(1) There is levied and
there shall be collected and paid a tax in the amount stated in section 39-26-106 as
follows:
(a) On the purchase price paid or charged upon all sales and purchases of
tangible personal property at retail, including, but not limited to, the amount
charged for mainframe computer access, photocopying, and packing and crating;
(b) (I) In the case of retail sales involving the exchange of property, on the
purchase price paid or charged, including the fair market value of the property
exchanged at the time and place of the exchange, excluding, however, from the
consideration or purchase price, the fair market value of the exchanged property if:
(A) Such exchanged property is to be sold thereafter in the usual course of
the retailer's business; or
(B) Such exchanged property is a vehicle and is exchanged for another
vehicle and both vehicles are subject to licensing, registration, or certification
under the laws of this state, including, but not limited to, vehicles operating upon
public highways, off-highway recreation vehicles, watercraft, and aircraft.
(II) The exchange of three or more vehicles of the same type by any person in
any calendar year in transactions subject to the provisions of this article shall be
prima facie evidence that such person is engaged in the business of selling vehicles
of the type involved in such transactions and that he is thereby subject to any
licensing requirements necessary to engage in such activity.
(c) (I) Upon telephone and telegraph services, whether furnished by public or
private corporations or enterprises for all intrastate telephone and telegraph
service. On or after August 1, 2002, mobile telecommunications service shall be
subject to the tax imposed by this section only if the service is provided to a
customer whose place of primary use is within Colorado and the service originates
and terminates within the same state. In accordance with the Mobile
Telecommunications Sourcing Act, 4 U.S.C. secs. 116 to 126, as amended, on or
after August 1, 2002, mobile telecommunications service provided to a customer
whose place of primary use is outside the borders of the state of Colorado is
exempt from the tax imposed by this section.
(II) (A) If a customer believes that a tax, charge, or fee assessed by the state
in the customer's bill for a mobile telecommunications service is erroneous, or that
an assignment of place of primary use or taxing jurisdiction on said bill is incorrect,
the customer shall notify the home service provider in writing within two years after
the date the bill was issued. The notification from the customer shall include the
street address for the customer's place of primary use, the account name and
number for which the customer seeks a correction, a description of the alleged
error, and any other information that the home service provider may require.
(B) No later than sixty days after receipt of notice from a customer pursuant
to sub-subparagraph (A) of this subparagraph (II), the home service provider shall
review the information submitted by the customer and any other relevant
information and documentation to determine whether an error was made. If the
home service provider determines that an error was made, the home service
provider shall refund or credit to the customer any tax, fee, or charge erroneously
collected from the customer for a period not to exceed two years. If the home
service provider determines that no error was made, the home service provider shall
provide a written explanation of its determination to the customer.
(C) Any customer that believes a tax, charge, or fee assessed by the state in
the customer's bill for mobile telecommunications services is erroneous, or that an
assignment of place of primary use or taxing jurisdiction on said bill is incorrect,
may file a claim in the appropriate district court only after complying with the
provisions of this subparagraph (II).
(III) As used in this paragraph (c), unless the context otherwise requires:
(A) Act means the federal Mobile Telecommunications Sourcing Act, 4
U.S.C. secs. 116 to 126, as amended.
(B) Customer means customer as defined in section 124 (2) of the act.
(C) Home service provider means home service provider as defined in
section 124 (5) of the act.
(D) Mobile telecommunications service means mobile telecommunications
service as defined in section 124 (7) of the act.
(E) Place of primary use means the place of primary use as defined in
section 124 (8) of the act.
(F) Taxing jurisdiction means taxing jurisdiction as defined in section 124
(12) of the act.
(IV) For telephone and telegraph services provided on or after July 1, 2003,
when nontaxable services are aggregated with and not separately stated from
taxable services, the provider of such services shall collect the tax imposed by this
article only on intrastate telephone and telegraph services. The provider of such
services shall maintain for three years documentation of the services provided that
are taxable and nontaxable. Such documentation is subject to audit, and the service
provider shall be liable for any uncollected tax. A service provider shall notify the
executive director of the department of revenue of the percentages of taxable and
nontaxable services in a package of aggregated services within thirty days of use
on any invoice.
(c.5) (I) Beginning July 1, 2025, upon telephone and telegraph services,
whether furnished by public or private corporations or enterprises for interstate
telephone and telegraph service, if the telephone and telegraph service originates
or terminates in the state and is charged to a Colorado address.
(II) In accordance with the federal Mobile Telecommunications Sourcing
Act, 4 U.S.C. secs. 116 to 126, as amended, mobile telecommunication service
provided to a customer whose place of primary use is outside of the borders of the
state of Colorado is exempt from the tax imposed by this section.
(III) A taxpayer who pays a tax legally imposed by another state on a
telephone or telegraph service that is taxable pursuant to this subsection (1)(c.5) is
allowed a credit against the tax imposed by this section in an amount equal to the
amount of the tax imposed on a telephone or telegraph service by the other state. A
credit allowed pursuant to this subsection (1)(c.5)(III) shall not exceed the tax
imposed on a telephone or telegraph service pursuant to this section.
(d) Repealed.
(d.1) Effective July 1, 1980, for gas and electric service, whether furnished by
municipal, public, or private corporations or enterprises, for gas and electricity
furnished and sold for commercial consumption and not for resale, upon steam
when consumed or used by the purchaser and not resold in original form whether
furnished or sold by municipal, public, or private corporations or enterprises;
(d.2) Repealed.
(e) Upon the amount paid for food or drink served or furnished in or by
restaurants, cafes, lunch counters, cafeterias, hotels, social clubs, nightclubs,
cabarets, resorts, snack bars, caterers, carryout shops, and other like places of
business at which prepared food or drink is regularly sold, including sales from
pushcarts, motor vehicles, and other mobile facilities. Cover charges shall be
included as part of the amount paid for such food or drink. However, meals provided
to employees of the places mentioned in this paragraph (e) at no charge or at a
reduced charge shall be exempt from taxation under the provisions of this part 1.
(f) On the entire amount charged to any person for rooms or
accommodations as designated in section 39-26-102 (11).
(2) Repealed.
(3) (a) Except as provided in subsections (3)(b) and (3)(c) of this section, for
purposes of determining where a sale of tangible personal property, commodities,
or services is made, the following rules apply:
(I) If tangible personal property, commodities, or services are received by the
purchaser at a business location of the seller, the sale is sourced to that business
location;
(II) If tangible personal property, commodities, or services are not received
by the purchaser at a business location of the seller, the sale is sourced to the
location where receipt by the purchaser occurs, including the location indicated by
instructions for delivery to the purchaser, if that location is known to the seller;
(III) If subsections (3)(a)(I) and (3)(a)(II) of this section do not apply, the sale is
sourced to the location indicated by an address for the purchaser that is available
from the business records of the seller that are maintained in the ordinary course of
the seller's business, when use of this address does not constitute bad faith;
(IV) If subsections (3)(a)(I), (3)(a)(II), and (3)(a)(III) of this section do not apply,
the sale is sourced to the location indicated by an address for the purchaser
obtained during the consummation of the sale, including, if no other address is
available, the address of a purchaser's payment instrument, when use of this
address does not constitute bad faith; or
(V) If subsections (3)(a)(I), (3)(a)(II), (3)(a)(III), and (3)(a)(IV) of this section do
not apply, or if the seller is without sufficient information to apply the rules set
forth in subsections (3)(a)(I), (3)(a)(II), (3)(a)(III), and (3)(a)(IV) of this section, the sale
is sourced to the location indicated by the address from which the tangible personal
property, commodity, or service was shipped.
(b) (I) The lease or rental of tangible personal property or commodities, but
not property identified in subsection (3)(b)(II) or (3)(b)(III) of this section, not leases
or rentals based on a lump sum or accelerated basis, and not on the acquisition of
property for lease, are sourced as follows:
(A) For a lease or rental that requires recurring periodic payments, the first
periodic payment is sourced the same as a retail sale in accordance with subsection
(3)(a) of this section. Periodic payments made subsequent to the first payment are
sourced to the primary property location for each period covered by the payment.
The primary property location is as indicated by an address for the property
provided by the lessee that is available to the lessor from its records maintained in
the ordinary course of business, when use of this address does not constitute bad
faith. The property location is not altered by intermittent use at different locations,
such as use of business property that accompanies employees on business trips
and service calls.
(B) For a lease or rental that does not require periodic payments, the
payment is sourced the same as a retail sale in accordance with subsection (3)(a) of
this section.
(II) The lease or rental of motor vehicles, trailers, semi-trailers, or aircraft
that do not qualify as transportation equipment is sourced as follows:
(A) For a lease or rental that requires recurring periodic payments, each
periodic payment is sourced to the primary property location. The primary property
location is as indicated by an address for the property provided by the lessee that is
available to the lessor from its records maintained in the ordinary course of
business, when use of this address does not constitute bad faith. The location does
not change by intermittent use at different locations.
(B) For a lease or rental that does not require recurring periodic payments,
the payment is sourced the same as a retail sale in accordance with subsection
(3)(a) of this section.
(III) The lease or rental of transportation equipment is sourced in the same
manner as a retail sale in accordance with subsection (3)(a) of this section.
(c) Repealed.
(d) As used in this subsection (3), unless the context otherwise requires:
(I) Purchaser may include a donee who is designated as such by the
purchaser.
(II) Receipt or receive means taking possession of tangible personal
property or commodities or making first use of services, but does not include
possession by a shipping company on behalf of the purchaser.
(III) Transportation equipment means:
(A) Locomotives and railcars that are utilized for the carriage of persons or
property in interstate commerce;
(B) Trucks and truck-tractors with a gross vehicle weight rating of ten
thousand one pounds or greater, trailers, semi-trailers, or passenger buses that are
registered under the international registration plan and operated under authority of
a carrier authorized and certificated by the United States department of
transportation or another federal or foreign authority to engage in the carriage of
persons or property in interstate or foreign commerce;
(C) Aircraft that are operated by air carriers authorized and certificated by
the United States department of transportation or another federal or foreign
authority to engage in the carriage of persons or property in interstate or foreign
commerce; and
(D) Containers designed for use on and component parts attached or secured
on the items set forth in subsections (3)(d)(III)(A) to (3)(d)(III)(C) of this section.