4800 West 92nd Avenue Westminster, CO 80031

City Government

 

2. Sales And Use Tax

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7/12

CHAPTER 2

SALES AND USE TAX

4-2-1:  LEGISLATIVE INTENT
4-2-2:  WORDS AND PHRASES DEFINED
4-2-3:  RATE; IMPOSITION AND COLLECTION; DISTRIBUTION
4-2-4:  TAX SCHEDULE
4-2-5:  TRANSACTIONS AND ITEMS SUBJECT TO TAX
4-2-6:  EXEMPTIONS FROM SALES TAX
4-2-7:  EXEMPTIONS FROM USE TAX
4-2-8:  SECURED SALES TRANSACTIONS
4-2-9:  PROVISIONS RELATIVE TO BUILDING PERMITS
4-2-10:  COMPUTATION OF USE TAX ON CONSTRUCTION EQUIPMENT
4-2-11:  NONRESIDENT RETAILERS
4-2-12:  INCEPTION OF BUSINESS; INITIAL USE TAX
4-2-13:  USE TAX; METHOD OF PAYMENT
4-2-14:  INTERCITY CLAIMS FOR RECOVERY
4-2-15:  NOTICE OF SALES AND USE TAX ORDINANCE AMENDMENTS
4-2-16:  PARTICIPATION IN SIMPLIFICATION MEETINGS
4-2-17:  ADMINISTRATION
4-2-18:  REPEALED BY ORDINANCE NO. 3544

4-2-1:  LEGISLATIVE INTENT:  (2032)  H.B. 1007, enacted by the Fifty-fifth Colorado General Assembly and approved by the Governor on June 6, 1985, sets forth procedures for the collection of sales and use taxes by home-rule cities.  This Title contains provisions that are consistent with some of those set forth in H.B. 1007.  The City Council finds that Article XX of the Colorado Constitution grants plenary power to home-rule cities to levy and collect taxes within the City limits.  The City Council does not endorse restrictions on the taxing power of home-rule cities.  Thus, it is the intent of the City Council in enacting provisions consistent with H.B. 1007 to assist the business community, but not in any way to prejudice the City's right to fully exercise its constitutional authority to levy and collect taxes within its boundaries. 

4-2-2:  DEFINITIONS:  (2032 2165 2972 3371 3544)  The following words, terms, and phrases, when used in this Chapter, shall have the following meaning, unless the context clearly indicates otherwise: 

“Access Services” shall mean the services furnished by a local exchange company to its customers who provide telecommunications services that allow them to provide such telecommunications services.

“Auction” shall mean any sale where tangible personal property is sold by an auctioneer who is either the agent for the owner of such property or is, in fact, the owner thereof.

“Automobile Vehicle” shall mean any vehicle or device in, upon, or by which any person or property is or may be transported or drawn upon a public highway, or any device used or designed for aviation or flight in the air.  Automotive vehicle includes, but is not limited to, motor vehicles, trailers, semi-trailers, or mobile homes.  Automotive vehicle shall not include devices moved by human power or used exclusively upon stationary rails or tracks.

“Coin-Operated Device” shall mean any device operated by coins or currency or any substitute therefor.

“Commercial Packaging Material” shall mean containers, labels and shipping cases sold to a person engaged in manufacturing, compounding, wholesaling, jobbing, retailing, packaging, distributing or bottling for sale, profit or use that meets all of the following conditions:

(1) Is used by the manufacturer, compounder, wholesaler, jobber, retailer, packager, distributor or bottler to contain or label the finished product;

(2) Is transferred by said person, along with and as a part of the finished product, to the purchaser; and

(3) Is not returnable to said person for reuse.

“Construction Equipment” shall mean any equipment used by a person in making improvements or building structures.

“Construction Materials” shall mean tangible personal property that, when combined with other tangible personal property, loses its identity to become an integral and inseparable part of a completed structure or project.  Construction materials include, but are not limited to, such things as:  asphalt, bricks, builders' hardware, caulking material, cement, concrete, conduit, electric wiring and connections, fireplace inserts, electrical heating and cooling equipment, flooring, glass, gravel, insulation, lath, lead, lime, lumber, macadam, millwork, mortar, oil, paint, piping, pipe valves and pipe fittings, plaster, plumbing fixtures, putty, reinforcing mesh, road base, roofing, sand, sanitary sewer pipe, sheet metal, site lighting, steel, stone, stucco, tile, trees, shrubs and other landscaping materials, wall board, wall coping, wall paper, weather stripping, wire netting and screen, water mains and meters, and wood preserver.  The above materials, when used for forms, or other items that do not remain as an integral or inseparable part of a completed structure or project, are not construction materials.

“Consumer” shall mean any individual person or person engaged in business in the City who uses, stores, distributes or otherwise consumes in the City tangible personal property or taxable services purchased from sources inside or outside the City.

“Engaged in Business in the City” shall mean performing or providing services or selling, leasing, renting, delivering or installing tangible personal property for storage, use or consumption within the City.  Engaged in business in the City includes, but is not limited to, any one of the following activities by a person:

(1) Directly, indirectly, or by a subsidiary maintains a building, store, office, salesroom, warehouse, or other place of business within the taxing jurisdiction;

(2) Sends one (1) or more employees, agents or commissioned sales persons into the taxing jurisdiction to solicit business or to install, assemble, repair, service, or assist in the use of its products, or for demonstration or other reasons;

(3) Maintains one (1) or more employees, agents or commissioned sales persons on duty at a location within the taxing jurisdiction;

(4) Owns, leases, rents or otherwise exercises control over real or personal property within the taxing jurisdiction; or

(5) Makes more than one (1) delivery into the taxing jurisdiction within a twelve- (12) month period.

“Farm Closeout Sale” shall mean full and final disposition of all tangible personal property previously used by a farmer or rancher in farming or ranching operations that are being abandoned.

“Food” shall mean food for domestic home consumption as defined in 7 U.S.C. Section 2012(g), as amended, for purposes of the federal food stamp program as defined in 7 U.S.C. Section 2012(h), as amended, except that "food" does not include carbonated water marketed in containers; chewing gum; seeds and plants to grow food; prepared salads and salad bars; cold sandwiches; deli trays; and food or drink vended by or through machines or non-coin-operated coin collecting food and snack devices on behalf of a vendor.

“Gross Sales” shall mean the total amount received in money, credit, property or other consideration valued in money for all sales, leases, or rentals of tangible personal property or services.

“Mini-Storage or Mini-Warehouse” shall mean a building or group of buildings containing individual storage units rented or leased to individuals for the storage of merchandise, commodities or private property.

“Modified or Customized Computer Programs” shall mean a computer program created or modified for a specific customer where the preparation, modification or selection of the program for the customer's use requires an analysis of the customer's requirements and system by the program vendor or independent consultant; or the program requires adaptation by the vendor to be used in a specific computer hardware environment.

“Municipality” shall mean any municipal corporation or similar form of local government, including any city, town, and city and county, whether organized pursuant to charter, constitution or statute, in Colorado or another state, except counties, school districts, or special districts, and the City of Westminster.

“Newspaper” shall mean a publication, printed on newsprint, intended for general circulation, and published regularly at short intervals, containing information and editorials on current events and news of general interest.  The term “newspaper” does not include: magazines, trade publications or journals, credit bulletins, advertising inserts, circulars, directories, maps, racing programs, reprints, newspaper clipping and mailing services or listings, publications that include an updating or revision service, or books or pocket editions of books.

“Pay Television” shall include, but not be limited to, cable, microwave or other television service for which a charge is imposed.

“Preprinted Newspaper Supplements” shall mean inserts, attachments or supplements circulated in newspapers that:

(1) Are primarily devoted to advertising; and

(2) The distribution, insertion, or attachment of which is commonly paid for by the advertiser.

“Pre-Written Computer Programs” shall mean systems programs or application programs that are not written specifically for the user.

“Prescription Drugs” shall mean a drug that, prior to being dispensed or delivered, is required by the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301, et seq., and the regulations promulgated thereunder, to bear, at a minimum, the symbol “RX only,” and is, in fact, dispensed, delivered, or administered to a person or animal by, or pursuant to the direction of, a licensed practitioner of the healing arts or veterinary medicine.

“Price” or “Purchase Price” shall mean:

(1) The price to the consumer, exclusive of any direct tax imposed by the federal government or by this article, and, in the case of all retail sales involving the exchange of property, also exclusive of the fair market value of the property exchanged at the same time and place of the exchange, 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. Any money or other consideration paid over and above the value of the exchanged property is subject to tax.

(2) "Price" or "Purchase Price" shall include:

(a) The amount of money received or due in cash and credits.
(b) Property at fair market value taken in exchange but not for resale in the usual course of the retailer's business.
(c) Any consideration valued in money, such as trading stamps or coupons whereby the manufacturer or someone else reimburses the retailer for part of the purchase price and other media of exchange.
(d) The total price charged on credit sales, including finance charges that are not separately stated.  An amount charged as interest on the unpaid balance of the purchase price is not part of the purchase price unless the amount added to the purchase price is included in the principal amount of a promissory note; except the interest or carrying charge set out separately from the unpaid balance of the purchase price on the face of the note is not part of the purchase price.  An amount charged for insurance on the property sold and separately stated is not part of the purchase price.
(e) Installation, delivery and wheeling-in charges included in the purchase price and not separately stated.
(f) Transportation and other charges to effect delivery of tangible personal property to the purchaser.
(g) Indirect federal manufacturers' excise taxes, such as taxes on automobiles, tires and floor stock.
(h) The gross purchase price of articles sold after manufacturing or after having been made to order, including the gross value of all the materials used, labor and service performed and the profit thereon.
(i) Charges for items or services exempt from or not subject to tax included in the purchase price and not separately stated.

(3) "Price" or "Purchase Price" shall not include:

(a) Any sales or use tax imposed by the State of Colorado or by any political subdivision thereof.
(b) The fair market value of property exchanged if such property is to be sold thereafter in the retailer’s usual course of business.  This is not limited to exchanges in Colorado.  Out-of-state trade-ins are an allowable adjustment to the purchase price.
(c) Discounts from the original price, if such discount and the corresponding decrease in sales tax due is actually passed on to the purchaser.  An anticipated discount to be allowed for payment on or before a given date is not an allowable adjustment to the price in reporting gross sales.

“Private Communications Services” shall mean telecommunications services furnished to a subscriber that entitles the subscriber to exclusive or priority use of any communication channel or groups of channels, or to the exclusive or priority use of any interstate inter-communications system for the subscriber's stations.

“Prosthetic Devices” shall mean any artificial limb, part, device or appliance for human use that aids or replaces a bodily function; is designed, manufactured, altered or adjusted to fit a particular individual; and is prescribed by a licensed practitioner of the healing arts.  Prosthetic devices include, but are not limited to, prescribed auditory, ophthalmic or ocular, cardiac, dental, or orthopedic devices or appliances, oxygen concentrator's, and oxygen with related accessories.

“Purchase” or “Sale” shall mean:

(1) The acquisition for any consideration by any person of tangible personal property or taxable services that are purchased, leased, rented, sold, used, stored, distributed, or consumed, but excludes a bona fide gift of property or services.  These terms include capital leases, installment and credit sales, and property and services acquired by:

(a) Transfer, either conditionally or absolutely, of title or possession or both to tangible personal property;
(b) A lease, lease-purchase agreement, rental or grant of a license, including royalty agreements, to use tangible personal property or taxable services.  The utilization of coin-operated devices, except coin-operated telephones, that do not vend articles of tangible personal property shall be considered short-term rentals of tangible personal property.
(c) Performance of taxable services; or
(d) Barter or exchange for other property or services, including coupons.

(2) The terms "purchase" and "sale" do not include:

(a) A division of partnership or limited liability company assets among the partners or limited liability company members according to their interests in the partnership;
(b) The formation of a corporation by the owners of a business and the transfer of their business assets to the corporation in exchange for all the corporation's outstanding stock, except qualifying shares, in proportion to the assets contributed;
(c) The transfer of assets of shareholders in the formation or dissolution of professional corporations;
(d) The dissolution and the pro rata distribution of the corporation's assets to its stockholders;
(e) A transfer of a partnership interest;
(f) The transfer in a reorganization qualifying under Section 368(a)(1) of the Internal Revenue Code of 1954, as amended;
(g) The formation of a partnership or limited liability company by the transfer of assets to the partnership or limited liability company, or transfers to a partnership or limited liability company in exchange for proportionate interests in the partnership or limited liability company;
(h) The repossession of personal property by a chattel mortgage holder or foreclosure by a lienholder;
(i) The transfer of assets from a parent corporation to a subsidiary corporation or corporations that are owned at least eighty percent (80%) by the parent corporation, which transfer is solely in exchange for stock or securities of the subsidiary corporation;
(j) The transfer of assets from a subsidiary corporation or corporations that are owned at least eighty percent (80%) by the parent corporation to a parent corporation or to another subsidiary that is owned at least eighty percent (80%) by the parent corporation, which transfer is solely in exchange for stock or securities of the parent corporation or the subsidiary that received the assets;
(k) The transfer of assets between parent and closely held subsidiary corporations, or between subsidiary corporations closely held by the same parent corporation, or between corporations that are owned by the same shareholders in identical percentage of stock ownership amounts, computed on a share-by-share basis, when a tax imposed by this Title was paid by the transferor corporation at the time it acquired such assets, except to the extent that there is an increase in the fair market value of such assets resulting from the manufacturing, fabricating, or physical changing of the assets by the transferor corporation.  To such an extent, any transfer referred to in this paragraph (k) shall constitute a sale.  For the purposes of this paragraph (k), a closely held subsidiary corporation is one in which the parent corporation owns stock possessing at least eighty percent (80%) of the total combined voting power of all classes of stock entitled to vote and owns at least eighty percent (80%) of the total number of shares of all other classes of stock.

“Qualified Hospital Organization” means any of the following:

(1)     An organization that is exempt from federal income tax under Section 115 or Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, but only if the organization holds a license to operate a "general hospital" for people issued pursuant to Sections 25-3-101 and 25-3-102, Colorado Revised Statutes (2012), as amended, including any successor provisions to those sections, and operates a general hospital in the City;  

(2)     A corporation or trust that is exempt from federal income tax under Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, and that owns or employs personal property or improvements that are used in the operations of one (1) or more organizations described in paragraph (1) of this definition; and either

(a)     Directly controls, or is controlled by, one (1) or more organizations described in paragraph (1) of this definition; or  

(b)     Is controlled by a management organization as defined in paragraph (3) of this definition in common with one (1) or more organizations described in paragraph (1) of this definition; or  

(c)     Owns a hospital that is licensed to operate as a "general hospital" for people in the City pursuant to Sections 25-3-101 and 25-3-102, Colorado Revised Statutes (2012), as amended, including any successor provisions to those sections, and that is operated by an organization described in paragraph (1) of this definition.

(3)     An organization that is exempt from federal income tax under Section 501(c)(3) of the United States Internal Revenue Code of 1986, as amended, and a principal function of which is to manage the property or operations, or both, of one (1) or more organizations described in paragraphs (1) or (2) of this definition; and  

(4)     A partnership, limited partnership, limited liability limited partnership, limited liability partnership, limited liability company, or joint venture if all of the partners, members, joint venturers or other participants in such partnership, limited partnership, limited liability limited partnership, limited liability partnership, limited liability company or joint venture are organizations described in paragraphs (1), (2) or (3) of this definition.

“Retail Sales” shall mean all sales except wholesale sales. 

“Retailer” shall mean any person selling, leasing or renting tangible personal property or services at retail.  Retailer shall include any:

(1) Auctioneer;

(2) Salesperson, representative, peddler or canvasser who makes sales as a direct or indirect agent of, or obtains such property or services sold from, a dealer, distributor, supervisor or employer;

(3) Charitable organization or governmental entity that  makes sales of tangible personal property to the public, notwithstanding the fact that the merchandise sold may have been acquired by gift or donation, or that the proceeds are to be used for charitable or governmental purposes.

“Return,” for purposes of this Chapter, shall include any definition of "return" included in other chapters of this Title.

“Sales Tax” shall mean the tax to be collected and remitted by a retailer on sales taxed under this Chapter.

“Storage Facility” shall mean any indoor or outdoor area, structure, or warehouse that is ordinarily used to store tangible personal property.  Storage facility shall not include kennels, lockers, mobile home pads, safe deposit boxes, reservoirs, or lease or rental of storage space in conjunction with the lease of an area at which a business is conducted. 

“Storage Space” mean any mini-storage, mini-warehouse or storage facility.

“Tangible Personal Property” shall mean corporeal personal property.

“Tax” shall mean the use tax due from a consumer or the sales tax due from a retailer or the sum of both due from a retailer who also consumes.

“Telecommunications Service” shall mean the transmission of any two-way interactive electromagnetic communications, including, but not limited to, voice, image, data and any other information by the use of any means, but not limited to wire, cable, fiber optical cable, microwave, radio wave or any combination of such media.  "Telecommunications service" includes, but is not limited to, basic local exchange telephone service, toll telephone service and teletypewriter service, including, but not limited to, residential and business service, directory assistance, cellular mobile telephone or telecommunication service, specialized mobile radio and two-way pagers and paging service, including any form of mobile two-way communication.  "Telecommunications service" does not include separately stated non-transmission services that constitute computer processing applications used to act on the information to be transmitted.

“Use Tax” shall mean the tax paid or required to be paid by a consumer for using, storing, distributing or otherwise consuming tangible personal property or taxable services inside the City.

“Wholesale Sales” shall mean sales to licensed retailers, jobbers, dealers or wholesalers for resale.  Sales by wholesalers to consumers are not wholesale sales.  Sales by wholesalers to non-licensed retailers are not wholesale sales.

“Wholesaler” shall mean any person selling to retailers, jobbers, dealers, or other wholesalers for resale and not for storage, use, consumption, or distribution.

4-2-3:  RATE; IMPOSITION AND COLLECTION; DISTRIBUTION:  (2032 2379 2476 3071 3371 3633)

(A) SALES TAX:  There is hereby levied a tax or excise upon all sales of tangible personal property and services specified in Section 4-2-5, W.M.C.  For sales transacted on or after January 1, 2004, but prior to January 1, 2033, the rate levied shall be three and eighty-five hundredths percent (3.85%).  Unless otherwise lawfully provided, the three and eighty-five hundredths percent (3.85%) tax rate shall be reduced to three and six-tenths percent (3.6%) on January 1, 2033.

(B) USE TAX:  There is hereby levied a tax or excise upon the privilege of using, storing, distributing, or otherwise consuming in the City any article or tangible personal property or taxable services purchased, leased or rented from sources inside or outside the City on which the City sales tax has not been paid.  For sales transacted on or after January 1, 2004, but prior to January 1, 2033, the rate levied shall be three and eighty-five hundredths percent (3.85%).  Unless otherwise lawfully provided, the three and eighty-five hundredths percent (3.85%) tax rate shall be reduced to three and six-tenths percent (3.6%) on January 1, 2033.

(C) IMPOSITION AND COLLECTION:  The tax specified in this Section is imposed upon the purchaser.  Any seller shall collect the tax and remit it to the City pursuant to Section 4-2-4, W.M.C. 

(D) DISTRIBUTION:  Except as specified in this subsection, the City shall distribute all sales and use tax receipts first for costs of administration and collection of sales and use tax, next for the fulfillment of any sales and use tax bond covenants, and finally for any lawful purposes of the City.

(1) Collection at three and eighty-five hundredths percent (3.85%) rate:

(a) The City shall distribute six and forty-nine hundredths percent (6.49%) of all sales and use tax collected at the rate of three and eighty-five hundredths percent (3.85%) to the Open Space Fund for the purpose of funding the open space acquisition program and development and enhancement of recreational facilities with up to one-half (1/2) of such revenues to be used for the development of additional park land and open space, trail development, enhancement of existing parks and development and enhancement of recreational facilities as approved by Westminster voters on November 5, 1996.
(b) The City shall distribute fifteen and fifty-eight hundredths percent (15.58%) of all sales and use tax collected at the rate of three and eighty-five hundredths percent (3.85%) to improve and enhance the safety and security of Westminster residents as approved by Westminster voters on November 4, 2003.

(2) Collection at three and six-tenths percent (3.6%) rate:  The City shall distribute sixteen and sixty-seven hundredths percent (16.67%) of all sales and use tax collected at the rate of three and six-tenths percent (3.6%) to improve and enhance the safety and security of Westminster residents as approved by Westminster voters on November 4, 2003.

(3) Collection at three and one-quarter percent (3.25%) rate:  The City shall distribute seven and sixty-nine hundredths percent (7.69%) of all sales and use tax collected at the rate of three and one-quarter percent (3.25%) to the Open Space Fund for the purpose of funding the open space acquisition program and development and enhancement of recreational facilities with up to one-half (1/2) of such revenues to be used for the development of additional park land and open space, trail development, enhancement of existing parks and development and enhancement of recreational facilities as approved by Westminster voters on November 5, 1996.

(E) The tax imposed in this Section shall continue to be levied and collected until amended or repealed by ordinance. 

(F) The tax imposed in this Chapter shall be in addition to all other taxes imposed by law.

4-2-4:  TAX SCHEDULE:  (2032 2476 3071)

(A) In order to avoid fractions of pennies, the tax payable by the purchaser or consumer to the retailer shall be computed by the retailer in accordance with a schedule or system approved by the Finance Director. The schedule or system shall be designed so that no tax levied by this Chapter is charged on any purchase of twelve cents ($0.12) or less. However, the use of a schedule in collecting taxes from purchasers shall not relieve the retailer from liability for payment of the full amount of the tax levied in Section 4-2-3, W.M.C., above, on all of the taxable sales or services.

(B) Use of a schedule or system approved by the Finance Director shall not result in computation of a tax liability that is less than the amount that equals taxable sales multiplied by the specified rate.

4-2-5:  TRANSACTIONS AND ITEMS SUBJECT TO TAX:   (2032 2972)

(A) The tax levied by Section 4-2-3(A), W.M.C., shall apply to the price of the following:

(1) Tangible personal property that is sold, leased or rented, whether or not such property has been included in a previous taxable transaction.

(2) Telecommunications services, except carrier access services and interstate private communications services, and except as otherwise provided by this Section for mobile communication services, for all international, interstate and intrastate telecommunications service originating from or received on telecommunication equipment in the City, if the charge for the service is billed to an apparatus, telephone or account in this City, to a customer location in this City, or to a person residing in this City without regard to where the bill for such services is actually received.

(a) Mobile telecommunications service shall be subject to the tax imposed by this Chapter only if the service is provided by a home service provider to a customer whose place of primary use is within the City and the service originates within the City; further, the tax shall be collected in accordance with the provisions of the Act. 
(b) As used in this subsection, unless the context otherwise requires:

(i) “Act” means the federal “Mobile Telecommunications Sourcing Act,” 4 U.S.C. Secs. 116 to 126, as amended.
(ii) “Customer” means customer as defined in Section 124(2) of the Act.
(iii) “Home Service Provider” means home service provider as defined in Section 124(5) of the Act.
(iv) “Mobile Telecommunications Service” means mobile telecommunications service as defined in section 124(7) of the Act.
(v) “Place of Primary Use” means the place of primary use as defined in Section 124(8) of the Act.

(c) The Finance Director may require payment of the tax on any other basis permitted by this Chapter when a customer fails to provide its place of primary use or the Act is determined to be inapplicable to the tax imposed by this Chapter on mobile telecommunications services.

(3) Installation in the City of equipment required to receive or transmit telecommunication service.

(4) Meals sold to the public or to employees.

(5) Gas, electricity and steam furnished for domestic, commercial or industrial consumption.

(6) Pay television, including charges for service, installation, connection, or any similar charge.

(7) Automotive vehicles sold, leased or rented in the City.

(8) Services of an operator when furnished with the lease or rental of tangible personal property, if such services are not separately stated.

(9) Coin-operated devices that dispense tangible personal property.

(10) Rentals of storage space within the City.

(B) The tax levied by Section 4-2-3(B), W.M.C., shall apply to the price of the following:

(1) Non-exempt tangible personal property purchased for use without payment of the sales tax and used, stored, or consumed inside the City, either personally or in conjunction with the rendering of a service.

(2) Tangible personal property purchased at wholesale or component parts purchased for manufacture that are subsequently used by the taxpayer, either personally or in the business.

(3) Taxable services purchased without payment of the sales tax. 

(4) The cost of meals given without charge to employees or others. 

(5) Automotive vehicles required to be registered at an address inside the City on which municipal sales tax has not been paid.  The county clerk of the county in which the registration occurs is authorized to collect such tax for the City prior to or at the time of registration.

(a) The determination of vehicle registration requirements for individuals shall be the same as for the determination of residency for voter registration purposes.
(b) The determination of vehicle registration requirements for automotive vehicles that are owned by a business and operated primarily for business purposes shall be based on the address from which such motor vehicles are principally operated and maintained. 

4-2-6:  EXEMPTIONS FROM SALES TAX:   (2032 2165 2211 2261 2972 3633)

(A) The tax levied by Section 4-2-3(A), W.M.C., shall not apply to the following:

(1) Automotive vehicles sold to nonresidents of the City for registration outside the City.

(2) Tangible personal property when both of the following conditions exist:

(a) The sales are to individuals who reside or businesses that are located outside the City; and,

(b) The articles purchased are delivered to the purchaser outside the City by common carrier or by the conveyance of the seller or by mail, and such articles delivered are used outside the City.

(3)   Prosthetic devices, prescription drugs, and items that are dispensed pursuant to a written order of a licensed practitioner of the healing arts.

(4) Cigarettes.

(5) All direct sales, except for construction materials used in a project for which a City building permit is required, to charitable organizations in the conduct of their regular exempt organizational functions and activities, when billed to and paid for by the charitable organization.

(6) All direct sales, except for construction materials used in a project for which a City building permit is required, to the United States Government, the State of Colorado, its departments or institutions, and the political subdivisions thereof in their governmental capacities only, when billed to and paid for by the governmental entity.

(7) Construction materials used in construction projects undertaken and managed directly by the City.

(8) All sales that the City is prohibited from taxing under the Constitution or laws of the United States, or of the State of Colorado.

(9) Tangible personal property sold to a public utility company or railroad doing business both inside and outside the City for use in its business operations outside the City, even though delivery thereof is made inside the City.

(10) Motor fuel upon which there has been accrued or paid either the gasoline tax or special fuel tax required by Article 27 of Title 39, C.R.S., and that is not subject to refund.

(11) Farm implements, and parts and accessories for the same.

(12) Neat cattle, sheep, lambs, swine and goats; mares and stallions for breeding purposes.

(13) Feed for livestock or poultry, seeds, and orchard trees.

(14) Straw and other bedding for use in the care of livestock.

(15) Farm closeout sales.

(16) All wholesale sales, except sales of property used or consumed by the wholesaler.

(17) Tangible personal property sold to a person engaged in manufacturing or processing for sale when the product being manufactured or processed is transformed in fact by the addition of the property, and such property becomes a constituent part of the finished product. 

(18) Commercial packaging materials.

(19) Napkins, straws or eating utensils sold to a retailer when the following conditions are met:

(a) The property is used in the consumption of food purchased;
(b) The cost of the property is included in the price of an item that is sold separately, rather than included in the price of a service; and
(c) The property is not returnable or intended for reuse.

(20) Newsprint and printer's ink for use by publishers, newspapers and commercial printers.

(21) Newspapers, but not including preprinted newspaper supplements.
 
(22) Tangible personal property sold for rental or leasing inventory, including, but not limited to, coin-operated devices, provided that such property is not otherwise used except for customer demonstration or display. 

(23) Labor sold with tangible personal property, if such labor is stated separately on the invoice from the tangible personal property sold; except that, manufacturing or fabricating or other processing labor is never exempt.

(24) Construction materials, if the purchaser of such materials presents to the retailer a building permit, or other documentation acceptable to the City, that evidences that a use tax on such materials has been paid or is required to be paid to the City or a municipality. 

(25) Tangible personal property sold through coin-operated devices for a price of fifteen cents ($.15) or less.

(26) Food purchased with federal food stamps or with funds provided by the Special Supplemental Nutrition Program for Women, Infants, and Children, 42 U.S.C. Section 1786, from retailers who qualify as follows:

(a) Retail food stores that primarily sell food for home preparation and consumption and in which one or more staple food items make up more than fifty percent (50%) of eligible food sales.  These stores shall include:  full-line grocery stores; convenience stores; stores that sell meat, poultry, or fish; stands that sell agricultural commodities; farmers’ markets; milk routes; bread routes; day-old bread stores; bakeries that sell bread; and nonprofit cooperative food-purchasing  ventures that are properly licensed to sell food in the state and locality in which they are operating. 
(b) Firms whose primary business is not the sale of food for home preparation and consumption, but who have recognized grocery departments in which staple foods make up more than fifty percent (50%) of eligible food sales.

(27) Meals purchased with federal food stamps or with funds provided by the Special Supplemental Nutrition Program for Women, Infants, and Children, 42 U.S.C. Section 1786, in the following instances:

(a) The meals are prepared for and served to residents of federally subsidized housing for the elderly; or are prepared for and served to persons who are sixty (60) years of age or over or who receive supplemental security income benefits, and their spouses, in senior citizens' centers, apartment buildings occupied primarily by such persons, public or private nonprofit establishments (eating or otherwise) that contract with the appropriate agency of the State to offer meals for such persons at concessional prices;
(b) The meals are prepared for and delivered to persons sixty (60) years of age or over and persons who are physically or mentally handicapped or otherwise so disabled that they are
unable adequately to prepare all of their meals, when such meals are prepared for and delivered to them (and their spouses) at their home by a public or private nonprofit organization or by a private establishment that contracts with the appropriate State agency to perform such services at concessional prices;
(c) The meals are prepared for and served to narcotics addicts or alcoholics as part of drug addiction or alcoholic treatment and rehabilitation programs;
(d) The meals are prepared for and served to disabled or blind recipients of federal financial benefits under the Social Security Act who are residents in a public or private nonprofit group living arrangement that is certified for no more than sixteen (16) residents by
the appropriate State agency or agencies under regulations issued under the Social Security Act; or
(e) The meals are prepared for and served to women and children temporarily residing in public or private nonprofit shelters for battered women and children.

(28) Access services.

(29) Private communications services.

(30) Modified or customized computer programs, but not including pre-written computer programs.

(31) Garage sales, yard sales or estate sales in a residential area, not exceeding a consecutive three- (3) day period or a total of twenty-one (21) days per calendar year, but not including sales conducted by a professional or compensated agent of the owner of the items to be sold.

(32) Sales by a recognized youth group affiliated with a charitable organization or a governmental entity.

(33) Transactions subject to the admissions or accommodations tax imposed by this Title.

(34) Water sold by the City.

(35) Insulin in all forms, dispensed pursuant to the direction of a licensed practitioner of the healing arts.  This includes glucose to be used for the treatment of insulin reactions, diabetic urine and blood testing kits and materials, and insulin measuring and injecting devices. 

(36)   All sales, except of construction materials used in a project for which a City building permit is required, to qualified hospital organizations when billed to and paid for by the qualified hospital organization.

(B) The list of exemptions shall not be increased by implication or similarity. 

4-2-7:  EXEMPTIONS FROM USE TAX:   (2032 2165 3544) 

(A) The tax levied by Section 4-2-3(B), W.M.C., shall not apply to the following:

(1) Tangible personal property that is exempt from the sales tax pursuant to Section 4-2-6, W.M.C.

(2) The storage of construction materials purchased on or after January 1, 1986. 

(3) Tangible personal property purchased by a taxpayer during a time when the taxpayer was located outside the City and that:

(a) Was purchased on or after January 1, 1986, and was used by the taxpayer for a period of at least three (3) years prior to the taxpayer's relocation to the City; or
(b) Was first used inside the City on or after January 1, 1994, and was used by the taxpayer for a period of at least six (6) months prior to the taxpayer's relocation to the City.
(c) For purposes of this subsection, the term “relocation” means the establishment of a fixed, permanent building, store, office, salesroom, or other place of business within the City by a person who was not previously engaged in business in the City, or who was engaged in business in the City on a transient basis.  “Relocation” shall not include the use of construction equipment or other property in the City by a person located outside the City, or the transfer of property from a location outside the City to an existing location within the City.

(4) Automotive vehicles if the owner is or was, at the time of purchase, a nonresident of the City who purchased the vehicle for use outside the City, and if the vehicle was previously registered, titled, and licensed outside the City.

(B) The list of exemptions shall not be increased by implication or similarity. 

4-2-8:  SECURED SALES TRANSACTIONS:  (2032 3544)  Whenever taxable tangible personal property is sold under a lease-purchase agreement, capital lease, or other conditional sales contract whereby the seller retains title as security for all or part of the price, or whenever the seller takes a chattel mortgage on such tangible personal property to secure all or part of the price, the full price of such property shall be reported for the period in which the sale was made.  No refund or credit shall be allowed to either party to the transaction in case of repossession.

4-2-9:  PROVISIONS RELATIVE TO CONSTRUCTION MATERIALS:   (2032 2972 3544 3553)

(A) PUBLIC AND PRIVATE IMPROVEMENTS:

(1) Every user of construction materials who builds, reconstructs, alters, or improves land or improvements to land as required by an agreement executed pursuant to Chapter 6, Title XI of this Code shall remit use tax on construction materials used on such project, whether purchased from sources inside or outside the City, by one of the following methods:

(a) Estimated prepayment. The estimated cost of construction materials shall be calculated by multiplying the cost of improvements or estimate thereof as listed in the public or private improvements agreement by fifty percent (50%). Use tax on such estimated cost of construction materials shall be remitted to the Finance Director prior to commencing work. Upon receipt of the estimated prepayment, the Finance Director shall issue written documentation evidencing that the use tax due upon such construction materials has been paid directly to the City. Upon written acceptance of any improvements by the City, the user of construction materials shall compute the use tax due on the actual cost of construction materials used in the project and make a return of any tax due in excess of the estimated prepayment in accordance with Section 4-1-7(D), W.M.C.
(b) Actual cost. Prior to commencing work, the user of construction materials shall notify the Finance Director in writing of his election to make monthly returns of use tax due. The Finance Director shall thereupon issue written documentation evidencing that the use tax due on such materials will be paid directly to the City. From the date work commences through the date of written acceptance of any improvements by the City, the user of construction materials shall, on or before the twentieth (20th) day of each month, make a return to the Finance Director for the construction materials used during the preceding calendar month, and file such return, whether or not tax is due, in accordance with Section 4-1-7(A), W.M.C.

(2) Except as provided by Section 4-2-6(A)(7), W.M.C., use tax shall be due on all construction materials used in making public and private improvements:

(a) notwithstanding ownership of the land or improvements by a charitable organization or governmental entity, unless such charitable organization or governmental entity purchases all such construction materials directly and makes all such improvements using its own employees; and
(b) notwithstanding the ultimate dedication of certain improvements to the City. 

(B) PROJECTS REQUIRING A CITY BUILDING PERMIT:  Except as provided by Section 4-2-6(A)(7), W.M.C., every person, including any charitable organization or governmental entity, who is required to obtain a City building permit shall remit use tax on construction materials used on that project, whether purchased from sources inside or outside the City, by one of the following methods:

(1) Estimated prepayment.  The estimated cost of construction materials shall be calculated by multiplying the total valuation of the construction project entered on the building permit by the City Building Division, by fifty percent (50%).  Use tax on such estimated cost of construction materials shall be paid at the time the building permit is issued.  Upon the later of the date of final inspection by the
building official or the date of issuance of a Certificate of Occupancy, the taxpayer shall compute the use tax due on the actual cost of construction materials and make a return of any tax due in excess of the estimated prepayment pursuant to Section 4-1-7(D), W.M.C. 

 (2) Actual cost.  Prior to commencing work, the taxpayer shall notify the Finance Director in writing of his election to make monthly returns of use tax due. The Finance Director shall thereupon issue the taxpayer written documentation evidencing that the use tax due on such materials will be paid directly to the City. From the date of issuance of the City building permit through the date of final inspection by the building official or the issuance of the Certificate of Occupancy, whichever is later, the contractor shall, on or before the twentieth (20th) day of each month, make a return to the Finance Director for the construction materials used during the preceding calendar month, and file such return, whether or not tax is due, in accordance with Section 4-1-7(A), W.M.C.

(C) Use taxes imposed upon other uses of construction materials within the City shall be reported and paid in the same manner as provided for the payment of use taxes imposed upon other tangible personal property.

4-2-10:  COMPUTATION OF USE TAX ON CONSTRUCTION EQUIPMENT:  (2032)  In addition to the use tax on construction materials, use tax shall be due on construction equipment used inside the City.  

(A) For construction contracts entered into prior to January 1, 1986, the full price paid by the current owner for construction equipment located inside the City shall be subject to the tax.

(B) For construction contracts entered into on or after January 1, 1986:

(1) The taxpayer shall identify construction equipment used inside the City as follows:

(a) Prior to or on the date the equipment is located inside the City, the taxpayer shall file with the City an equipment declaration on a form provided by the City.  Such declaration shall state the dates on which the taxpayer anticipates the equipment will be located inside and removed from the boundaries of the City, shall include a description of each such anticipated piece of equipment, shall state the actual or anticipated price of each such anticipated piece of equipment, and shall include such other information as reasonably deemed necessary by the City.
(b) The taxpayer shall file with the City an amended equipment declaration reflecting any changes in the information contained in any previous equipment declaration no less than once every ninety (90) days after the equipment is brought inside the City or, for equipment that is brought inside the City for a project of less than ninety (90) days duration, such amended
declaration must be filed no later than ten (10) days after substantial completion of the project.  Amended declarations for all other projects must be filed at least once every ninety (90) days after the equipment is brought inside the City.
(c) The taxpayer need not declare any equipment for which the purchase price was less than two thousand five hundred dollars ($2,500). Such equipment shall be presumed to have been purchased in a municipality having a sales or use tax at a rate at least equal to the rate established pursuant to Section 4-2-3, W.M.C., and such tax shall be presumed to have been paid to that municipality. 

(2) Construction equipment located inside the City for thirty (30) consecutive days or less for which a declaration is properly filed shall be subject to the tax in an amount calculated as follows:  one twelfth (1/12) of the price of the equipment at the time it was purchased shall be multiplied by the rate established by Section 4-2-3, W.M.C.

(3) Construction equipment located inside the City for more than thirty (30) consecutive days, or equipment for which a declaration has not been properly filed, shall be subject to use tax on the full price of such equipment.

4-2-11: NONRESIDENT RETAILERS:  (2032)  Any retailer engaged in business in the City, but not maintaining an office in the City, who sells taxable tangible personal property or taxable services may petition the Finance Director to establish an alternate method of determining tax due.  If the Finance Director finds that the imposition of the tax on an individual sales basis will impose an unnecessary hardship on the retailer, and if the type and occasion of sale so warrants, the Finance Director may establish such alternate method.

4-2-12:  INCEPTION OF BUSINESS; INITIAL USE TAX:  (2032 3371)  Any person who purchases or establishes a business inside the City shall file an initial use tax return.

(A) EXISTING BUSINESSES:  Use tax shall be due on tangible personal property, except inventory held for lease, rental or resale, that is acquired with the purchase of a business.  The tax shall be based on the price of such property as recorded in the bill of sale or agreement and constituting a part of the total transaction at the time of the sale or transfer, provided the valuation is as great or greater than the fair market value of such property.  Where the transfer of ownership is a lump sum transaction, the use tax shall be due on the book value established by the purchaser for income tax depreciation purposes, or fair market value if no determination has been made.  When a business is taken over by other than the most recent seller in return for the assumption of outstanding indebtedness, the tax shall be paid on the fair market value of all taxable tangible personal property acquired by the purchaser. Such tax shall be reported on an initial use tax return.  The reporting period for such return shall be the period ending one (1) day prior to the first day of business by the new owner.

(B) NEW BUSINESSES:  Use tax shall be due on the price of all tangible personal property, except inventory held for lease, rental or resale, that is purchased for use inside the City.  Such tax shall be reported on the initial use tax return.  The reporting period for such return shall be the period ending one (1) day prior to the first (1st) day of business.

4-2-13:  USE TAX; METHOD OF PAYMENT:  (2032 2972)  Every consumer who has not paid the sales tax to a retailer shall, unless the credit established in Section 4-1-3(B)(2), W.M.C., applies, complete the use tax schedule of a return and remit the total tax liability to the City.

(A) The due date for licensed taxpayers shall be that established by Section 4-1-7, W.M.C.

(B) The due date for resident individuals shall be twenty (20) days from the end of the month in which the taxable transaction occurred. 

4-2-14:  INTERCITY CLAIMS FOR RECOVERY:  (2032  2972)  The intent of this Section is to streamline and standardize procedures related to situations where tax has been remitted to the incorrect municipality.  It is not intended to reduce or eliminate the responsibilities of the taxpayer to correctly pay, collect, and remit sales and use taxes to the City.

(A) As used herein, "Claim for Recovery" means a claim for reimbursement of sales and use taxes paid to the wrong taxing jurisdiction.

(B) When it is determined by the Director of Finance of the City that sales and use tax owed to the City has been reported and paid to another municipality, the City shall promptly notify the taxpayer that taxes are being improperly collected and remitted, and that, as of the date of the notice, the taxpayer must cease improper tax collections and remittances.

(C) The City may make a written Claim for Recovery directly to the municipality that received tax and/or penalty and interest owed to the City, or, in the alternative, may institute procedures for collection of the tax from the taxpayer.  The decision to make a Claim for a Recovery lies in the sole discretion of the City.  Any Claim for Recovery shall include a properly executed release of claim from the taxpayer releasing its claim to the taxes paid to the wrong municipality, evidence to substantiate the claim, and a request that the municipality approve or deny, in whole or in part, the claim within ninety (90) days of its receipt.  The municipality to which the City submits a Claim for Recovery may, for good cause, request an extension of time to investigate the claim, and approval of such extension by the City shall not be unreasonably withheld.

(D) Within ninety (90) days after receipt of a Claim for Recovery, the City shall verify to its satisfaction whether all or a portion of the tax claimed was improperly received, and shall notify the municipality submitting the claim in writing that the claim is either approved or denied in whole or in part, including the reasons for the decision.  If the claim is approved in whole or in part, the City shall remit the undisputed amount to the municipality submitting the claim within thirty (30) days of approval.  If a claim is submitted jointly by a municipality and a taxpayer, the check shall be made to the parties jointly.  Denial of a Claim for Recovery may only be made for good cause.

(E) The City may deny a claim on the grounds that it has previously paid a Claim for Recovery arising out of an audit of the same taxpayer.

(F) The period subject to a Claim for Recovery shall be limited to the thirty-six (36) month period prior to the date the municipality that was wrongly paid the tax receives the Claim for Recovery.

4-2-15:  NOTICE OF SALES AND USE TAX ORDINANCE AMENDMENTS:   (2032)

(A) In order to initiate a central register of sales and use tax ordinances for municipalities that administer local sales tax collection, the Finance Director of the City shall file with the Colorado Municipal League, prior to the effective date of Chapters 1 and 2 of this Title, a copy of the City sales and use tax ordinance reflecting all provisions in effect on the effective date of Chapters 1 and 2 of this Title.

(B) In order to keep current the central register of sales and use tax ordinances for municipalities that administer local sales tax collection, the Finance Director of the City shall file with the Colorado Municipal League, prior to the effective date of any amendment, a copy of each sales and use tax ordinance amendment enacted by the City.

(C) Failure of the City to file such ordinance or ordinance amendment pursuant to this Section shall not invalidate any provision of the sales and use tax ordinance or any amendment thereto.

4-2-16:  PARTICIPATION IN SIMPLIFICATION MEETINGS:  (2032)  The Finance Director shall cooperate with and participate on an as-needed basis with a permanent statewide sales and use tax committee convened by the Colorado Municipal League that is composed of State and municipal sales and use tax officials and business officials.  Said committee will meet for the purpose of discussing and seeking resolution to sales and use tax problems that may arise.  

4-2-17:  ADMINISTRATION:  (2032)  This Chapter shall be administered in accordance with Chapter 1 of this Title.  

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