Information about the recent activities of the Office of Tax Policy is provided below. This information includes new and revised publications, rulemaking activities, and recently published letter rulings and information letters.
Recently Published Private Letter Rulings (PLR) and General Information Letters (GIL)
- GIL 26-001 – Claiming a Wholesale Exemption Without a Sales Tax License Using the Multistate Tax Commission’s Uniform Sales & Use Tax Resale Certificate – A wholesaler without a state-issued sales tax license or exemption certificate may not use the Multistate Tax Commission’s Uniform Sales & Use Tax Resale Certificate to claim an exemption. Any person operating exclusively as a wholesaler may apply to the Department for a wholesale license in order to use the form. Alternatively, a purchaser without a wholesaler license may complete form DR 5002, Declaration of Wholesale or Entity Sales Tax Exemption to make exempt wholesale purchases.
- GIL 26-002 – Wholesale Sales to Businesses Outside the United States – Wholesale sales are exempt from sales tax, regardless of the purchaser’s location, the shipping terms, and whether the goods are exported.
- GIL 26-004 – Digital Photography Provided via Online Gallery – Special Rule 34.5 addresses photography services and provides that they are not taxable when such service “is specifically bargained for without regard to the tangible personal property involved, and if the value of the service is greater than the [value of the] property transferred. . . .” Accordingly, when the photographs are an expressly bargained‑for component of a photography services transaction, the conditions of Special Rule 34.5 are not met. The grant of a license to use or possess tangible personal property, including a digital photograph, constitutes the transfer of a partial interest in that tangible personal property. Consequently, if the transfer is made in exchange for any consideration, it constitutes a sale under Rule 39-26-102.
New and Revised Publications
- Sales & Use Tax Topics: Motor Vehicle Sales – This publication was revised to reflect the taxability of certain charges and the repeal and subsequent restoration of exemptions for certain low-emitting medium- and heavy-duty trucks by House Bill 24-1036 and Senate Bill 23-230. Content regarding motor vehicle leases was removed from this publication and relocated to the new Department publication Sales & Use Tax Topics: Motor Vehicle Leases.
- Sales & Use Tax Topics: Motor Vehicle Leases – This new publication includes content regarding motor vehicle leases relocated from the existing publication Sales & Use Tax Topics: Motor Vehicle Sales. It also reflects recently adopted sales tax rules regarding leases.
- Sales & Use Tax Topics: Leases – This publication was revised to reflect recently adopted sales tax rules regarding leases.
- Sales & Use Tax Topics: Aircraft – This publication was revised and reorganized for clarity, to include additional information about aircraft relocated to Colorado, and to reflect recently adopted sales tax rules regarding leases.
Rulemaking Announcements
- Motor Vehicle Daily Rental Fees – We recently adopted a new rule regarding the collection, administration, and enforcement of the motor vehicle daily rental fees.
- Tobacco Products and Nicotine Products Taxes – We recently adopted proposed rules regarding tobacco products and nicotine products taxes. These rules define certain terms used in the statutory definition of “manufacturer’s list price” and prescribe the procedure for claiming credit, when permissible, for previously taxed products that are shipped or transported out of state, returned to the manufacturer, or destroyed by the distributor.
- Master Settlement Agreement – We recently adopted proposed rules regarding the Master Settlement Agreement, which repealed several rules, amended one rule, and relocated another rule with amendments.
- Food Exemption – We recently held a workgroup meeting to discuss a draft rule regarding the sale and use tax exemptions for food. The draft rule would repeal and replace the existing rule, provide clarification on the definition of food, and further define terms used in sections 39-26-102(4.5) and 39-26-707, C.R.S.
- Computer Software – We announced a stakeholder workgroup meeting to discuss the development of new rules to implement legislative changes regarding computer software made by House Bill 26-1223.