CO GIL 16-009 Sales & Use Tax 2016-06-23

Does Colorado sales tax apply to charges for a live web seminar, a pre-recorded webinar, and a self-study course delivered over the web?

Short answer: It splits three ways by how 'live' the instruction is. A charge to attend a LIVE web seminar is NOT taxable — it's a service, because a live instructor is providing educational services. A charge to watch a PRE-RECORDED seminar IS taxable, just like renting an instructional video on DVD or over the web. And a charge for an online SELF-STUDY course IS taxable too, because there's no instruction that would make it a service. The line is live instructor interaction (nontaxable service) versus passive recorded or self-study content (taxable). (This is a General Information Letter: general guidance only, not binding on the Department.)

Disclaimer: This is an official Colorado Department of Revenue General Information Letter (GIL). A GIL provides a general overview of the relevant tax issues but is NOT binding on the Department; it makes no specific determination and represents only the good-faith opinion of Department personnel. It does not address sales or use taxes administered by self-collected home-rule cities. This summary is informational only and is not legal or tax advice. Consult a licensed Colorado tax professional about your situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

A company that offers web-based educational content asked the Department to tax-classify three formats: a live seminar streamed over the web, a pre-recorded seminar watched over the web, and a self-study course accessed online. The question is the familiar Colorado one — is the customer really buying a nontaxable service, or a taxable product (tangible/digital personal property)? The answer turns entirely on whether a live instructor is in the loop.

Pulling together its prior guidance, the Department drew three lines:

Live web seminar — NOT taxable. A charge to view a live seminar via electronic transmission is a nontaxable service, because a live instructor is actively providing educational services (citing GIL-12-013).
Pre-recorded web seminar — TAXABLE. A charge to watch a pre-recorded seminar is taxable, "just as renting an instructional video in a DVD format or via the web is subject to tax" (citing PLR-16-007). There's no live instruction; the customer is buying access to recorded content, which Colorado treats like a taxable video.
Online self-study course — TAXABLE. A charge for a self-study course is taxable because "there is no instruction that would qualify the transaction as a service" (citing GIL-08-010 and PLR-16-007). The Department expressly distinguished self-study courses from a live seminar "where an instructor provides educational services."

So the dividing line is live human instruction. Real-time teaching by an instructor is a service (untaxed); passive consumption of recorded or self-study material is a taxable product, no matter that it's delivered over the web.

What this means for you

Online course and webinar sellers

Classify each product by format, not by your brand or marketing. If a customer logs into a live, instructor-led session, that registration fee is a nontaxable service. If they're paying to stream a recording or work through a self-guided module, that's taxable in Colorado — treat it like selling a video. Mixed bundles (live session plus downloadable recordings) may need to be analyzed, and separately stated, component by component.

Continuing-education and training providers

The presence of a live instructor is the pivot. "On-demand" replays of a previously live webinar fall on the taxable side once they're just recordings. Build your tax determination around whether the learner is interacting with a live instructor in real time.

Accountants and tax professionals

This GIL consolidates GIL-12-013 (live = service), PLR-16-007 (recorded video = taxable; e-books/self-study courses = taxable digital goods), and GIL-08-010 (self-study = taxable). It's consistent with Colorado's broader treatment of digital goods as taxable "corporeal" property while genuine instructor-delivered services stay untaxed. Note the home-rule-city caveat for self-collected jurisdictions.

Common questions

Q: Is a live webinar taxable in Colorado?
A: No. A charge to attend a live web seminar is a nontaxable service because a live instructor is providing educational services in real time.

Q: Is a recorded/on-demand webinar taxable?
A: Yes. A charge to watch a pre-recorded seminar is taxable, the same way renting an instructional video on DVD or over the web is taxable. There's no live instruction.

Q: Are online self-study courses taxable?
A: Yes. The Department treats self-study courses as taxable because there's no instruction that would make the transaction a nontaxable service.

Q: What's the deciding factor?
A: Live instructor interaction. Real-time teaching by an instructor is a nontaxable service; passive recorded or self-study content delivered over the web is a taxable product.

Q: Can I rely on this letter?
A: Only as general guidance. A General Information Letter is not binding on the Department and makes no specific determination. For a binding answer on your facts, request a private letter ruling.

Citations and references

Statutes and rules:
- § 39-26-104(1)(a), C.R.S. (tax on sales of tangible personal property)

Related guidance (cited by the Department):
- GIL-12-013 (live electronically transmitted seminar is a nontaxable service)
- PLR-16-007 (pre-recorded video taxable; e-books and self-study courses are taxable digital goods)
- GIL-08-010 (self-study course is taxable)

Source

Landing page: Colorado Sales & Use Tax Letter Rulings
Original PDF: GIL-16-009.pdf

Original ruling text

Office of Tax Policy
P.O. Box 17087
Denver, CO 80217-0087
[email protected]

GIL-16-009
June 23, 2016
XXXXXXXXXXXXXXX
Attn: XXXXXXXXXXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX
Re: Web Seminars
Dear XXXXXXXXXX,
You submitted on behalf of XXXXXXXXXXXX (“Company”) a request for guidance concerning web
seminars.
The Colorado Department of Revenue (“Department”) issues general information letters and
private letter rulings. A general information letter provides a general overview of the relevant tax
issues and is not binding on the Department. A private letter ruling provides a specific
determination for a specific set of facts, is binding on the Department but not on the taxpayer, and
requires payment of a fee. For more information about general information letters and private
letter rulings, please see Department regulation 24-35-103.5 at www.colorado.gov/revenue/tax >
Tax Library > Rulings.
The Department treats this request as a general information letter. It is important to remember that
general information letters, such as this one, are general discussions of tax law and are not binding
on the Department. If Company would like the Department to issue a private letter ruling on the
issue raised here, Company can submit a request and pay the fee in compliance with Department
Rule 1 CCR 201-1, 24-35-103.5.
Issues
1. Is a charge for attending a live seminar via the web subject to sales tax?
2. Is a charge for watching a pre-recorded seminar via the web subject to sales tax?
3. Is a charge for accessing a self-study material via the web subject to tax?
Background
Company offers tax guidance to clients and requests guidance from the Department on the three
issues listed above.

Structure of Analysis

To determine whether Company is required to collect sales tax, the Department will examine the
following questions:
1. Is Company selling tangible personal property pursuant to § 39-26-104(1)(a)?
a. Is the true object of the transaction the sale of tangible personal property or a nontaxable service?
Discussion
The Department previously issued guidance on the taxability of charges to view a live seminar via
an electronic transmission in which we stated that the charge is not taxable because it is a
service.1 The Department also provided guidance on the taxability of a charge to view a prerecorded seminar via an electronic transmission in which we stated that the charge is subject to
tax, just as renting an instructional video in a DVD format or via the web is subject to tax.2 Finally,
we have issued guidance that a charge for a self-study course is subject to tax because there is no
instruction that would qualify the transaction as a service.3 These self-study courses are
distinguished from the live seminar where an instructor provides educational services.
Miscellaneous
This letter represents the good faith opinion of Department personnel who are knowledgeable on
state taxes issues. However, the Department does not make a specific determination here on any
of the issues raised and the Department is not bound by this general information letter.
The Department administers state and state-administered local sales and use taxes. This letter
does not address sales and use taxes administered by home-rule cities and home-rule counties.
You may wish to consult with local governments which administer their own sales or use taxes
about the applicability of those taxes. Visit our web site at www.colorado.gov/revenue/tax for more
information about state and local sales taxes.
Enclosed is a redacted version of this letter. Pursuant to statute and regulation, this redacted letter
will be made public within 60 days of the date of this letter. Please let me know in writing within
that 60 day period whether you have any suggestions or concerns about this redacted letter.
Sincerely,

Office of Tax Policy
Colorado Department of Revenue

1
2
3

See General Information Letter GIL-12-013
See Private Letter Ruling PLR-16-007
See GIL-08-010 and PLR-16-007
DR 4010A (06/11/14)