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 charge for designing, printing, and distributing door-hanger marketing materials subject to Colorado sales tax?
Largely yes. A company that designs, prints, and distributes door-hanger marketing material is selling tangible goods — the printed material is the 'true object' — so a lump-sum charge is taxable. Eve…
Is a fleet repairer's 'management fee' — charged for online access to its maintenance database/reports — subject to Colorado sales tax, and does it matter that the fee is separately stated from parts and labor?
It turns on whether the fee is optional. A fleet maintenance company's 'management fee' gives clients online access to its maintenance database — application service provider (ASP) software, which Col…
Does Colorado sales tax apply to charges for a live web seminar, a pre-recorded webinar, and a self-study course delivered over the web?
It splits three ways by how 'live' the instruction is. A charge to attend a LIVE web seminar is NOT taxable — it's a service, because a live instructor is providing educational services. A charge to w…
Is a digital copier's 'per-click' maintenance charge — which bundles labor with toner and staples and is priced by pages printed — subject to Colorado sales tax when the customer uses the copier to make printed items it then resells?
Not on these facts. A copier 'per-click' fee that bundles maintenance labor with consumables (toner and staples) is not subject to Colorado sales tax when the customer uses the copier to make printed …
Are e-books, self-study online courses, and instructor-critiqued virtual lessons subject to Colorado sales tax?
It splits three ways. E-books are taxable digital goods (tangible personal property you can download and print). Self-study online courses — written material and videos with no instructor interaction …
Is a hotel's mandatory amenity fee taxable, and who collects the tax when a middleman arranges the amenities?
Yes, the guest's amenity fee is taxable — but only at the hotel level. Because the fee is mandatory and built into the room price (the true object is the room), the whole lodging charge is taxable, an…
Are outsourced paper and electronic billing services subject to Colorado sales tax, even though a paper bill changes hands?
No. Outsourced paper and electronic billing services are a nontaxable service in Colorado, and the paper bill that changes hands is just an incidental transfer of property tied to that service — so th…
Is a company that maintains a Material Safety Data Sheet (MSDS) database and prepares regulatory compliance reports, permits, and transport documents making taxable sales of tangible personal property, or providing nontaxable services?
The Department couldn't decide. A digital Material Safety Data Sheet (MSDS) is tangible personal property — like a digital reference manual — and is taxable if the customer is really just buying acces…
Was a monthly server-support/maintenance fee covering free Microsoft patches and upgrades taxable under Colorado's 2010–2012 software rules?
Probably not taxable — though the Department gave only general guidance. The question covered the window from March 1, 2010 to June 30, 2012, when 'standardized' (prewritten) software was taxable no m…
Are charges for renting equipment, for the on-site labor of an operator who runs it, and for chemicals used with it subject to Colorado sales or use tax?
It depends on how the deal is structured — and the Department could only give general guidance, not a determination. Colorado taxes the rental of tangible personal property (like motors and tooling), …
Is a subscription fee for an online financial newspaper, and for interactive online stock screens and performance ratings, subject to Colorado sales or use tax?
Neither is taxable. The subscription fee for an online version of a daily financial newspaper is NOT subject to Colorado sales or use tax: Colorado excludes qualifying daily 'newspapers' from taxable …
Does a full-service truck wash owe Colorado sales tax on the wash, and use tax on the soaps, wax, water, electricity, gas, and equipment it uses?
Likely a non-taxable service — but with use tax on the supplies. A full-service wash where the company's own employees run the equipment is treated as a non-taxable service, not a taxable equipment re…
When a company rents out equipment and also bills customers for reimbursable expenses like lodging, airfare, and car rentals for its on-site staff, are those reimbursed expenses subject to Colorado sales tax?
It depends on separability and the true object — the Department made no determination. When a company both rents taxable equipment (two-way radios) and provides non-taxable services (sending staff to …
Is a pharmacy's charge for a pharmacist's comprehensive review of a patient's medication records subject to Colorado sales tax, even though the patient may receive a printed report or medication chart?
Likely not taxable. A pharmacist's comprehensive medication-record review and face-to-face consultation looks like a non-taxable professional SERVICE — like advice from a doctor or accountant — even i…
Is a web-based subscription service for sending, receiving, and tracking large digital files subject to Colorado sales or use tax, or is it a non-taxable service?
It's a non-taxable service. A web-based subscription for sending, receiving, and tracking large digital files is a service — not a rental of software or servers — so it is not subject to Colorado sale…
Is an auctioneer's separately stated administrative fee (buyer's premium) subject to Colorado sales tax, or is it a non-taxable service charge?
It's taxable. An auctioneer's administrative fee or buyer's premium — even when stated separately on the invoice — is included in the Colorado sales tax base, because the fee is generally not optional…
Is a single-use medical catheter exempt from Colorado sales and use tax when the manufacturer sells it to a healthcare provider who uses it on a patient?
Taxable. A single-use catheter that a healthcare provider buys from the manufacturer and uses to treat a patient is NOT exempt from Colorado sales or use tax. The therapeutic-device exemption only app…
When a food-service company prepares patient meals for a for-profit hospital, is sales tax due on the whole charge — including the labor and management fee — or only on the food?
On the whole charge tied to the meals. A food-service company that prepares patient meals for a for-profit hospital is treated as a caterer selling prepared meals, so it must collect Colorado sales ta…
Are a supplier's transportation/delivery charges included in Colorado sales or use tax on the goods — and does billing freight on a separate invoice change the answer?
Generally not taxable, and a separate freight invoice is fine. A supplier's transportation charge is excluded from Colorado sales/use tax when it's separable (the buyer could use its own or another ca…
Are optional, separately stated charges for a rental car company's prepaid-toll, roadside-assistance, and carbon-offset programs subject to Colorado sales or use tax?
Not taxable. A rental car company's optional, separately stated charges for prepaid-toll, roadside-assistance, and carbon-offset programs are NOT subject to Colorado sales or use tax. Each is a servic…
Are a company's print-and-mail service and its electronic data services (file transfer, address correction, database search) subject to Colorado sales tax?
Mostly non-taxable services, but the Department made no specific determination. A company's electronic data services—automated file transfers (VPN/SSL), USPS address corrections, and database-search/u…
When a contractor incorporates its own materials into Colorado real property, is the fee paid to a third-party fabricator excluded from the use tax on those materials?
It depends on whether the fabricator also sold the materials. A contractor that buys materials out of state and incorporates them into Colorado real property is the consumer and owes use tax on its ac…
Are the fees a company charges dentists for a turnkey patient-rewards program (including the mailers it sends to patients) subject to Colorado sales or use tax?
The Department gave the framework rather than a firm answer. Colorado taxes tangible personal property and only a limited number of services; when the TRUE OBJECT of a transaction is a service, it isn…
Are optional, separately stated clothing alterations (hemming, shortening, taking in) ordered at the time you buy the garment subject to Colorado sales tax?
No. Optional, separately stated alteration services—shortening, hemming, taking in—that a customer orders from the retailer at the time of buying the clothing are NOT subject to Colorado sales or use …
Does a distance-learning company have to charge Colorado sales tax on the printed course materials (binders) it ships to students, or is it a nontaxable service?
They're taxable. The Department concluded that this distance-learning program is more like a home-study course than a traditional school: the true object of the transaction is the printed materials (t…
Does a company owe sales tax when it has customers' VHS tapes converted to DVD by a third party and hands over the DVD for a fee—and can it buy the conversion from the third party tax-free?
Yes, the sale to the customer is taxable, and the company should buy the conversion tax-free for resale. There are two sales: the third party's sale of the finished DVD to the company is an exempt who…
Is market/consumer research delivered on paper or CD a taxable product or a nontaxable service in Colorado?
It depends on custom vs. repetitive. Under the 'true object' test, market or consumer research created for a single specific client is a nontaxable service, with the paper or CD treated as incidental …
Can a retailer buy bulk gift-card stock tax-free as a sale for resale, and is a transaction-tracking service bundled with the cards taxable?
No resale exemption. A gift card is functionally a credit voucher, not something the retailer actually sells to the customer (there's no separate charge for the card itself), so a retailer's bulk purc…
Is crime-scene / biohazard property remediation (chemical wipe-downs, flooring removal, odor thermo-fogging) a taxable sale of property or a nontaxable service in Colorado?
It's a nontaxable service. Under Colorado's 'true object' test, crime-scene and biohazard remediation (chemical wipe-downs, removing flooring, thermo-fogging out odors) is primarily a service, not a s…
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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.