C.R.S. § 39-26-104 — Property and services taxed - definitions

(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. Source: L. 35: p. 1005, § 4. CSA: C. 144, § 4. L. 37: p. 1081, § 1. L. 41: p. 661, § 4. L. 45: pp. 573, 578, §§ 1, 1. CRS 53: § 138-6-4. L. 59: p. 800, § 2. C.R.S. 1963: § 138-5-4. L. 64: p. 817, § 2. L. 78: (1)(e) amended, p. 512, § 1, effective May 5; (1)(b) amended, p. 508, § 2, effective July 1. L. 79: (1)(d) amended, (1)(d.1) and (1)(d.2) added, and (1)(e) R&RE, pp. 1428, 1440, §§ 7, 25, effective July 3. L. 80: (1)(d.1) and (1)(d.2) amended, p. 733, § 3, effective May 2. L. 82: (1)(d.1) amended and (1)(d.2) repealed, pp. 571, 572, §§ 1, 4, effective April 27. L. 2002: (1)(c) amended, p. 253, § 4, effective April 12. L. 2003: (1)(c)(IV) added, p. 2580, § 1, effective June 5. L. 2009: (1)(e) amended, (SB 09-121), ch. 421, p. 2338, § 1, effective June 4. L. 2012: (1)(e) amended, (SB 12-094), ch. 8, p. 23, § 2, effective July 1. L. 2013: IP(1) amended and (2) added, (HB 13-1295), ch. 314, p. 1647, § 4, effective July 1, 2014. L. 2019: IP(1) amended, (2) repealed, and (3) added, (HB 19-1240), ch. 264, p. 2494, § 3, effective June 1. L. 2021: (3)(c)(III) repealed and (3)(c)(IV) added, (SB 21-282), ch. 394, p. 2619, § 1, effective June 30; (1)(a) amended, (HB 21-1312), ch. 299, p. 1796, § 9, effective July 1. L. 2022: (3)(c)(IV) amended, (HB 22-1027), ch. 1, p. 1, § 1, effective January 31. L. 2025: (1)(c.5) added, (HB 25-1296), ch. 202, p. 917, § 15, effective May 16. Editor's note: (1) Subsection (1)(d) provided for the repeal of subsection (1)(d), effective July 1, 1980. (See L. 79, p. 1440.) (2) Subsection (3)(c)(IV) provided for the repeal of subsection (3)(c), effective October 1, 2022. (See L. 2022, p. 1.) Cross references: (1) For the legislative declaration contained in the 2002 act amending subsection (1)(c), see section 1 of chapter 92, Session Laws of Colorado 2002. (2) For the legislative declaration in the 2013 act amending the introductory portion to subsection (1) and adding subsection (2), see section 1 of chapter 314, Session Laws of Colorado 2013. (3) For the legislative declaration in HB 21-1312, see section 1 of chapter 299, Session Laws of Colorado 2021. (4) For the legislative declaration in HB 25-1296, see section 1 of chapter 202, Session Laws of Colorado 2025.