Colorado State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Colorado, with full citations and the original source on every page.
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Is a company's monthly 'subscription' charge for energy-saving technology it owns and installs at the customer's site a nontaxable service, or a taxable rental of tangible personal property?
It depends — and this GIL does NOT decide it. The question is whether a monthly charge for company-owned energy-saving technology installed at the customer's site is a nontaxable service or a taxable …
On a long-term motor-vehicle lease, does the lessee owe Colorado sales or use tax on the lessor's monthly charge for an optional, separately stated maintenance agreement?
No. Because the maintenance agreement is optional and separately stated, the lessee does not owe Colorado sales or use tax on the lessor's monthly maintenance charge. Instead, the lessor (or its third…
In a sale-and-leaseback, when do the purchase, the resale to the lessor, and the lease-back get taxed — and does the lease term change the answer?
It depends on the lease term. The lessee's original purchase is a tax-free wholesale (resale) buy only if it really resells to the lessor without using the property first. On the lease-back: if the le…
Does Colorado's low-emitting heavy-vehicle exemption carry through to a long-term lease, and who is the 'dealer' that completes Form DR 1369?
Yes. Because a long-term lease (over three years) is treated as a sale, the low-emitting heavy-vehicle exemption flows through to the lease payments. The 'dealer' for Form DR 1369 is whoever sells or …
When an out-of-state company leases medical equipment to Colorado doctors, dentists, and vets, is sales tax collected up front at the start of the lease or on each rental payment?
When the tax is due depends on the type of lease. Colorado taxes leases of medical equipment — both 'true' leases and 'finance' leases — and the end-of-lease purchase price (nominal or fair-market) is…
Does Colorado sales or use tax apply when a company leases a passenger car for more than 24 months to someone who lives outside Colorado?
Generally no. If the lessee is a Colorado nonresident when the lease is signed and immediately takes the car to another state to register and use it, the lease is exempt from Colorado sales and use ta…
Are the components of a leased residential rooftop solar photovoltaic system exempt from Colorado sales and use tax under the renewable-energy components exemption?
Mostly exempt. The components of a leased residential solar photovoltaic system — modules, racks, inverter, wiring — are exempt from Colorado state and state-administered local sales and use tax under…
When a vehicle lease has an end-of-lease 'true-up' payment between the leasing company and the customer, how is Colorado state and local sales/use tax adjusted, refunded, or collected?
Treat the true-up as an adjustment to the earlier lease payments. Because the lease agreement says the payments are only estimates to be finalized when the vehicle is sold at lease-end, the true-up re…
As an out-of-state lessor of equipment used in Colorado, do I collect from lessees both the sales tax I paid when I bought the property and use tax on their lease payments?
No — you choose one method, not both. For a true lease of 36 months or less, the default is the lessor pays sales/use tax up front when it buys the property and does NOT collect tax from lessees (it c…
If my equipment lease requires me to reimburse the lessor for the personal property tax on the equipment, is that reimbursement subject to Colorado sales tax — even when it's billed separately?
Yes. When a lease requires the lessee to reimburse the lessor for the personal property tax on the leased equipment, that reimbursement is a taxable 'lease payment' and is included in the Colorado sal…
When a company gives a 'free' satellite-TV receiver as an inducement to subscribe to non-taxable TV service, who owes tax on the equipment — and can the company collect it from the customer?
The company owes use tax. When a provider gives a 'free' or credited satellite receiver as an inducement to sign up for non-taxable TV service, it's using its own inventory for marketing — so it owes …
Is a service contract bought together with rented office equipment taxable in Colorado?
It depends on whether it's a separate contract. If the equipment rental and the service contract are one bundled deal, the entire consideration is taxable unless the retailer gets Department permissio…
For short-term rentals of oilfield living quarters, water/sewer systems, generators, transportation, cleaning, and consumables, who owes Colorado tax and on what?
For rentals of three years or less, the lessor is treated as the end user: it owes sales or use tax on what it paid for the equipment (with credit for tax paid another state), rather than charging tax…
Are leases of dark (unlit) fiber-optic cable, and charges for 'lit' fiber, subject to Colorado sales or use tax?
It depends on the fiber. Leasing dark (unlit) fiber-optic cable is a taxable lease of tangible personal property if the cable keeps its identity as property and can be removed without significant dama…
When a leased vehicle is first leased and taxed in another state and then moved to Colorado, does Colorado give the lessee a credit for the tax paid to that other state?
Yes — but only if the other state's tax legally fell on the lessee. When a vehicle is first leased and taxed in another state, then moved to Colorado, the lessee owes Colorado use tax at registration …
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These are official tax letter rulings and advisory opinions issued by Colorado's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.