consult with those local governments that administer their own sales or use taxes about the applicability of HB19-1240 in that jurisdiction. Visit our Sales Tax Changes web page for more information.

PLR-20-001   Vehicle Sharing Transactions

Vehicle sharing platform operator must collect sales taxes and daily rental fees from drivers on vehicle sharing transactions.

PLR-19-001   Transferable Tax Credit Program

This letter addresses the transferable income tax credits in section 24-46-104.3, and specifically how the transfer of eligible Enterprise Zone credits are treated by the Department.  

PLR-18-001   Place of Sale for Out-of-State Business - Rescinded

PLR-18-003   Taxability of Prototype Development

Company's purchase of aircraft component parts that will be used in the construction of an aircraft prototype are exempt from Colorado sales and use tax under § 39-26-711, C.R.S. Machinery and machine tools purchased by Company to build the prototype aircraft will be exempt from Colorado sales and use tax under § 39-26-709, C.R.S.

PLR-18-004   Sales of Services

When a vendor transfers tangible personal property to a customer as part of services performed by the vendor for the customer, the application of sales tax will depend on whether the sale of property and services are separable and, if not, whether the customer’s “true object” is to acquire the tangible property, in which case the transaction is subject to tax, or to receive the service, in which case the transaction is a non-taxable service. Taxpayer at issue performs services of converting raw data into information delivered to clients. The paper on which the information is sent is incidental to the client’s true object. Therefore, the charges by Company are for a service and are not subject to sales or use tax.

PLR-18-007  Optional Motor Vehicle Warranties

The price for a non-taxable service sold in connection with the sale of a taxable product is included in the calculation of tax for the taxable product if; the price for the non-taxable service is not separately stated, or the sale of the non-taxable service is inseparable from the sale of the taxable product. 

PLR-18-008  Enterprise Resource Planning Software Maintenance Contracts

Company's charges for its computer program maintenance and support services are not subject to sales or use tax, as company is not selling taxable computer software.

GIL-18-001   Reporting Requirements for Non-collecting Retailers

An out-of-state, subscription-based company that offers a monthly service in which no customer action is required to initiate a new monthly shipment does not have to send recurring Transactional Notice's for subsequent shipments. Company must provide the out-of-state purchaser with the Transactional Notice and Annual Purchase Summary and include the out-of-state purchaser in the Annual Customer Information Report sent to the Department. 

GIL-18-002   Monthly Charges for Energy Savings Technology

A monthly “subscription” charge may be subject to sales or use tax when the charge is more reasonably considered a taxable rental of tangible personal property and not a company providing a nontaxable service. Factors that help determine whether a charge is more closely aligned with the provision of a taxable rental of tangible personal property or a nontaxable service are reviewed in this letter.

GIL-18-003   Tax Due on Delivery and Installation

Tax is collected only on the price paid by the customer for the product, and not on the delivery or installation charges, if those charges are separately stated and the customer is not required to purchase delivery or installation services as part of the sale of the product.

GIL-18-004   Taxable Nature of Prescription Pet Food

Prescription pet food may be eligible for exemption from sales tax when the prescription pet food is prescribed by a veterinarian, furnished by the prescribing veterinarian, and leaves the veterinarians facility with the patient.

GIL-18-005   Component Airplane Parts

Component airplane parts that are permanently affixed to aircraft are exempt from sales and use tax, even when the aircraft is not a commercial airline used in interstate commerce. 

GIL-18-006   Occasional Sales

Sales made by charitable organizations are generally subject to state sales tax, but may be exempt if the sales meet the qualifications for occasional sales. If an organization fails to meet the requirements, then all sales by the charitable organization may be subject to sales tax. 

GIL-18-007   Scaffolding Rental

The rental of scaffolding if delivered on its own without an associated charge for installation would likely be subject to sales tax.  Related items, such as tenting, cords, wood planking, and lighting are also tangible personal property and the rental of such would likely be subject to tax.

GIL-18-008   Installation of Commercial Signage

In cases where the sale of goods also involves the sale of related services, such as the service of installation of property, if the sale of the service is both separable from the sale of the taxable goods and the price for the service is separately stated, then sales tax is calculated only on the price of the taxable goods. If the sale of the installation service is separable from the sale of the sign, then charges for services associated with installation are also likely nontaxable. 

GIL-18-009   Restaurant Condiments

The taxability of a restaurants purchase of ingredients to make condiments is dependent on the restaurants ultimate use of the condiments. When a restaurant makes condiments available to customers, the condiments are not treated as if they are sold to customers. The restaurant is viewed as the user and consumer of these products and must pay sales tax when these items are purchased from suppliers. However, Colorado exempts the purchase of food ingredients that become an integral or constituent part of a food product that is intended to be ultimately sold at retail for human consumption.  If the restaurant separately states a price for a condiment when sold to a customer, the sale is likely a retail sale.

GIL-18-010   Prescription Containers Purchased by Pharmacies

A pharmacy’s purchase of containers and labels from a vendor will be exempt from sales or use tax when the containers and labels purchased are later used to contain and dispense an order for the pharmacy’s customers.

GIL-18-011   Sale of Water and Ice Through Vending Machines

Water and ice sold through a vending machine is likely not taxable under §§ 39-26-102.15 or 39-26-102(4.5), C.R.S. The Department defines food under the federal Supplemental Nutrition Assistance Program, which defines food to include water in a bottle and crushed or block ice.

GIL-18-012   Sale of Electric Car Charging Stations and Contracts

This letter provides a brief overview of the considerations the Department makes when determining whether the sale of network access fees and maintenance contracts are subject to sales tax when sold in conjunction with tangible personal property. 

GIL-18-013   Essential Containers

If a food container is “not necessary to transfer the food to the consumer,” the container is nonessential and subject to taxation. If “the retailer cannot transfer the food to the consumer without” the container, it is exempt from taxation. 

GIL-18-014   Catering and Facility Rentals by Charitable Organizations

Catering services provided by a charitable organization are exempt from Colorado sales and use tax if the organization has not exceeded the occasional sale exemption thresholds. Rental of the facility may be subject to sales tax. 

PLR-17-002   Lease of Space on Telecommunications Towers

The lease of space on Company’s telecommunication towers is subject to sales and use tax.

PLR-17-003   Non-Transplantable Human Tissue

The charge by Taxpayer for provisioning non-transplantable human tissue to third parties is subject to sales and use taxes.

PLR-17-004   Membership Fees

Taxpayer's sale of membership fees are not subject to Colorado sales or use taxes. 

PLR-17-005   Retailer's Use Tax - Rescinded

PLR-17-006   Soil Erosion Control Material

Company must collect state and state-administered sales taxes on retail sales of Excelsior logs and silt fencing to construction contractors and subcontractors who present Company with their contractor's exemption certificates. 

PLR-17-007   Lost or Damaged Leased Property

Payment from a lessee to Company for the loss or damage of rental equipment is not subject to sales or use tax. 

PLR-17-008   Employee Nexus - Rescinded

PLR-17-010   Third Party Cooperative Direct Marketing Advertiser 

Company is not liable for sales or consumer’s use tax on materials produced and mailed by a third-party cooperative direct market advertiser that advertises for multiple parties in the same mailer.

GIL-17-001   Audio Visual Equipment

Company may sell audio visual equipment exempt from tax if a contractor is engaged by an exempt entity and presents either the contractor’s sales tax license or the contractor’s exemption certificate.

GIL-17-002   Equipment Leases

The lease of computers to students does not qualify for the exemption for sales to schools. The lease may be a credit sale and taxes are due on the installment payments. If the lease is a true lease, then lessor must pay tax when the lessor acquires the computers or must obtain permission from the department to collect tax on the lease payments.

GIL-17-003   Wood Pellets

Wood pellets used for a residential purpose are exempt from sales and use tax.

GIL-17-004   Change Orders Related to Long Term Leases

The replacement of existing equipment with new equipment does not convert a long term lease to a short term lease. However, if the property does not replace existing equipment but is more accurately viewed as the addition of property added to a lease, then the addition of the new property in the last three years of a lease should be viewed as a short term lease.

GIL-17-005   Sales of Mobile Devices - Rescinded

GIL-17-006    Optional Maintenance Agreement

Maintenance agreements when sold in connection with the sale or lease of taxable tangible personal property are generally subject to Colorado sales or use tax unless the maintenance contract is optional and separately stated from the sale or lease of the taxable tangible personal property. Even though the monthly lease payment does not include a breakdown of the portion of the payment that relates to the optional maintenance agreement, the lease is separately stated from the sale or lease of the taxable tangible personal property because the maintenance agreement is a separate contract from the lease contract and customers must separately sign each contract and if the cost of the maintenance agreement is included in the lease, there is a separate line item detailing the cost of the maintenance agreement in the lease contract.

GIL-17-007    Fluoride Varnish

The fluoride varnish and the other items included in the kit appear to be materials furnished by licensed providers in connection with providing professional services to patients and, therefore, would be exempt.

GIL-17-008    Marketing Material

Services provided in connection with the marketing material may be subject to tax if the services are not optional and separately stated from the sale of the marketing material.

GIL-17-009    Retailer’s Use Tax on Leases - Rescinded

GIL-17-010   Medical Imaging Equipment

If the services Company provides pursuant to a service agreement are inseparable from the sale of the original equipment, then the price for the service is included in the calculation of sales tax for the taxable goods

GIL-17-011   Electricity to Produce Software

If the activities engaged in by Company did qualify as manufacturing or as an industrial purpose, then the electricity used to program software that is included in the finished goods would likely be viewed as exempt. 

GIL-17-012   Software and Related Services

Is the sale of software or related services subject to sales tax? 

GIL-17-013   Market Reports

The sale of market reports are not the sale of a service if the report is not customized for a particular customer.  

GIL-17-014   Security Systems and Related Services

The sale of security systems and related services may be subject to sales or use tax depending on the type of service the Taxpayer offers to its purchasers. 

GIL-17-015   Independent Contractor Creates Nexus - Rescinded

GIL-17-016   Contract Manufacturing

The exemption for manufacturing machinery and machine tools likely extends to the purchase and use of these items when used in contract manufacturing. 

GIL-17-017   Core Charges

Colorado sales tax applies to a separately stated core charge if the retailer does not resell the property in the usual course of its business. 

GIL-17-018   Exemption for Silviculture Equipment

Timber and timber product handling equipment purchased after 2013 and valued by the county assessor as silvicultural equipment likely qualifies for the farm equipment exemption. 

GIL-17-020   Orthodontic Materials

Sales of orthodontic materials will not be subject to sales tax if the orthodontic materials are furnished by a licensed provider to a patient and the materials leave the facility with the patient or are consumed by the patient at the medical office. 

PLR-16-001   Electric Service Provider’s Use of Electricity

Electric service used by an electric service provider at its facilities is not subject to Colorado sales or use tax because the consumption of the electricity it generates is not a retail sale.

PLR-16-002   Oil and Gas Well Cementing Products and Services - Rescinded

PLR-16-003   Billing Services

The paper or electronic billing services are not subject to sales tax because it is an nontaxable service. The paper invoices are an incidental transfer of personal property related to the provision of a nontaxable service.

PLR-16-004   Amenity Fee

The amenity fee is subject to tax because the amenity fee is included in the charge for taxable living accommodations.

PLR-16-007   E-book, Online Courses, and Virtual Lessons

E-book and Company's online courses are tangible personal property subject to sales tax. Virtual lessons described in the ruling are a service not subject to tax.

PLR-16-008   Prosthetic Device

Product is exempt from sales and use tax as a prosthetic device.

PLR-16-009   Licensed Movies and Content

Both the digital movies/content and the computer hard drives received from the film distributors constitute tangible personal property subject to Colorado sales or use tax.

PLR-16-010   Local Tax Obligation - Rescinded

PLR-16-011   Colorado Sales or Use Tax - Rescinded

PLR-16-013   Food and Nutritional Products

Products that meet the definition of "food" and have a "Nutrition Facts" label are exempt from state sales tax.

PLR-16-014   Web Collaboration Services

Web collaboration services provided to consumers in Colorado by means of servers located outside Colorado are not subject to Colorado sales tax because it is an interstate service.

GIL-16-002   Software Updates and Maintenance Agreements

Computer software updates and maintenance agreements purchased after July 1, 2012 that are delivered electronically are not subject to sales tax because they are not tangible personal property, even if the update or maintenance is for computer software that was treated as tangible personal property when purchased.

GIL-16-003   Per Click Fee

The “per click” fee is not subject to tax because the tangible personal property, which is inseparable from the maintenance service, is exempt as a sale for resale or ingredient or component part used to produce tangible personal property that is sold.

GIL-16-005   Refunds

When a purchase of taxable tangible personal property includes a taxable shipping charge and the customer returns the item for a refund, the entire amount of sales tax must be refunded to the customer, including the tax paid on the shipping charge.

GIL-16-006   Hotel Fees and Online Travel Companies

Cancellation charges that are greater than 50% of the daily reservation room rate are generally considered payment for the room and therefore fully taxable. Attrition fees are more accurately characterized as a pricing mechanism by which a retailer adjusts for a volume discount and must be included in calculation of tax. Colorado sales tax is due on the entire amount charged to the customer for the right to occupy a room or accommodation. Therefore, the amount the online travel company charges is the amount that is subject to tax.

GIL-16-007   Booking Agent Fees

That portion of the customer’s payment taken by Company as a commission is part of the price paid by the customer and, therefore, is included in the calculation of sales tax.

GIL-16-008   Into-Plane Fee

The nontaxable sale of services are not subject to sales tax because the taxable sale of fuel and a nontaxable sale of services are separable despite their common appearance on a single invoice because the customer must engage in two separate transactions, covered by two separate contracts, with two separate entities.

GIL-16-009   Web Seminars

Live web seminars are not subject to sales or use tax because the seminar is a service. A pre-recorded web seminar and self-study material online are subject to tax.

GIL-16-010   Custom Herbal Formulas

The custom herbal formulas Taxpayer prepares and sells are subject to sales tax because they are not a prescription or nonprescription drug.

GIL-16-011   Vehicle Rentals

An advance payment applied toward the charge for a vehicle rental is taxable. Additionally, when a nonrefundable advance payment that exceeds 50% of the daily rental charge for the vehicle is forfeited due to cancellation or the customer’s failure to appear at the scheduled time, is likely a charge for the rental of the vehicle and, therefore, taxable. Conversely, a nonrefundable advance payment of 50% or less of the daily rental charge would likely be considered a nontaxable cancellation charge if it was forfeited due to cancellation.

GIL-16-012   Distributor Fees

Payment of the annual renewal fee is not subject to tax because no tangible personal property is sold.

GIL-16-013   Hotel Thirty-Day Rule

Discussion of the requirements to be eligible for the thirty-day hotel reservation rule that would exempt the hotel room from tax.

GIL-16-014   Energy for TV News Broadcast Station

Electricity used to operate TV communication towers is exempt because TV broadcast uses radio communication to transmit the TV signal and electricity used for radio communication is exempt from tax. However, energy for office computers, printers, lighting, heating, and TV cameras are not exempt.

GIL-16-015   Credentialing Services

The credentialing process, as described in the letter, appears to be a service that is not subject to sales and use tax.

GIL-16-016   Consignment Warehouse - Rescinded

GIL-16-017   Mobile Home - Rescinded

GIL-16-018   Management Fee

If Company’s client must purchase the management service when using Company’s repair and maintenance service, then the management fee is included in the calculation of sales tax, even if the price for the management fee is separately stated from the taxable sale of auto parts.

GIL-16-019   Leased On-Demand Aircraft

Company’s leases of planes do not appear to qualify for an exemption because the lessee is not a “scheduled” operator and does not meet the requirements for the on-demand carrier exemption.

GIL-16-020   Third-Party Liability

Payment of the correct type of tax and full amount of tax by one jointly responsible retailer discharges the payment obligation of the other jointly responsible retailer. However, the discharge of the monetary liability does not discharge or otherwise limit the Department’s statutory authority to administer and collect taxes from either jointly responsible retailer if a deficiency occurs in the future.

GIL-16-021   Paint Stewardship Fee

The fee that is required pursuant to § 25-17-404(2)(j), C.R.S. is included in the calculation of sales tax when purchasing architectural paint.

PLR-15-001   Electronic Messaging Services

Company's integrated desktop messaging, electronic data interchange (EDI) value added network (VAN), broadcast fax, and production email are services and not subject to Colorado sales and use tax. Company is the user and consumer of the telephone and telegraph service used to provide each of its services.

PLR-15-002   Research and Development of Product That Will be Sold

Purchases of components for manufactured product are exempt as components purchase for manufactured tangible personal property because the manufactured product may be sold.  If the product is sold and used outside Colorado, Colorado tax is not due on the sale. If the manufactured product is ultimately used by Company to provide a service rather than sold, Colorado use tax is due on the price Company paid suppliers for the components, but such tax would be due at the time the item is identified as being subject to use by Company.

PLR-15-003   Electronic Messaging Services

Company's integrated desktop messaging, electronic data interchange (EDI) value added network (VAN), broadcast fax, and notifications email are  services and not subject to Colorado sales and use tax. Company is the user and consumer of the telephone and telegraph service used to provide each of its services.

PLR-15-004   Bulk Water

Bulk water sales sold in tanks are subject to Colorado sales or use taxes, but sales of water through a pipeline are not subject to Colorado sales and use taxes.

PLR-15-007   Custom-Made Closet Organizer

A retailer's charge for assembly and installation of Product into a home is included in the calculation of sales tax because the charge for assembly is a taxable service to create a finished product and, although installation of the finished product is not taxable service, the charge for installation is not separately stated from the charge for installation.

PLR-15-008   Lessee Maintenance Agreements

Tax for a separately stated charge for motor vehicle fleet maintenance is not included in the sales tax paid by a lessee of a motor vehicle.  Lessor is liable for sales or use tax on tangible personal property used to perform the maintenance agreement

GIL-15-001   Interest, Dividend, and Capital Gain Distributions from Colorado and U.S. Obligations

If the dividend paid by the mutual fund is interest income from a United States obligation, the interest income can be subtracted from federal taxable income to the extent the income is included in federal taxable income. Colorado imposes tax on interest income from obligations of other states or their political subdivisions, but not on interest income derived from obligations of the State of Colorado and its political subdivisions.

GIL-15-002   Contractor Exemption Certificate

If a contractor does not provide a certificate of exemption to a retailer, then the contractor cannot claim an exempt sale and the retailer must charge sales tax on the transaction.  A retailer who fails to charge sales tax in such instances is liable for any sales tax that should have been collected as well as penalties and interest.  If the contractor later obtains an exemption certificate, it may apply to the Department for a tax refund or the retailer may, in its discretion refund the sales tax to the contractor and claim a credit on its sales tax return.

GIL-15-003   Cloud Service Plans

Company’s cloud service plan may constitute intrastate telephone and telegraph services. The Department would likely view charges for data plans by mobile telecommunication providers as telephone service.  If the transmission pathway involves both intrastate and interstate telephone service and the charge for the intrastate service is not separately stated, then the entire charge is subject to sales tax. The Department would likely not view the charge for cloud Wi-Fi as a charge for intrastate telephone or telegraph service.

GIL-15-004   Contract Manufacturing

When a customer supplies all the raw materials used by the manufacturer to manufacture a product for the customer (contract manufacturing), there is no taxable transfer of tangible personal property from the manufacturer to the customer and the manufacturer's charge to the customer is solely one for nontaxable services. Manufacturer's purchase of manufacturing machinery which is occasionally used for contract manufacturing is exempt under the manufacturing machinery exemption because the exemption does not require the machinery or machine tools to be used exclusively in an exempt manner.

GIL-15-005   Cattle ID Tags and Verification of Marketing Claims

Cattle identification systems that are not used at a dairy farm in connection with the production of raw milk are not exempt as “cow identification systems”. The Department would likely view the Company's auditing activities as a nontaxable service but Company is liable for sales and use taxes on its purchases of tangible personal property used to provide auditing services.

GIL-15-006   Late Payment Fees

Sales tax applies to the full purchase price because sales tax is a transactional tax.  Events that occur after the sale generally do not affect the calculation of the tax. A late payment fee is generally assessed after a sale is created and when payment is untimely made.  The late payment penalty typically reflects the finance or administrative charge for events after the sale and, therefore, do not reflect or affect the sales price at the time the transaction was created.

GIL-15-007   Leases of Low-Emitting Heavy Vehicles

A long-term lease is treated as a sale; therefore, sales and use tax exemptions apply to long-term lease payment.

GIL-15-008   Discharged Maintenance Contract

Car owner's warranty, on which owner paid sales tax, was discharged in bankruptcy and owner subsequently purchased replacement parts that would have been provided tax free to owner under the warranty. Car owner not entitled to a refund of sales tax paid on replacement parts.  Events subsequent to a taxable event generally do not affect the taxability of the transaction.

GIL-15-009   Services in Connection with Retrieving and Copying Medical Records

Retrieving and copying medical records, and activities related thereto, are services rather than the sale of tangible personal property and, therefore, are not subject to tax.

GIL-15-010   Banquet and Event Provider Charges

A general discussion of the taxability of charges associated with banquet and event rentals. 

GIL-15-011   Audio Visual Equipment

Audio visual equipment is likely not construction or building materials. A contractor who purchases tangible personal property that is not a building material will be treated as a retailer who resells the property to the real property owner. When the real property owner is a tax exempt entity, the contractor does not pay sales tax to the supplier, and does not collect sales tax on the sale of the property to the real property owner because the owner is exempt from tax.

GIL-15-012   Delivery Charge

Delivery charge is separable from the transaction because the customer can purchase a meal from Company without also being required to have the meal delivered. However, the delivery charge does not meet the "separately stated" requirement because the customer is not aware that they are purchasing a delivery charge. Therefore, the delivery charge is subject to sales tax.

GIL-15-013   Tax on Asset Acquisition through Foreclosure

A secured lender who obtains title to collateral by foreclosure is not liable for sales tax.   However, if the secured lender thereafter sells the collateral to a third party, such as by auction sale, then that sale is subject to sales tax.

GIL-15-014   Sales Taxability of Federal Excise Tax on Aviation Fuel Refunded to Customers

State sales tax does not include federal excise tax collected by the aviation fuel supplier from the airline carrier because the federal tax was always refundable and only charged in the first instance as an administrative measure to ensure the federal exemption for fuel is properly claimed.

GIL-15-015   Contractor Pays Tax when Billing on a Time-and-Material Contract

A contractor must have a sales tax license when using a time-and-material contract with the real property owner.

GIL-15-016   Employee Creates Nexus - Rescinded

GIL-15-017   Replacement Batteries in Electric Wheelchairs

Batteries for wheelchairs, motorized carts, and scooters that qualify as exempt mobility enhancing equipment are exempt.  Retailer must exercise reasonable diligence to determine that the exemption applies.

GIL-15-018   Dark Fiber

Dark fiber appears to be tangible personal property subject to tax and, therefore, the leasing of such cable may be subject to sales or use tax

GIL-15-019   Nonessential Food Articles

Condiments that are not incorporated into a prepared meal at the time it is transferred to the consumer but that are provided separately, regardless of the method by which they are provided to the customer, are nonessential food articles.

GIL-15-021   Medical Equipment and Supplies

The equipment and supplies listed by Company likely do not qualify for the medical equipment and supplies exemption because they are neither purchased pursuant to a prescription nor are they furnished by a licensed provider as part of their professional service to a patient.

GIL-15-022   Disposable Bag Fee

A municipal disposable bag fee collected by a retailer is not included in the sales and use tax calculation on goods purchased by the customer.

GIL-15-023   Sale-and-Leaseback Transactions

The tax obligations of the sale-and-leaseback transaction hinge on the term of the lease. If the term of the lease is more than three years, the lease is considered a sale and the lessor may purchase the property without paying tax and collect tax on each lease payment paid by the lessee. If the term of the lease is three years or less, the lessor must pay tax on the property at acquisition and the lease payments paid by the lessee are exempt from tax because the lessor has already paid tax on such property.

GIL-15-024   Tax Exempt Certificates

A person holding a sales and use tax exempt certificate is exempt from state, city and county, and special district sales and use taxes.

GIL-15-025   Digital Photographs

Digital photographs sold by a photographer are subject to sales tax.

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.

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.

PLR-14-004   Delivery and Pick-up Charges

Company’s delivery and pick-up charges are not subject to Colorado sales and use tax because they are separable from the rental of the equipment.

PLR-14-005   Internet Wine Sales - Rescinded

PLR-14-006   Food for Retirement Communities

Charges by a residential retirement community to residents for meals are exempt from state sales tax. Company’s purchase of food products from suppliers are also exempt from tax.

PLR-14-007   Cancer Treatment Therapy

The rental of company’s cancer treatment therapy equipment is exempt from sales and use tax as medical equipment and related accessories for electrotherapy dispensed pursuant to a prescription.

GIL-14-001   Promotional Videos

The production of a video is a non-taxable sale of services, even though some inconsequential 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.  Company must pay sales or use tax on the items it uses to perform its service. 

GIL-14-002   Manufactured Homes

The tax liability will depend upon the type of contract the builder uses with the homeowner. 

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.

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-14-005   Mail Order Sales - Rescinded

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-14-008   Membership Fees/Partial Refund

When a membership fee includes both the transfer of tangible personal property and the provision of services (or intangibles) to the buyer, the entire transaction will generally be treated as taxable, unless the true object of the transaction is the acquisition of services (or intangibles) and the value of the tangible personal property is inconsequential. A partial refund of the purchase price presumably means that the buyer has used the property to some extent and, therefore, no refund of tax is allowed.  However, if the refund is for property that has not been used, such as in the case of a canceled magazine subscription and the refund reflects the magazines not yet delivered, then a refund of tax for the partial refund of the purchase price is permitted.

GIL-14-009   Demand Charge

A demand charge for the sale of electricity is taxable unless used for residential or industrial purposes. 

GIL-14-010   Doing Business in Colorado - Rescinded

GIL-14-012   Infusion Pumps

An infusion pump that administers medications is exempt from Colorado sales and use tax if prescribed by a licensed provider.

GIL-14-013   Local Sales Tax Collection on Equipment Leases - Rescinded

GIL-14-014   Hemodialysis Devices

Hemodialysis devices may qualify for the durable medical equipment exemption.

GIL-14-016   Prepaid Fuel Charges for Rental Vehicles and Transportation Charges

Prepaid gasoline and transportation charges relating to the lease of a motor vehicle may not be taxable so long as the charges are separately stated and optional.  However, if the lessor’s transportation service is the only realistic transportation option, then those transactions may not be separable, and therefore may be taxable.

GIL-14-018   Colocation Services

A transaction involving the use of tangible personal property will generally be treated as a taxable rental of tangible personal property if the customer has control over the property.  Conversely, the transaction will be treated as a non-taxable service if the provider has primary control over the property. The provision of private lines for intrastate telephone and telegraph services is subject to sales tax.

GIL-14-020   Marijuana RFID Tags

RFID tags used by marijuana cultivators to track transfers of marijuana are not exempt either as farm equipment (§36-26-716(1)(d), C.R.S.) or as labels (§39-26-102(20), C.R.S.) and, therefore, are subject to sales or use tax when purchased by marijuana cultivators.

GIL-14-021   Lease Payments on Vehicles Used in Interstate Commerce

A purchase of a new or used trailer, semitrailer, truck, truck tractor, or truck body for use exclusively outside Colorado or in interstate commerce and delivered by a Colorado manufacturer or dealer within Colorado, driven or moved by the buyer outside the state within thirty days after the delivery date is not subject to the sales tax at the time of purchase. If the company is required to designate Colorado as its base jurisdiction, the lease payments will likely be subject to sales tax.

GIL-14-022   Consolidated Freight Charges

If retailer’s consolidated freight charge genuinely occurs after the product is purchased, then the charge appears to be a drop shipment and the transportation charge is not subject to tax.  However, if retailer’s consolidated freight charge is assessed regardless of whether a product is being purchased or before the purchase is complete, then the charge appears to be a freight-in charge subject to tax. A transportation charge must fairly reflect the cost of transportation.

GIL-14-024   Walk-in Bathtubs, Wheelchair Lifts, Modular Ramps

In-home wheelchair mobility lifts and modular ramps provided pursuant to a prescription by a licensed provided are mobility enhancing equipment exempt from tax. A walk-in bathtub provided pursuant to a prescription by a licensed provider to someone with an illness or injury appears to be eligible for the durable medical equipment exemption.

PLR-13-002   Fees Related to Retrieving and Copying Medical Records

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.

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.

PLR-13-004   Installation, Repair and Inspection Charges and Payments to Third Party Subcontractors

Company’s charges for installation, repair, or inspection of fire suppression system built into real property are subject to sales tax when billing clients on a time and material basis for work performed by a subcontractor. Company’s payments to subcontractors for this work are not subject to sales tax.

PLR-13-005   Retrieving and Copying Medical Records

Fees charged by a company in the business of retrieving and copying medical records of health providers  are not subject to sales and use tax because Company is providing a service.

PLR-13-006   Hardware and Software Used in the Provision of Intrastate Telephone 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.

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.

PLR-13-009   Consigned Merchandise Procured for Auction - Rescinded

GIL-13-001   Purchase Price That Includes Sales Tax

Company that either provides an invoice for the sale and separately states the tax or has a conspicuous sign that shows the price of each item and separately states the amount of tax for each item offered for sale is in compliance with state law.

GIL-13-002   Sales Tax Refunds When an Exemption Certificate Is Provided After the Sale

The sales tax refund procedure outlined in the ruling, including the ninety day limitation on refunds by vendor, appears to be consistent with Colorado statutes.

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   Natural Gas and Electricity Subject to 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.

GIL-13-006   Resale Exemption Certificates for Drop Shipments

Colorado allows Company, as a wholesaler, to accept sales tax licenses and exemption certificates issued by another state.  If Company contracts to sell its product directly to the consumer and the consumer has an exemption certificate issued by another state, then Company is not required to collect sales tax from the consumer.  However, if Company sells its product to a retailer and the retailer does not have a sales tax license or exemption certificate issued by Colorado or another state, then Company must collect sales tax from the retailer, even if the ultimate consumer has an exemption certificate issued by Colorado or another state.

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.

GIL-13-008   Fees Associated with Company-Owned Vending Machines

The taxability of various fees charged by a vending machine operator whose vending machines are located at customers' locations are discussed.

GIL-13-010   Re-Rental of Equipment

A company that leases equipment from a rental company and that uses its own employees or subcontracts with an independent contractor to operate the equipment cannot claim a resale exemption.

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-13-014   Software License Renewal

A charge for a license renewal to use taxable software is subject to tax when the original license and software were delivered by a tangible medium but the renewal is delivered electronically with no transfer of tangible personal property because the license renewal  is simply a charge for the continuing right to use taxable tangible personal property.

GIL-13-015   Fees and Charges Applied to Utility Bills

The taxability of charges for connection, disconnection, late-payment and other items are discussed.

GIL-13-016   Fair Market Value Lease Rate Between Related Parties

The Department generally uses the lease price resulting from arms-length transactions as the best method for valuing an airplane lease price that is not the result of an arms-length transaction.  If arms-length pricing is not available, the Department will look at various cost components, including interest rates, to calculate the fair market value of airplane lease payments.

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-13-020   Electronically Delivered Software

Electronically delivered goods, such as music, movies and books will still be viewed as taxable sales of tangible personal property after July 1, 2012, which is the effective date of amendments to the statutory definition of tangible personal property that exclude electronically delivered computer software. The amendments also exclude from tax charges by application service providers (ASP).

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-13-027   Drilling Equipment - Rescinded

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.

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 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.

PLR-12-002   Affiliate Nexus - Rescinded

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.

PLR-12-004   Bone Fracture Repair Product

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.

PLR-12-006   Food and Nutritional Products

Meal replacements that have a Nutrition Facts label 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-12-001   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 patient is the report.

GIL-12-002   Orthotic Insert

 A shoe insert does not qualify for the prosthetic device exemption.

GIL-12-003   Lay-a-way Service and Cancelation Fees - Rescinded

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.

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 both the materials and fabrication services.

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.

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 to customer.

GIL-12-008   Sales to Native American Tribal Members and Tribal Governments - Rescinded

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-12-014   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-12-016   Affiliate Nexus - Rescinded

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 - Rescinded

PLR-11-001   Direct Marketing Advertising Material - Rescinded

PLR-11-003   Authentication Services

Sales of authentication services by means of a digital certificate are not subject to Colorado sales or use taxes.

PLR-11-004   Direct Mail Advertising Materials and Fulfillment Services

Separately stated charges for the sale of direct mail advertising materials to a client who directs an advertising agency to instruct a printer to print and mail the material to customers located outside Colorado are not subject to sales and use tax. Separately stated charges of an advertising agency to its client for mailing fulfillment services are not subject to sales or use tax.

PLR-11-005   Collecting and Reporting of Adjustment Payments

Company collects and reports sales and use taxes as set forth in the Discussion section.

PL-11-006     Local Sales Tax - Rescinded

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.

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 a 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.

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-11-001   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.

GIL-11-002   Sales Tax on Personal Property Tax

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 lessee.

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 Sales Tax Obligation 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 devices” because the pump measures an insulin dosage and injects the insulin. 

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-11-007   Freight-in Transportation Charges

Transportation charges incurred in connection with transporting tangible personal property from the place of production or the manufacturer to the seller or to the seller's agent or representative are deemed “freight -in” charges and are subject to tax.

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.

GIL-11-009   Rebates

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

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.

GIL-11-011   Services Related to Medical Devices

Colorado does not impose sales tax on the provisioning of medical-related services.

GIL-11-012   Local Sales Tax on Internet Sales - Rescinded

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 its 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.

PLR-10-001   Carbon Dioxide and Tanks

Supplier's sale of carbon dioxide to retailer for beverage carbonation is exempt wholesale sale, but sale of nitrogen as beverage propellant is a taxable retail sale. Supplier's rental charges for gas cylinders and storage tank are not exempt under container exemption.

PLR-10-002   Transportation Services

Charges for transportation services are presumed exempt, but are taxable if 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 prepared by food service company and facility must pay sales tax on the charges by the food service company, including charges for overhead and management fees.

PLR-10-004   Catheters 

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   Acceptance Testing

Acceptance testing by buyer under Colorado's Uniform Commercial Code is part of the sales transaction and is not a separate taxable use.

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.

PLR-09-003   Hydraulic Fracturing Materials

Company directed to collect state use tax and county sales tax on fracturing materials pending final decision in Noble Energy case.

PLR-09-004   Services Offered in Conjunction with Vehicle Rental

Toll fee, roadside assistance, and carbon offset programs offered as an option with the rental of motor vehicles and separately stated on invoice are not included in calculation of sales tax.

GIL-09-001   Service charge and  Sales and Income Tax Nexus of Call Center Employing Independent Contractors - Rescinded

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

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 minimus.

GIL-09-005   Lessor or 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-09-007   Room Rental to Church Members on Ski Vacations

A sales tax exemption for a church does not apply to lodging by church members if primary activity was a ski vacation.

GIL-09-008   Nexus Created by Related Service Activity - Rescinded

GIL-09-009   Enteral Feeding Pump

Feeding pump is not an exempt product.

GIL-09-011   Preparation of Sales Tax Return and Exemption Certificates

An Internet service that prepares sales tax exemption certificates and sales tax returns is a non-taxable service.

GIL-09-013   Medical Supplies

General discussion of exemptions for medical supplies furnished by a doctor or sold to a charitable entity.

GIL-09-014   Service Charge for Call Center Employing Independent Contractors to Perform Work for Clients in Colorado.  

General discussion of taxability of marked-up charges in cases of resellers, agents, brokers, third party contracts. 

GIL-09-015   Dietary Supplements

Dietary supplements are not exempt from sales and use tax.

GIL-09-016   Sales Tax Calculated as a Percentage

Sales tax is calculated by multiplying the tax rate by the sales price.  The department does not authorize retailers to use sales tax charts.

GIL-09-017   Sales of Propane and Firewood

Sales of propane and firewood for residential purposes are exempt from sales and use tax.  Retailer must provide reasonable documentation to establish sales are exempt.

GIL-09-018   Print and Mail Services / Data Transfer / Address Confirmation / Electronic Data Search

General discussion of taxability of 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 the 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-09-022   Custom Disposable Medical Instruments 

General discussion of exemptions for custom disposable instruments for patients undergoing joint replacement surgery.

GIL-09-023   Obligation to File Returns if No Reportable Sales

Company must register and file sales tax returns even if it does not have any sales tax liability for the reporting period.

GIL-09-024   Modular Home

Modular home retailer liable for sales or use tax in Colorado.

GIL-09-025   Downloaded Documents

Documents downloaded by customers from the Internet subject to sales or use tax.

GIL-09-027   Maintenance and Service Agreements

Sales tax applies to maintenance and service agreements sold in connection with the sale of taxable goods, unless the agreement is in a separate contract or retailer obtains permission to exempt a percentage of sales price.  If customer has no option but to purchase maintenance/service agreement as part of purchase of taxable goods, then the agreements are taxable.

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-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-08-001   Custom Software, Installation, Repair, Transportation, and Training

Custom software, installation, repair, transportation, and training are generally non-taxable services

GIL-08-002   Web-Hosting and Network Connectivity Charges

Web-hosting and network connectivity charges by an out-of-state company when the servers are not located in Colorado are not taxable.

GIL-08-003   Retailer's Due Diligence on Wholesale Sales

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, and Heel Pads

Sales of scooters, boot walkers and heel pads are not exempt therapeutic devices.

GIL-08-005   Merchandising Services

Retailer providing service of merchandising is not taxable.

GIL-08-006   Cosmetic Medical Treatments

Cosmetic products may qualify as material furnished by a licensed provider as part of the licensed provider's professional service to the patient.

GIL-08-007   For-Profit Day Care Providing Food, Plates, and Utensils

A day care 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 Use of 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   School Materials

A business that offers home study programs and sells books and supplies is not selling a service.  Therefore, the sale of books and other goods to customer are taxable.

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 alternative but to use retailer's shipping services.

GIL-08-012   Propane Tanks and Prepaid Phone Cards

Propane is exempt if sold for residential use.  The retailer must take reasonable steps to ensure the sale is for an exempt use  Discussion of taxability of customer supplied propane tanks and retailer supplied propane tanks.  The distributor of prepaid phone cards is the consumer of card stock and is not entitled to the resale exemption.  Retailer of the taxable goods or service purchased with card is responsible for collecting tax, not the card distributor.

GIL-08-013   Mattresses and Pillows

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-08-015   Reporting Excess Sales Tax

Discussion on how to report excess tax collected on a sales tax return.

GIL-08-016   Software Updates and Upgrades

Upgrades of taxable software are taxable.  Software to correct bugs in original taxable software is not taxable.

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-08-018   Food Supplements, Soap, Deodorant, and Other Products

Supplements and other products are taxable.

GIL-08-019   Printing and Mailing Material

Discussion of taxability of print material and collection of local sales taxes.

GIL-08-020   Restocking Fees, Travel, Training and 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   Dietary Supplements and TENS Unit

Dietary supplements are taxable.  TENS is an exempt therapeutic device.

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-08-023   Purchase Options on Leases, Insurance Premiums, Late Payment and 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 the sale of clothing.

GIL-08-025   Patient Tracking and Incentive System

System for tracking patients and incentive program is a non-taxable service.

GIL-08-026   Medical Implants

Discussion of whether screws and plates used for bone fractures qualify for the medical supply 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 is a taxable sale to consumer.  Installation is an exempt service.  Transportation is generally exempt except for freight-in charges or if the charge is inseparable from sale of signs.  City permits are not taxable.  Repair work of subcontractor is discussed.

GIL-08-029   Leased Property - Rescinded

GIL-08-030   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 of Medical Records Service - Rescinded

GIL-08-032   Medical Vaccines and Testing Equipment

Discussion of exemption for flu vaccine, urine test, and other medically-related items.

GIL-08-033   Sale of 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 Game, Energy Drinks, and 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-08-035   Hospital Beds and Wheelchairs

General discussion of exemption for sale of hospital beds and wheelchairs.

GIL-08-036   Surgical Stapler and Forceps - Rescinded

GIL-08-037   Property Temporarily Used in Colorado

The exemption from use tax for property used, stored, or consumed temporarily in Colorado applies only to individuals, not business entities.

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-07-002   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 Optic Cable

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-07-005   Special Events Creating Nexus - Rescinded

GIL-07-006   Gift Card Stock Bundled with Software

A sale by a distributor of card stock is not an exempt wholesale because distributor was the consumer, not reseller, of card stock.  Software bundled with card stock may be taxable if not separable from sale of card stock.

GIL-07-007   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-07-008   Nexus of Out-of-State Distributor - Rescinded

GIL-07-009   Lease of Water Treatment Solutions - Rescinded

GIL-07-010   Animal Management Software and Property - Rescinded

GIL-07-011   Drop Shipments and Wholesale Sale Documentation - Rescinded

GIL-07-012   Local Sales Tax - Rescinded

GIL-07-013   Rental of Equipment, Transportation Charges, and 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 and Entertainment Package with Various Vendors

Discussion of sales tax reporting requirements of two retailers which jointly offered discount food and entertainment program.

GIL-07-015   Wheelchairs and Scooters - Rescinded

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-07-017   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 and Transportation Charges

Discussion of various aspects of retailer's sale, installation, and transportation of product.

GIL-07-021   Sales Tax Refunds for Completed Transactions

Buyer purchased taxable property then asked retailer to rebill the purchase to a third-party.  Retailer is entitled to refund of sales tax for completed transactions only if retailer would have granted full refund to buyer even in absence of buyer's request to rebill transaction to a third-party.

GIL-07-022   Carbon Dioxide and Tanks

The sale of carbon dioxide by supplier to retailer for soda fountain drinks is exempt.  The lease of tanks for shipping carbon dioxide by supplier to retailer may be exempt.

GIL-07-023   Nexus of Out-of-State Distributor - Rescinded

GIL-07-024   Electricity Used in Manufacturing and Research and Development as Manufacturing

Discussion of availability of exemptions for use of electricity, research and development, and statute of limitation for sales tax.

GIL-07-025   Medical Equipment

External fixators and wires are exempt medical equipment.

GIL-07-026   Nexus for Conducting Sales Seminars - Rescinded

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-07-028   Documentation Requirement for Exempt Sales

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-07-029   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-07-030   Nexus of Application Service Provider - Rescinded

GIL-07-031   Drop Shipments - Rescinded

GIL-07-032   Drug Test Kits - Rescinded

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.

GIL-07-034   Cholesterol and Blood Testing Kits

Cholesterol and blood testing kits are not taxable.