All State Offices will be closed on Monday, October 2, in observance of Frances Xavier Cabrini Day.


DR 1191 - Sales Tax Exemption on Purchases of Machinery and Machine Tools

Purchases of machinery or machine tools and parts thereof are exempt from state sales and use tax
when the machinery will be used in manufacturing. To qualify the machinery must be:

  • Used in Colorado,
  • Used directly and predominantly to manufacture tangible personal property for sale or profit.
  • Of a nature that would have qualified for the federal investment tax credit under the definition of section 38 property found in the Internal Revenue Code of 1954, as amended. This includes tangible personal property with a useful life of one year or more and limits qualifying purchases of used equipment to a maximum of $150,000 annually,
  • Included on a purchase order or invoice totaling more than $500,
  • Capitalized.

View & Download Form DR 1191