(1) (a) Every vendor selling
individual items of personal property through vending machines shall pay a sales
tax pursuant to section 39-26-106 (2)(b) on the personal property sold in excess of
fifteen cents through the vending machines unless the sale is otherwise exempt
under the provisions of this part 7.
(b) To be eligible for the exemption provided for in this subsection (1), each
vendor shall:
(I) Be licensed under section 39-26-103;
(II) Maintain a record of the identification number, ownership, location, and
disposition of every vending machine used by the vendor in his or her operation as a
vendor;
(III) Within sixty days after commencing business as such vendor, submit to
the department of revenue an accurate list containing the information required
under subparagraph (II) of this paragraph (b) and submit such list annually
thereafter on January 1, commencing in 1971;
(IV) Make application to the department of revenue for identification
numbers to be affixed to every such vending machine, in accordance with rules
promulgated by the executive director of the department of revenue;
(V) Remit a fee of ten cents per machine with the application submitted
under subparagraph (IV) of this paragraph (b), to defray the expenses of the
department of revenue in furnishing the identification numbers; except that the
executive director of the department of revenue by rule or as otherwise provided by
law may reduce the amount of the fee if necessary pursuant to section 24-75-402
(3), C.R.S., to reduce the uncommitted reserves of the fund to which all or any
portion of the fee is credited. After the uncommitted reserves of the fund are
sufficiently reduced, the executive director by rule or as otherwise provided by law
may increase the amount of the fee as provided in section 24-75-402 (4), C.R.S.
(c) Any unregistered vending machine found being used for retail sales at
any place in this state without the prescribed identification number affixed thereto
may be seized without warrant by the department of revenue, its agents, or
employees or by any peace officer when directed or requested by the department.
At the time of seizure, written notice of seizure shall be given to the proprietor or
person in charge of the business, or to the agents or employees of the proprietor or
person in charge of the business, where the vending machine is seized. The
department shall also give notice by first-class mail as set forth in section 39-21-105.5 to the person whose name and mailing address appear on the machine. The
department shall not be required to seize and confiscate any unregistered vending
machine or assess a penalty when there is reason to believe that the owner is not
intentionally evading the tax imposed by this article.
(d) In addition to any other penalty provided by law, the department of
revenue is authorized to assess and collect a penalty of twenty-five dollars for each
unregistered vending machine being operated in this state.
(e) Upon proof of ownership, the department of revenue shall deliver to the
owner any vending machine seized under paragraph (c) of this subsection (1) after
payment of the twenty-five-dollar penalty and seizure costs, if the owner is liable
therefor, and upon registration of the machine. At the expiration of sixty days after
the date of notice, any unregistered vending machine and the contents therein still
in the possession of the department may be sold at public sale to the highest
bidder, but, prior to any such sale, ten days' notice of the sale shall be given by
first-class mail as set forth in section 39-21-105.5 to those entitled to notice under
paragraph (c) of this subsection (1).
(2) On and after January 1, 2000, all sales and purchases of food, as defined
in section 39-26-102 (4.5), by or through vending machines shall be exempt from
taxation under the provisions of part 1 of this article; except that, on and after May
1, 2010, sales and purchases of candy and soft drinks by or through vending
machines shall be subject to state sales taxation. Absent an express provision in
the contract to the contrary, any vending machine contract that references the
price at which products shall be sold from a vending machine shall be interpreted
to include any applicable sales tax as an addition to the referenced price.
(3) On and after January 1, 2000, the storage, use, or consumption of food, as
defined in section 39-26-102 (4.5), purchased by or through vending machines shall
be exempt from taxation under the provisions of part 2 of this article; except that,
on and after May 1, 2010, the storage, use, or consumption of candy and soft drinks
purchased by or through vending machines shall be subject to state use taxation.
(4) For the purposes of this section:
(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.
(5) The department of revenue shall 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 purchased by and through vending machines 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 subsection (4) of this section, by
House Bill 10-1191, enacted in 2010.