Colorado State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Colorado, with full citations and the original source on every page.
No Colorado rulings match these filters
Try a different search term or clear the filters.
How does Colorado tax a paid subscription program that includes digital products, services, and a free trial?
The paid subscription program is subject to Colorado state and state-administered local sales tax on its full price. The Department found that the program gave customers access to digital movies,…
Does an out-of-state seller with no Colorado location have to collect Colorado sales tax on prefabricated homes, and how much of the price is taxable?
It depends, with two answers. First, Colorado exempts 48% of the purchase price of prefabricated housing from state sales tax, and any later resale is fully exempt from state use tax; these…
Does Colorado charge sales or use tax on an aircraft that was bought out of state but is then based in or flown into Colorado?
No sales tax, but yes use tax. An aircraft bought outside Colorado is not subject to Colorado sales tax, but once it is based in or used in Colorado it owes Colorado use tax, and the expired…
Does a charity owe sales or use tax when it pulls resale inventory it bought tax-free and gives the items away to donors, customers, or performers?
It depends. Giving a gift is not a sale, so no sales tax is due on the act of giving — but the giver becomes the user and consumer of the item. When a charity buys goods tax-free for resale and then…
Does a cable TV company owe Colorado sales tax on its basic and premium channel packages, sports packages, pay-per-view events, and video-on-demand?
No. A cable company's sales of basic and premium channel packages, sports packages, pay-per-view events, and video-on-demand are not subject to Colorado state or state-administered local sales tax,…
Does electricity used in an apartment complex's common areas — pools, gyms, yoga rooms, clubhouses — qualify for Colorado's residential-energy sales-tax exemption?
No. Electricity used in an apartment complex's common areas — swimming pools, fitness centers, yoga rooms, clubhouses — does NOT qualify for Colorado's residential-energy sales-tax exemption and is…
How much restricted stock unit income does a Colorado nonresident source to Colorado?
Use Colorado work days during the period the employee had to keep working before each restricted stock unit vested, divided by all work days in that period. In the letter’s two-year example, half of…
Were a Colorado cable provider's channel packages, sports packages, pay-per-view, and video-on-demand charges subject to state sales tax?
No, under the described transactions. The Department treated the packages and viewing rights as mixed transactions whose true object was a service not specifically taxed by Colorado, so state and…
Are prescribed telephones for hearing-impaired customers exempt from Colorado sales tax?
Yes. The Department treated the described telephones as exempt durable medical equipment when customers had practitioner documentation, used them for hearing-impaired communication, and received…
Were a Denver IT provider's electronic software, cloud services, and backup service subject to Colorado sales or use tax?
No, under the described delivery and service arrangements. The electronic or hosted products were not taxable tangible software, and the backup service's true object was nontaxable software and…
Are chemicals sold to businesses that make spray-on truck bed liners wholesale sales exempt from Colorado sales tax?
It depends on the purchaser’s transaction. Chemicals sold to a manufacturer that incorporates them into a product can be an exempt wholesale sale. But if the purchaser is using the chemicals as the…
When may a Colorado renewable-energy project claim an enterprise zone investment credit, and does selling most of the project LLC disqualify it?
The credit belongs to the tax year qualified property is placed in service. Selling 77.5% interests in the project LLCs shortly afterward did not, by itself, disqualify the requesting company, but…
How does Colorado source guaranteed payments for services paid to nonresident partners?
The Department's nonbinding guidance sources a service-related guaranteed payment like wages: work performed in Colorado produces Colorado-source income. A partnership's election for sourcing…
Can a Colorado educational charity buy meals for attendees at its medical conferences without sales or use tax?
Yes, for the described conferences. The Department found that meals included in attendance fees and consumed during the educational conferences were purchased in the course of the organization's…
Must a Colorado peer-to-peer car-sharing platform collect sales tax and the daily vehicle rental fee from drivers?
Yes, under the proposed contracts. The Department treated the platform as the vehicle lessor, required it to collect sales tax on short-term lease payments, and required the daily rental fee on…
Does labeling a gift-wrapping charge as a service fee make it exempt from Colorado sales tax?
No. The Department's nonbinding letter says the customer pays for tangible decorative packaging, so the charge is taxable even when the retailer also performs wrapping labor.
Could a Colorado charity certify the portion of an auction purchase price above an item's fair market value for the child care contribution credit?
Yes, subject to the stated conditions. The charity could issue Form DR 1317 for the excess above fair market value if the buyer intended a gift and valuation requirements were met; the Department…
Did contributions to a snowsports club's new clubhouse and gym qualify for Colorado's child care contribution credit?
No. The Department found that the project primarily supported athletic training rather than care comparable to a licensed child care center, and it would serve children older than 12.
Must a Colorado estate-sale company collect sales tax when selling clients' motor vehicles?
It depends. A licensed or license-required auto dealer must collect the tax. An unlicensed auctioneer may avoid collecting it for a qualifying auction sale, but must collect on vehicles sold by…
Could a Colorado fund allocate affordable housing credits through its partnership structure, and who would recapture credits?
Yes, if the assumed federal partnership and interest treatment held. Class B members could receive allocations through indirect interests; claimants who used credits against Colorado tax would face…
Must an out-of-state bakery seller register and file Colorado sales tax returns when its baked goods are state-exempt?
Yes. The seller exceeded Colorado’s $100,000 economic-nexus threshold, so it had to register and file returns, even for exempt sales. Its flour-containing baked goods were exempt from state and…
Did donations to a ski-racing club's training-area expansion qualify for Colorado's child care contribution credit?
No. The project primarily expanded ski training with trails, lifts, and snowmaking rather than providing care comparable to a child care center, and its programs included athletes older than 12.
Does Colorado sales tax apply when a guest rents an entire single-family home rather than one room?
Yes. The Department's nonbinding letter says the accommodation tax applies to a private home's rooms even when one guest rents the whole house and has exclusive access to its other areas.
How do Colorado transferable credits carry forward, and does state certification eliminate tax-return audits?
The original company keeps each credit’s ordinary carryforward only until its transfer election. A transferee has the program’s shorter three-tax-year carryforward. An approved Enterprise Zone…
Is a third-party company's charge for ERP-software maintenance and support — including tax, legal, and regulatory updates delivered electronically — subject to Colorado sales or use tax?
The Department held that this company’s described ERP maintenance and support charges, including updates, were not subject to Colorado sales or use tax because the true object of its contract was a…
Does a charity owe sales tax on its catering sales and on renting out its facility?
The Department explains the tax rules for catering, charitable occasional sales, and facility rental but makes no specific determination. The occasional-sales exemption requires fundraising purpose,…
Does a restaurant owe sales tax on the trays, platters, and lids it buys and gives customers with food?
It depends on whether the item is essential to handing the food to the customer — and this GIL sets out the test without deciding it. A free article, bag, or container a food vendor gives a customer…
When a buyer pays a separately stated fee for a program that pays a credit toward a replacement vehicle if their car is totaled or stolen, is that fee taxable — and does the credit count in the sales tax on the replacement vehicle?
The separately stated, optional program fee is NOT subject to sales or use tax — it buys an intangible right to future compensation, like an insurance premium, not tangible personal property. The…
For a company selling EV charging stations, must it collect sales tax on (1) the station, (2) an annual network fee, and (3) maintenance contracts?
A general overview, no binding determination. (1) Selling the charging station is a taxable retail sale of tangible personal property (and use tax can apply to its use). (2) The annual network fee…
Does a billing-services company owe Colorado sales tax on the printed bills it produces, or on the separately stated postage it charges to mail them?
No to both. A company that turns clients' raw financial data into printed bills and statements is selling a nontaxable service, not taxable goods — the paper the bills are printed on is incidental…
Is water and ice dispensed from a vending machine — into containers the customer brings — subject to Colorado sales tax, and does it matter that the machine sits just outside a bar?
No, they're exempt. Water dispensed in discrete quantities is tangible personal property (not a utility service), but it's still exempt as 'food': SNAP-eligible non-carbonated water sold from a…
Can a pharmacy buy prescription bottles and labels tax-free — under the medical-materials exemption, or the container/label exemption?
Yes — but through the container exemption, not the medical-materials exemption. A pharmacy CANNOT use the medical-materials exemption, because that requires a 'licensed provider' with authority to…
Does Colorado's $2-per-day vehicle rental fee restart when a short-term rental is terminated and the customer immediately signs a brand-new rental for the same vehicle?
Yes. When the company terminates the first short-term rental and writes a brand-new rental ticket for the next rental (even of the same vehicle), the second rental is a new contract—not a 'renewal'…
When a restaurant buys dressing mix, compounds it into a condiment, and sells it to customers, is the purchase of the mix taxable and the sale of the condiment taxable?
The Department discusses conditional treatment of a restaurant’s compounded condiment. A separately stated price is likely a retail sale, and the food-ingredient exemption may be relevant, but the…
When a company sells and installs a commercial sign, are its separately stated charges for surveying, engineering stamps, and permits included in the sales tax on the sign?
It depends on what the charge is really for. A sign is taxable tangible personal property, and a retailer's costs of bringing goods to market — government permits, engineering drawings,…
Are the parts and the machinery a company buys to build an experimental aircraft prototype for its own research and development exempt from Colorado sales and use tax?
Mostly exempt. The parts a company buys and builds into an experimental aircraft prototype for its own R&D are exempt from Colorado sales and use tax — not under the 'components for resale'…
When a company rents scaffolding and bills extras like sheeting, planks, lighting, delivery, on-site equipment, consumables, and erection labor, which of those charges are included in the Colorado sales tax on the rental?
It depends on the rental's length and how each charge relates to the rental — and this GIL lays out the framework without deciding the specific items. Key points: (1) for rentals of three years or…
Is Colorado's paint stewardship fee on architectural paint part of the taxable purchase price — so that sales tax applies to the fee — and what if the paint sale itself is exempt?
Yes — and an amended clarification. Colorado's paint stewardship fee on architectural paint is included in the purchase price, so sales tax is calculated on the fee too. Sales tax is figured on the…
Over how many years can a taxpayer claim the refundable enterprise-zone renewable energy investment tax credit, and how much per year?
The taxpayer may take the enterprise-zone renewable energy investment tax credit as a cash refund instead of a credit, but only by reducing the credit by 20% (so the refund equals 80% of the credit)…
Does a church have to collect Colorado sales tax on prepared meals and prepackaged food it sells to members, or can those sales be exempt as occasional sales?
Generally taxable, unless they qualify as 'occasional sales.' Sales by a church or other charitable organization are subject to Colorado sales tax, but are exempt as occasional sales if ALL three…
Are aircraft parts that are permanently affixed to an aircraft exempt from Colorado sales and use tax even when the aircraft is NOT used in interstate commerce by a commercial airline?
Yes. Tangible personal property permanently affixed as a component part of an aircraft is exempt from Colorado sales and use tax, and — unlike the exemption for the sale of the aircraft itself —…
Is prescription pet food exempt from Colorado sales tax — and does it matter whether you buy it from your veterinarian or from a pet store?
It depends on where you buy it. Pet food is NOT a 'prescription drug' (food is excluded from the drug definition), so it can't be exempt on that basis. But prescription pet food can qualify for the…
When a customer gets a rebate from a manufacturer, utility, or government, is Colorado sales tax calculated on the full price or the price after the rebate?
On the full price, before the rebate. Manufacturer rebates are included in the Colorado sales tax base because a third party reimburses the retailer for that portion of the price, so tax is figured…
When a company sells custom signage to Colorado customers, are its separately stated charges for delivery and installation subject to Colorado sales or use tax?
The Department discusses conditions under which separately stated and separable delivery or installation charges may be excluded from the taxable price, but makes no specific determination. Its…
Is a company's monthly 'subscription' charge for energy-saving technology it owns and installs at the customer's site a nontaxable service, or a taxable rental of tangible personal property?
It depends — and this GIL does NOT decide it. The question is whether a monthly charge for company-owned energy-saving technology installed at the customer's site is a nontaxable service or a…
For a subscription-box seller that doesn't collect Colorado tax: does each automatic monthly shipment need its own Transactional Notice, and what notices are owed when an out-of-state buyer ships the box to a Colorado resident?
Two answers. (1) No — for an auto-renewing subscription, a Transactional Notice is required only when the customer subscribes, enrolls, or renews; separate notices are NOT required for the repeated…
Is a corporation's gain from selling its LLC interest business income, and is that gain (or the LLC's sales) included in the Colorado apportionment factor?
On these facts: (1) the gain is business income, because the corporation's LLC interest was intangible property used in its trade or business (and a corporation can elect to treat all income as…
Are the materials and components of orthodontic braces subject to Colorado sales tax?
The Department gives general, conditional rules for orthodontic materials furnished to patients, bought for resale, or consumed by providers. It does not determine that braces, brackets, or another…
Does a retailer owe sales or use tax on cooperative direct-mail advertising materials produced and mailed by a third-party advertiser?
The Department held that this retailer owed no Colorado sales or use tax under two specified cooperative direct-mail contracts. Its analysis discusses a former pre-2010 statutory exclusion; it…
Is a lessee's payment to a rental company for lost or damaged rental equipment subject to Colorado sales or use tax?
No. When a customer pays a rental company for equipment that is lost or damaged beyond repair, that payment is not subject to Colorado sales or use tax. It's compensation for the lost value of the…
Are sales and leases of timber-harvesting (silviculture) equipment exempt from Colorado sales tax as farm equipment?
Likely yes. Timber-harvesting equipment (fellers, skidders, etc.) bought after 2013 and valued by the county assessor as silvicultural personal property likely qualifies for Colorado's…
Must a seller collect Colorado sales tax on erosion-control logs and silt fencing sold to contractors who present a contractor's exemption certificate?
Yes — the seller must collect tax. Excelsior (wood-fiber) erosion-control logs and silt fencing sold to construction contractors are NOT 'construction and building materials,' so the public-works…
Is a separately stated 'core charge' on a recyclable automotive part subject to Colorado sales tax?
Yes. A 'core charge' — the separately stated, refundable amount on a recyclable/remanufacturable auto part — is part of the part's purchase price, so sales tax applies even though it's separately…
Does the manufacturing-machinery exemption apply to a contract manufacturer that doesn't own or sell the finished product?
Likely yes. Colorado's exemption for manufacturing machinery and machine tools applies even when the manufacturer doesn't sell the finished product — including contract manufacturers who process a…
How do Colorado sales and use taxes apply to selling, renting, installing, and monitoring security and surveillance systems?
Security equipment (cameras, surveillance, alarms) is taxable tangible personal property; bundled services like installation, monitoring, and shipping are excluded only if they're optional AND…
Are non-customized digital market reports subject to Colorado sales tax as tangible personal property?
Yes, likely taxable. Colorado treats digital goods as tangible personal property, and a market report that is NOT customized for a particular customer is the sale of goods, not a nontaxable service…
Which of a software company's products and services — licenses, SaaS, support, training, hardware — are subject to Colorado sales tax?
Mostly not taxable, with hardware the main exception. Electronically delivered software, SaaS/hosting, accounting, conversion, training, consulting, and travel reimbursements are not subject to…
Are membership fees and golf-bay play charges at a golf-entertainment venue subject to Colorado sales tax?
No. At a golf-entertainment venue, the membership fees, the charges to play in the golf bays, and the line-skip passes are all nontaxable services, not taxable rentals of tangible personal property.…
Does Colorado sales or use tax apply to charging third parties for non-transplantable human tissue?
Yes. Charging third parties for non-transplantable human tissue is a taxable sale of tangible personal property in Colorado, not a tax-free service. Human tissue is corporeal property; the labor to…
Does Colorado sales or use tax apply to leasing space on a telecommunications tower?
Yes. Leasing space on a telecommunications tower is subject to Colorado state (and state-administered local) sales and use tax. The Department treats the towers as tangible personal property — not…
Browse Colorado rulings by topic
These are official tax letter rulings and advisory opinions issued by Colorado's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.