(1) The
following shall be exempt from taxation under the provisions of part 1 of this article
26:
(a) All sales of food purchased with food stamps. For the purposes of this
subsection (1)(a), food has the same meaning as provided in 7 U.S.C. sec. 2012, as
such section exists on October 1, 1987, or is thereafter amended.
(b) All sales of food purchased with funds provided by the special
supplemental food program for women, infants, and children, as provided for in 42
U.S.C. sec. 1786. For the purposes of this paragraph (b), food shall have the same
meaning as provided in 42 U.S.C. sec. 1786, as such section exists on October 1,
1987, or is thereafter amended.
(c) Any sale of any article to a retailer or vendor of food, meals, or beverages,
which article is to be furnished to a consumer or user for use with articles of
tangible personal property purchased at retail, if a separate charge is not made for
the article to the consumer or user, if such article becomes the property of the
consumer or user, together with the food, meals, or beverages purchased, and if a
tax is paid on the retail sale as required by section 39-26-104 (1)(a) or (1)(e); except
that, on or after March 1, 2010, any such article that is nonessential to the consumer
or user, as determined by rules of the department of revenue promulgated in
accordance with article 4 of title 24, C.R.S., shall be subject to state sales taxation;
(d) Any sale of any container or bag to a retailer or vendor of food, meals, or
beverages, which container or bag is to be furnished to a consumer or user for the
purpose of packaging or bagging articles of tangible personal property purchased
at retail, if a separate charge is not made for the container or bag to the consumer
or user, if such container or bag becomes the property of the consumer or user,
together with the food, meals, or beverages purchased, and if a tax is paid on the
retail sale as required by section 39-26-104 (1)(a) or (1)(e); except that, on and after
March 1, 2010, any such container or bag that is nonessential to the consumer or
user, as determined by rules of the department of revenue promulgated in
accordance with article 4 of title 24, C.R.S., shall be subject to state sales taxation;
(e) Commencing January 1, 1980, all sales of food; and
(f) (I) (A) On and after July 1, 2016, all sales of food, food products, snacks,
beverages, and meals provided for consumption by residents on the premises of a
retirement community;
(B) On and after July 1, 2016, all sales to a retirement community of food,
food products, snacks, beverages, and meals for purposes of a sale described in
sub-subparagraph (A) of this subparagraph (I);
(C) On and after July 1, 2016, all sales of any container, bag, or article used by
or furnished to a consumer for the purpose of packaging, bagging, or use with food,
food products, snacks, beverages, and meals provided for consumption by residents
on the premises of a retirement community; and
(D) On and after July 1, 2016, all sales to a retirement community of any
container, bag, or article used by or furnished to a consumer for purposes of a sale
described in sub-subparagraph (A) of this subparagraph (I).
(II) For purposes of this paragraph (f), food includes prepared salads, salad
bars, and packaged and unpackaged cold sandwiches.
(1.5) (a) Notwithstanding the provisions of paragraph (e) of subsection (1) of
this section, on and after May 1, 2010, sales of candy and soft drinks shall be
subject to state sales taxation.
(b) For the purposes of this subsection (1.5):
(I) Candy means a preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruit, nuts, or other ingredients or
flavorings in the form of bars, drops, or pieces. Candy shall not include any
preparation containing flour and shall require no refrigeration.
(II) Soft drinks means nonalcoholic beverages that contain natural or
artificial sweeteners. Soft drinks do not include beverages that contain milk or
milk products, soy, rice, or similar milk substitutes, or greater than fifty percent of
vegetable or fruit juice by volume.
(2) The following shall be exempt from taxation under the provisions of part
2 of this article 26:
(a) Effective January 1, 1980, the storage, use, or consumption of food or
meals that are provided to employees of the places described in section 39-26-104
(1)(e), if such are provided to such employees at no charge or at a reduced charge;
(b) The storage, use, or consumption of any article by a retailer or vendor of
food, meals, or beverages, which article is to be furnished to a consumer or user for
use with articles of tangible personal property purchased at retail, if a separate
charge is not made for the article to the consumer or user, if the article becomes
the property of the consumer or user, together with the food, meals, or beverages
purchased, and if a tax is paid on the retail sale as required by section 39-26-104
(1)(a) or (1)(e); except that, on and after March 1, 2010, any such article stored, used,
or consumed that is nonessential to the end consumer or user, as determined by
rules of the department of revenue promulgated in accordance with article 4 of title
24, C.R.S., shall be subject to state use taxation;
(c) The storage, use, or consumption of any container or bag by a retailer or
vendor of food, meals, or beverages, which container or bag is to be furnished to a
consumer or user for the purpose of packaging or bagging articles of tangible
personal property purchased at retail, if a separate charge is not made for the
container or bag to the consumer or user, if the container or bag becomes the
property of the consumer or user, together with the food, meals, or beverages
purchased, and if a tax is paid on the retail sale as required by section 39-26-104
(1)(a) or (1)(e); except that, on and after March 1, 2010, any such container or bag
stored, used, or consumed that is nonessential to the end consumer or user, as
determined by rules of the department of revenue promulgated in accordance with
article 4 of title 24, C.R.S., shall be subject to state use taxation;
(d) (I) Effective January 1, 1980, the storage, use, or consumption of food as
defined in section 39-26-102 (4.5); except that, on and after May 1, 2010, the
storage, use, or consumption of candy and soft drinks shall be subject to state use
taxation.
(II) For the purposes of this paragraph (d):
(A) Candy means a preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruit, nuts, or other ingredients or
flavorings in the form of bars, drops, or pieces. Candy shall not include any
preparation containing flour and shall require no refrigeration.
(B) Soft drinks means nonalcoholic beverages that contain natural or
artificial sweeteners. Soft drinks do not include beverages that contain milk or
milk products, soy, rice, or similar milk substitutes, or greater than fifty percent of
vegetable or fruit juice by volume.
(e) (I) (A) On and after July 1, 2016, the storage, use, or consumption of food,
food products, snacks, beverages, and meals provided for consumption by residents
on the premises of a retirement community;
(B) On and after July 1, 2016, the storage, use, or consumption by a
retirement community of food, food products, snacks, beverages, and meals for
purposes of a sale described in sub-subparagraph (A) of subparagraph (I) of
paragraph (f) of subsection (1) of this section;
(C) On and after July 1, 2016, the storage, use, or consumption of any
container, bag, or article used by or furnished to a consumer for the purpose of
packaging, bagging, or use with food, food products, snacks, beverages, and meals
provided for consumption by residents on the premises of a retirement community;
and
(D) On and after July 1, 2016, the storage, use, or consumption by a
retirement community of any container, bag, or article used by or furnished to a
consumer for purposes of a sale described in sub-subparagraph (A) of
subparagraph (I) of paragraph (f) of subsection (1) of this section.
(II) For purposes of this paragraph (e), food includes prepared salads, salad
bars, and packaged and unpackaged cold sandwiches.
(f) The storage, use, or consumption of all food purchased with food stamps.
For purposes of this subsection (2)(f), food has the same meaning as provided in 7
U.S.C. sec. 2012, as such section exists on October 1, 1987, or is thereafter
amended.
(g) The storage, use, or consumption of all food purchased with funds
provided by the special supplemental food program for women, infants, and
children, as provided for in 42 U.S.C. sec. 1786. For the purposes of this subsection
(2)(g), food has the same meaning as provided in 42 U.S.C. sec. 1786, as such
section exists on October 1, 1987, or is thereafter amended.
(2.5) For purposes of this section, retirement community means:
(a) An assisted living residence as defined in section 25-27-102 (1.3), C.R.S.;
(b) An independent living facility designed and operated specifically to serve
as the primary residence for persons aged fifty-five or older that provides meals
and other services to residents as part of a comprehensive fee, including a facility
that qualifies as housing for older persons as defined in section 24-34-502 (7)(b)
and a life care institution subject to article 49 of title 11; or
(c) A nursing care facility licensed under the authority of section 25-1.5-103
(1)(a)(I)(A), C.R.S., that provides services to persons who, due to physical condition,
mental condition, or disability, require continuous or regular inpatient nursing care.
(3) The department of revenue may promulgate rules, in accordance with
article 4 of title 24, C.R.S., to provide a means by which a person who sells candy or
soft drinks at retail may, if necessary, reasonably estimate the amount of sales
taxes due on such candy and soft drinks. For any return made prior to August 1,
2010, a person who sells candy or soft drinks at retail shall not be liable for any
interest or other penalty imposed as a result of an error made in connection with
the elimination of the exemption from state sales tax for sales of candy and soft
drinks, as defined in paragraph (b) of subsection (1.5) of this section, by House Bill
10-1191, enacted in 2010.
(4) For any return made prior to June 1, 2010, a person who sells or stores,
uses, or consumes items described in paragraphs (c) and (d) of subsection (1) and
paragraphs (b) and (c) of subsection (2) of this section that are nonessential to the
end consumer or user shall not be liable for any interest or other penalty imposed
as a result of an error made in connection with the elimination of the exemption for
such nonessential items from state sales and use tax by House Bill 10-1194, enacted
in 2010.