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Effective May 23, 2007, the exemption on manufacturing equipment was expanded to include machinery and machine tools, or parts for such machinery, used in the production of electricity from a renewable energy source, including, but not limited to, wind. This exemption applies whether the purchases are capitalized or expensed. The exemption is also applicable to purchases used in the production of electricity in a facility for which a long-term (ten years or more) power purchase agreement was fully executed between February 5, 2001, and November 7, 2006. Other requirements apply. (FYI Sales 10, Colorado Department of Revenue, August 2007).

(01/04/2008)

All sales, storage, and use of machinery, in excess of $500, that comprises a cleanroom used to produce tangible property are exempt from tax. Example of exempt equipment include integrated systems, fixtures, electrical components or any other related apparatus to reduce contamination or control airflow, temperature, humidity, chemical purity, other environmental conditions, or manufacturing tolerances. “Cleanrooms” are defined as an environment with a level of environmental pollutants equal or less than maximum number of particles specified by the International Organization for Standardization. The exemption is effective July 1, 2007 through July 1, 2018. (H.B. 1277, Laws 2007)

(08/22/2007)

Effective May 30, 2006, the Colorado Department of Revenue adopted a new computer software regulation which provides that sales and use tax only applies to computer software purchases meeting the following conditions: prepackaged for repeated sale or license, governed by a tear-open nonnegotiable license agreement, and delivered in a tangible medium. In addition, the regulation stipulates that if a purchaser pays for taxable software with the intent to distribute any portion to locations outside of the state, Colorado tax is due only on the license fees associated with licenses used in Colorado. A written statement must be provided by the purchaser to the vendor confirming to the amount of the license fees for use in Colorado and must list the locations to be outside of Colorado. Once provided with the written statement, vendors are relived from any liability linked with the prorating. Additional rules and definitions are included within the regulation. (Special Regulation 7; 1 CCR 201-5)

(06/25/2006)

The Colorado Department of Revenue concluded that Colorado sales tax must be paid on mandatory delivery charges levied on mail order purchases from companies doing business in Colorado. The Colorado Supreme Court ruled that non-manufacturing services associated with the sale of goods are not subject to tax if they are "separable" from the sale of the goods. One way to determine whether a service is separable is whether the purchaser has the option to decline the service and/or arrange other means of obtaining the service. Thus, unless a customer has a choice in arranging for their own delivery charges, the charges are subject to tax. (Tax Day, May 19, 2005)

(11/21/2005)

Colorado vendors may now rely solely on a database of jurisdictions and tax rates certified and provided by the Department of Revenue for Colorado transactions. A vendor using the department’s database will not be held liable for collection and remittance errors due to incorrect information provided in the department’s database if certain requirements are met. Vendors must accurately update their system when necessary. The state reserves the right to monitor the vendor’s information. The vendor will become liable for improper tax collection and remittance if the vendor’s information is less than 95% accurate compared to the department’s database. (House Bill 04-1237, signed into law May 15, 2004.)

(07/28/2004)

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