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.
Are a supplier's implementation, web-hosting, management, and payment-processing fees for on-site vending machines taxable as part of the product sales?
Likely taxable — the Department's general view is that these 'service' fees are inseparable from the taxable product sales and ride into the tax base. A supplier of fasteners and industrial goods…
In a Colorado drop-shipment, can the seller accept an out-of-state resale or exemption certificate, whose certificate counts, and what form is used?
Yes — Colorado accepts out-of-state documentation in drop shipments, with conditions. A wholesaler may accept a buyer's sales tax license issued by another state to document a resale exemption…
Are tear/serum osmolarity testing modules exempt from Colorado sales tax as 'blood and urine testing kits and materials'?
No — they're taxable. Colorado exempts the sale of 'blood and urine' testing kits and materials (§ 39-26-717(d)), but the Department concluded that tear/serum osmolarity testing modules (such as…
Can a Colorado special district levy its sales tax on natural gas and electricity that a business buys for industrial/manufacturing use?
The Department explains general state and state-administered local treatment for industrial fuel but makes no specific determination. The company’s claimed 75% electricity and 100% gas exemptions…
Are charges for renting equipment, for the on-site labor of an operator who runs it, and for chemicals used with it subject to Colorado sales or use tax?
It depends on how the deal is structured — and the Department could only give general guidance, not a determination. Colorado taxes the rental of tangible personal property (like motors and…
If a Colorado customer pays sales tax and later provides an exemption certificate, how and when can the seller refund the tax — and can the customer force the seller to do it?
Yes, with limits. A seller that collected Colorado sales tax because the buyer didn't show an exemption certificate at the time of sale may later refund the tax once the buyer provides a valid…
Can a financial institution use an alternative, deposits-based apportionment instead of the financial-institution rule that sources investment income to where decisions are made?
Yes. The financial-institution special regulation (Special Regulation 7A) sources receipts from investment and trading assets to the location of the day-to-day decisions—a cost-of-performance…
Can a Colorado retailer sell items at an even, tax-included price instead of adding sales tax separately at the register?
Generally no — not silently. Colorado law makes it unlawful for a retailer to advertise or hold out that it will absorb the sales tax or won't add it to the selling price, and the regulation…
Can the members of a Colorado LLC claim the Colorado source capital gain subtraction on the gain from selling all the LLC's business assets, mostly goodwill?
No. The members cannot use the Colorado source capital gain subtraction (§ 39-22-518) for gain on the sale of all of the LLC's business assets. The subtraction covers gain on (A) real or tangible…
Is a subscription fee for an online financial newspaper, and for interactive online stock screens and performance ratings, subject to Colorado sales or use tax?
Neither is taxable. The subscription fee for an online version of a daily financial newspaper is NOT subject to Colorado sales or use tax: Colorado excludes qualifying daily 'newspapers' from…
Are Braille devices, electronic magnifiers, adapted phones, and other products that help blind and legally blind people exempt from Colorado sales and use tax?
Probably not exempt, though the Department made no determination. Three Colorado exemptions might seem to apply — optical sales, prosthetic devices, and durable medical equipment — but the optical…
Does a full-service truck wash owe Colorado sales tax on the wash, and use tax on the soaps, wax, water, electricity, gas, and equipment it uses?
The Department gives a conditional true-object analysis for a full-service truck wash but makes no specific determination. If employees operate the equipment, the facts suggest a washing service…
When a company buys parts out of state, has them assembled in Colorado into a finished unit, and then exports that unit out of the country, must it pay Colorado tax on the parts, or are they exempt wholesale purchases?
The parts are likely exempt as components of a manufactured product, though the Department made no determination. Colorado exempts tangible personal property bought by a manufacturer that becomes an…
Does an out-of-state company that occasionally sends tutors to teach a corporate training course in Colorado owe Colorado sales tax or income tax?
Generally no sales tax on the teaching itself, but watch the materials and income tax. Colorado treats education and training as nontaxable services, so charges for instruction aren't subject to…
Does Colorado sales or use tax apply when a company leases a passenger car for more than 24 months to someone who lives outside Colorado?
Generally no. If the lessee is a Colorado nonresident when the lease is signed and immediately takes the car to another state to register and use it, the lease is exempt from Colorado sales and use…
When a company rents out equipment and also bills customers for reimbursable expenses like lodging, airfare, and car rentals for its on-site staff, are those reimbursed expenses subject to Colorado sales tax?
It depends on separability and the true object — the Department made no determination. When a company both rents taxable equipment (two-way radios) and provides non-taxable services (sending staff…
Is a prescribed cold-therapy band/cuff that wraps around the body and is connected to a cooling device exempt from Colorado sales tax as durable medical equipment?
Maybe, but the Department wouldn't decide. A prescribed cold-therapy band — wrapped around an injured area and connected to a separate cooling device, used in orthopedic-surgery recovery — could be…
Are welding gases (acetylene, oxygen, argon, CO2) and welding equipment, attachments, and tools exempt from Colorado sales tax when sold to a manufacturer whose welding is part of its manufacturing process?
Mostly taxable, with one exemption. ACETYLENE used in a manufacturing or cutting process is EXEMPT from Colorado state sales tax as an industrial fuel ('gas') because it is an energy source — though…
Is a prescription bone-repair material sold to hospitals and surgery centers exempt from Colorado sales tax?
Yes, when a licensed provider furnishes the material to a patient as part of professional care and it leaves with the patient. The product did not meet the separate durable-medical-equipment test,…
Are separately billed mailroom, help-desk, maintenance, secretarial, delivery, and cleaning services taxable with a copy center?
No, for the six optional and separately charged services on these facts. The company owed tax on property it used to provide them, and separately sold materials could be taxable. The Department did…
Are separately stated transportation/delivery charges subject to Colorado sales tax, including in a drop-shipment where goods ship directly from the manufacturer to the customer?
It depends on separability. Transportation of goods between a retailer and a buyer is presumptively a NON-TAXABLE service, but a delivery charge is excluded from sales tax only if it is BOTH (1)…
Is the product delivered by an Application Service Provider (ASP) — such as an electronic sales-tax-rate lookup accessed over the internet — subject to Colorado sales and use tax?
Generally not taxable software, but the Department didn't decide this specific product. Colorado taxes tangible personal property, and effective July 1, 2012, computer software is taxable only if it…
When a steel fabricator does internal fabrication work, or buys fabrication services from a third party, are those labor costs subject to Colorado sales and use tax?
It depends on who fabricates, who supplies the materials, and what happens to the goods. Colorado taxes the FULL purchase price of articles made to order, INCLUDING the fabrication labor, even if…
Is a custom 'bio-engineered' orthotic shoe insert exempt from Colorado sales and use tax as a prosthetic device or durable medical equipment?
The Department does not determine whether the described custom orthotic is exempt. It discusses the prosthetic-device and durable-medical-equipment rules, including their stated requirements, and…
Is a pharmacy's charge for a pharmacist's comprehensive review of a patient's medication records subject to Colorado sales tax, even though the patient may receive a printed report or medication chart?
Likely not taxable. A pharmacist's comprehensive medication-record review and face-to-face consultation looks like a non-taxable professional SERVICE — like advice from a doctor or accountant — even…
Can a manufacturer claim a Colorado sales/use tax exemption on coal and shredded tires that serve as both kiln fuel and as a chemical ingredient in the finished product?
Partly exempt. A manufacturer may exempt the portion of its coal and shredded-tire purchases that becomes a component of its product — silica and alumina from coal ash, and iron from the tires'…
Are the components of a leased residential rooftop solar photovoltaic system exempt from Colorado sales and use tax under the renewable-energy components exemption?
Mostly exempt. The components of a leased residential solar photovoltaic system — modules, racks, inverter, wiring — are exempt from Colorado state and state-administered local sales and use tax…
Are complete-nutrition and specialized nutritional shakes exempt from Colorado sales tax as 'food,' or taxable as dietary supplements?
They're exempt food. Four nutritional shakes — a complete-nutrition shake, a specialized-nutrition shake, a diabetic shake, and a post-workout shake — all qualify as exempt 'food' because each…
Is a web-based subscription service for sending, receiving, and tracking large digital files subject to Colorado sales or use tax, or is it a non-taxable service?
The Department held that this company’s described web-based file-transfer subscription was a nontaxable service on its stated facts. It did not set a general rule for all SaaS or hosted software; no…
When a vehicle lease has an end-of-lease 'true-up' payment between the leasing company and the customer, how is Colorado state and local sales/use tax adjusted, refunded, or collected?
Treat the true-up as an adjustment to the earlier lease payments. Because the lease agreement says the payments are only estimates to be finalized when the vehicle is sold at lease-end, the true-up…
How does Colorado tax monthly newspapers and electronically delivered newspapers and magazines?
Monthly newspapers that do not qualify as Colorado legal publications are subject to sales and use tax, including when delivered electronically. Electronically delivered magazines are also taxable.…
As an out-of-state lessor of equipment used in Colorado, do I collect from lessees both the sales tax I paid when I bought the property and use tax on their lease payments?
No — you choose one method, not both. For a true lease of 36 months or less, the default is the lessor pays sales/use tax up front when it buys the property and does NOT collect tax from lessees (it…
Does Colorado sales or use tax apply to an advertising agency's separately stated charges for direct-mail materials and mailing fulfillment when the materials are printed in Colorado but mailed to recipients outside the state?
No. An advertising agency's separately stated charge for direct-mail advertising materials — printed in Colorado but mailed to the client's potential customers located outside Colorado — is not…
Is a prescribed, at-home ophthalmic monitoring device — and the monitoring, data-processing, and call-center services that go with it — subject to Colorado sales tax?
No on both. A prescribed ophthalmic device a patient uses at home to monitor for eye disease appears to qualify as exempt durable medical equipment (it withstands repeated use, serves a medical…
Is liquor-filled candy exempt from Colorado sales tax as food, or is it taxable?
It's taxable. Liquor-filled candy does not qualify as 'food' under the federal SNAP and WIC definitions that Colorado uses for its food exemption, so it's subject to Colorado state sales and use tax…
Is an authentication service that provides a digital certificate subject to Colorado sales or use tax?
No. Colorado PLR 11-003 concluded that the true object of an authentication solution was a nontaxable service. The digital certificate did not contain binary programming code and was not taxable…
Are inbound freight-in charges taxable when a distributor buys goods for resale?
Yes. Colorado GIL 11-007 says freight-in charges incurred to move goods from the producer or manufacturer to the seller are not exempt transportation charges and are subject to Colorado sales or use…
When a customer uses a coupon, does Colorado sales tax apply to the price before or after the coupon — and does it matter whether it's a manufacturer's or a store coupon?
It depends on who funds the coupon. A manufacturer's coupon doesn't reduce the Colorado sales tax base — because the manufacturer reimburses the retailer for that part of the price, tax is…
Are prescribed insulin infusion pumps and related disposable supplies exempt from Colorado sales tax?
Yes, on the facts described. Colorado GIL 11-005 says an insulin infusion pump and related disposable supplies appear to qualify as exempt insulin measuring and injecting devices because the pump…
When must a Colorado auctioneer collect sales tax on items it sells (including motor vehicles), and when is the owner responsible instead?
The auctioneer usually must collect. A Colorado auctioneer selling goods on an owner's behalf is treated as the retailer and must collect and remit sales tax — unless one of two exceptions applies:…
Is an auctioneer's separately stated administrative fee (buyer's premium) subject to Colorado sales tax, or is it a non-taxable service charge?
It's taxable. An auctioneer's administrative fee or buyer's premium — even when stated separately on the invoice — is included in the Colorado sales tax base, because the fee is generally not…
If my equipment lease requires me to reimburse the lessor for the personal property tax on the equipment, is that reimbursement subject to Colorado sales tax — even when it's billed separately?
Yes. When a lease requires the lessee to reimburse the lessor for the personal property tax on the leased equipment, that reimbursement is a taxable 'lease payment' and is included in the Colorado…
Must a Colorado combined report include both financial-institution and non-financial affiliates, and how is the group's income calculated when the two use different apportionment rules?
Both, by subgroup. A Colorado combined report must include affiliated financial institutions and non-financial corporations that meet the three-of-six combination criteria in § 39-22-303(11)(a) —…
On a layaway or partial-payment plan, when is Colorado sales tax due — as each installment is paid, or only when the customer finishes paying and takes the item?
Sales tax is due only at the final payment. Because Colorado taxes a 'sale' — the transfer of title or possession of goods — and on both layaway and partial-payment plans the store keeps title and…
Must a printer charge Colorado sales tax to print a bi-weekly newspaper that the owner distributes free to the public?
Yes. A bi-weekly newspaper does not qualify as a tax-exempt 'legal publication' under § 24-70-102 (that exemption is keyed to publishing frequency, such as daily), so it is taxable tangible personal…
Does a contractor owe Colorado use tax on goods it tests in Colorado before reselling them, and on materials it builds into products it manufactures partly in Colorado and finishes out of state?
The addressed contractor owed no use tax on its described short compliance testing before resale and no sales or use tax on the described materials integrated into products manufactured across state…
Does a church's conversion from an unincorporated nonprofit association to a corporation sole create Colorado sales or use tax liability on the personal property it already owns?
No tax. A church's conversion from an unincorporated nonprofit association to a corporation sole does NOT create Colorado sales or use tax liability on the personal property it owns. Even assuming…
Is a single-use medical catheter exempt from Colorado sales and use tax when the manufacturer sells it to a healthcare provider who uses it on a patient?
Taxable. A single-use catheter that a healthcare provider buys from the manufacturer and uses to treat a patient is NOT exempt from Colorado sales or use tax. The therapeutic-device exemption only…
When a food-service company prepares patient meals for a for-profit hospital, is sales tax due on the whole charge — including the labor and management fee — or only on the food?
On the whole charge tied to the meals. A food-service company that prepares patient meals for a for-profit hospital is treated as a caterer selling prepared meals, so it must collect Colorado sales…
Are a supplier's transportation/delivery charges included in Colorado sales or use tax on the goods — and does billing freight on a separate invoice change the answer?
Generally not taxable, and a separate freight invoice is fine. A supplier's transportation charge is excluded from Colorado sales/use tax when it's separable (the buyer could use its own or another…
Which Colorado charges for beverage gases, storage tanks, and related fees were taxable in PLR 10-001?
CO₂ used to carbonate retail beverages was exempt as an ingredient; pure nitrogen and the described CO₂–nitrogen mixture were taxable. Rentals of bulk tanks and cylinders for storage were taxable.…
Is an injectable dermal filler used to smooth smile lines exempt from Colorado sales and use tax?
Yes—but on a narrow ground. In this amended letter (which reversed the Department's original 2008 conclusion that the product was taxable), the Department held the injectable dermal filler is EXEMPT…
Are optional, separately stated charges for a rental car company's prepaid-toll, roadside-assistance, and carbon-offset programs subject to Colorado sales or use tax?
Not taxable. A rental car company's optional, separately stated charges for prepaid-toll, roadside-assistance, and carbon-offset programs are NOT subject to Colorado sales or use tax. Each is a…
Are over-the-counter retail sales of propane and firewood subject to Colorado sales and use tax?
Exempt for residential use, but presumed taxable. Propane and firewood sold to residents to heat/power their homes are exempt from Colorado sales/use tax (a non-commercial RV counts as a…
May a retailer calculate Colorado sales tax by multiplying the sale by the tax rate percentage instead of using sales tax charts?
Yes—compute by percentage. A retailer may (and should) calculate Colorado sales tax by multiplying the taxable sales amount by the tax rate (the state rate is currently 2.9%); the Department does…
Are sales of dietary supplements subject to Colorado sales tax, or do they qualify for the food exemption?
Taxable. Dietary supplements are subject to Colorado sales tax—they don't qualify as exempt 'food.' Colorado exempts food for home consumption only if it meets the federal SNAP/Food Stamp definition…
Does a 'third-party intermediary' that arranges and marks up repair/maintenance work for retailers have Colorado sales tax liability on its markup?
Undetermined—the Department declined to decide. A company acts as a 'third-party intermediary': retailers call it for repair/maintenance work, it hires a local contractor, pays the contractor…
When are medical supplies and equipment exempt from Colorado sales and use tax?
Usually, medical supplies furnished by a doctor as part of professional services, or supplies that leave the doctor’s office with the patient, are generally exempt. Equipment used to treat a patient…
Does an out-of-state manufacturer that stores inventory in a Colorado warehouse have Colorado income-tax nexus, or is it protected by Public Law 86-272?
The GIL does not make a specific nexus determination. It discusses the Department’s general view that maintaining a warehouse or inventory in Colorado exceeds Public Law 86-272’s protection and can…
What did Colorado tell a hydraulic fracturing company to collect while the Noble Energy sales-tax appeal was pending in 2009?
Pending the appeal, the Department advised the company to pay state use tax on fracturing materials, recover that cost through a surcharge if desired, and continue collecting the cited county sales…
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.