C.R.S. Section 39-26-708
Construction and building materials

  • legislative declaration
  • definition

(1)

There shall be exempt from taxation under the provisions of part 1 of this article all sales of construction and building materials to contractors and subcontractors for use in the building, erection, alteration, or repair of structures, highways, roads, streets, and other public works owned and used by:

(a)

The United States government, the state of Colorado, its departments and institutions, and the political subdivisions thereof in their governmental capacities only;

(b)

Charitable organizations in the conduct of their regular charitable functions and activities; or

(c)

Schools, other than schools held or conducted for private or corporate profit.

(2)

There shall be exempt from taxation under the provisions of part 2 of this article the storage, use, or consumption by a contractor or subcontractor of construction and building materials for use in the building, erection, alteration, or repair of structures, highways, roads, streets, and other public works owned and used by:

(a)

The United States government, the state of Colorado, its departments and institutions, and the political subdivisions thereof in their governmental capacities only;

(b)

Charitable organizations in the conduct of their regular charitable functions and activities; or

(c)

Schools, other than schools held or conducted for private or corporate profit.

(2.5)

Intentionally left blank —Ed.

(a)

The general assembly finds, determines, and declares that:

(I)

The exemption under this section was enacted by the general assembly to reduce costs involved in the construction of public works;

(II)

The exemption codifies the principle that contractors should not be paying a tax levied by governmental entities on building materials used for the benefit of those same governmental entities;

(III)

Under current law, out of the state and all local governments across the state, the sales and use tax on construction and building materials used in the construction of public buildings is only levied by home rule cities;

(IV)

The state’s ability to honor its responsibilities under section 2 of article IX of the state constitution to provide for the establishment and maintenance of a thorough and uniform system of free public schools throughout the state is impaired when home rule cities tax public school construction materials because this tax increases the cost of providing public education within the boundaries of these municipalities as contrasted with public schools located within the boundaries of other municipalities that do not tax these materials;

(V)

The state’s responsibility to provide a thorough and uniform education is further impaired by the incentives created by the current tax disparities. Specifically, insofar as school districts serve the residents of multiple municipalities and not all of the municipalities tax public school construction materials, school districts are given incentives to build schools within those municipalities where the sales and use tax is not levied, rather than where the public schools are most needed, thereby depriving students and communities of local education resources.

(VI)

Extending the exemption to include home rule cities would eliminate these barriers and disparities and assist the state in honoring its responsibilities under section 2 of article IX of the state constitution;

(VII)

The current taxing system also creates negative extraterritorial impacts because taxpayers that reside in school districts that serve both taxing and nontaxing municipalities must subsidize the cost of the sales and use tax levied when public schools are built in municipalities that tax public school construction materials, even when such residents do not reside in the taxing municipality and their children do not attend public schools in the taxing municipality;

(VIII)

Extending the exemption to include the sales and use tax levied by home rule cities on public school construction materials would reduce the overall costs of constructing such facilities for the many jurisdictions across the state that are home rule cities; and

(IX)

Extending the exemption to include home rule cities would also promote a uniform and consistent treatment of the sale of building and construction materials statewide, thereby facilitating a more consistent and uniform tax structure, would limit the negative extraterritorial effects of this disparate tax treatment, and enhance taxpayer equity in all school districts statewide. Accordingly, the matters addressed in subsection (2.5)(b) of this section are matters of statewide concern.

(b)

Notwithstanding any other provision of law, in addition to the exemption from taxation created by subsections (1) and (2) of this section, there shall also be exempt from taxation under part 1 of this article 26 any tax levied by a home rule city on all sales of construction and building materials to contractors and subcontractors for use in the building, erection, alteration, or repair of a public school.

(c)

As used in subsection (2.5)(b) of this section, “public school” means a school that serves any of grades kindergarten through twelve and that derives its support, in whole or in part, from revenue raised by a general state or school district tax. “Public school” includes a charter school authorized by a school district pursuant to part 1 of article 30.5 of title 22, by the state charter school institute pursuant to part 5 of article 30.5 of title 22, or by the Colorado school for the deaf and the blind pursuant to section 22-80-102 (4).

(3)

On application by a purchaser or seller, the department of revenue shall issue to a contractor or subcontractor a certificate of exemption indicating that the contractor’s or subcontractor’s purchase of construction or building materials is for a purpose stated in subsection (1) of this section and is, therefore, free from sales tax. Unless the department determines pursuant to section 39-26-730 (2) that forms can be consolidated or eliminated, the department shall provide forms for the application and certificate and shall have the authority to verify that the contractor or subcontractor is, in fact, entitled to the issuance of the certificate prior to such issuance.

Source: Section 39-26-708 — Construction and building materials - legislative declaration - definition, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-39.­pdf (accessed Oct. 20, 2023).

39‑26‑101
Short title 39‑26‑102
Definitions 39‑26‑102.5
Change of references from “Internal Revenue Code of 1954” to “Internal Revenue Code of 1986” 39‑26‑103
Licenses - fee - revocation - definition 39‑26‑103.5
Qualified purchaser - direct payment permit number - qualifications 39‑26‑104
Property and services taxed - definitions 39‑26‑105
Vendor liable for tax - definitions - repeal 39‑26‑105.2
Remittance of tax - GIS - vendor held harmless - requirements of GIS database - rules - definition 39‑26‑105.3
Remittance of tax - electronic database - vendor held harmless - repeal 39‑26‑105.4
Remittance of tax - determination of address - dealer held harmless 39‑26‑105.5
Remittance of sales taxes - electronic funds transfers 39‑26‑106
Schedule of sales tax 39‑26‑107
Rules and regulations 39‑26‑108
Tax cannot be absorbed 39‑26‑109
Reports of vendor 39‑26‑111
Credit sales 39‑26‑112
Excess tax - remittance - repeal 39‑26‑113
Collection of sales tax - motor vehicles - off-highway vehicles - exemption - process for motor vehicles sold at auction - exception - definition 39‑26‑113.5
Refund of state sales taxes for vehicles used in interstate commerce - fund 39‑26‑115
Deficiency due to negligence 39‑26‑116
Record of sales 39‑26‑117
Tax lien - exemption from lien 39‑26‑118
Recovery of taxes, penalty, and interest - repeal 39‑26‑119
License and tax additional 39‑26‑120
False or fraudulent return, statement - penalty 39‑26‑121
Penalty 39‑26‑122
Administration 39‑26‑122.5
Collection of sales tax - enhanced efficiencies - intergovernmental agreements with local governments - legislative declaration 39‑26‑123
Receipts - disposition - transfers of general fund surplus - sales tax holding fund - creation - definitions 39‑26‑124
Applicability to banks 39‑26‑125
Limitations 39‑26‑126
Legislative finding as to revenues for old age pension fund 39‑26‑127
Legislation modifying the state sales tax base - no impact on local government sales tax bases - no expansion of local authority to levy sales tax 39‑26‑128
Uniform sales and use tax base - definition 39‑26‑129
Refund for property used in rural broadband service - legislative declaration - definitions 39‑26‑201
Definitions 39‑26‑202
Authorization of tax 39‑26‑204
Periodic return - collection 39‑26‑204.5
Remittance of tax - electronic database - retailer held harmless - repeal 39‑26‑204.6
Remittance of tax - determination of address - motor vehicle dealer held harmless 39‑26‑205
Tax constitutes lien - exemption from lien 39‑26‑206
Failure to make return 39‑26‑207
Penalty interest on unpaid tax 39‑26‑208
Collection of use tax - motor vehicles 39‑26‑209
Rules and regulations 39‑26‑210
Limitations 39‑26‑211
Applicability to banks 39‑26‑212
Legislation modifying the state use tax base - no impact on local government use tax bases - no expansion of local authority to levy use tax 39‑26‑401
Definitions 39‑26‑402
Refund of state sales and use tax for biotechnology - application requirements and procedures 39‑26‑701
Definitions 39‑26‑702
Department of revenue - rules 39‑26‑703
Disputes and refunds - repeal 39‑26‑704
Miscellaneous sales tax exemptions - governmental entities - hotel residents - schools - exchange of property 39‑26‑705
Miscellaneous use tax exemptions - printers ink and newsprint - manufactured goods 39‑26‑706
Miscellaneous sales and use tax exemptions - internet access - refractory materials - precious metal bullion and coins 39‑26‑707
Food, meals, beverages, and packaging - definitions 39‑26‑708
Construction and building materials - legislative declaration - definition 39‑26‑709
Machinery and machine tools - definitions 39‑26‑710
Railroads - construction and building materials - tangible personal property - work equipment - rolling stock 39‑26‑711
Aircraft - tangible personal property 39‑26‑711.5
Aircraft - use outside state 39‑26‑711.8
Aircraft - use outside state - on-demand air carriers 39‑26‑711.9
Historic aircraft on loan for public display - definition 39‑26‑712
Trailers and trucks 39‑26‑713
Tangible personal property 39‑26‑714
Vending machines - definitions 39‑26‑715
Fuel and oil - definitions 39‑26‑716
Agriculture and livestock - special fuels - definitions 39‑26‑717
Drugs and medical and therapeutic devices - legislative declaration - definitions - repeal 39‑26‑718
Charitable organizations - association or organization of parents and teachers of public school students 39‑26‑719
Motor vehicles 39‑26‑720
Bingo equipment 39‑26‑721
Manufactured homes and tiny homes 39‑26‑723
Colorado wood products - repeal 39‑26‑724
Components used to produce energy from a renewable energy source - definitions 39‑26‑725
Sales related to a school - definitions 39‑26‑726
Medical marijuana - debilitating conditions and ability to purchase 39‑26‑727
Tribal exemption - motor vehicles - partial interest - definition - legislative declaration 39‑26‑728
Property for use in space flight - definitions 39‑26‑729
Retail sales of marijuana 39‑26‑730
Sales and use tax exemption forms - simplification - legislative declaration 39‑26‑731
Eligible decarbonizing building materials - tax preference performance statement - legislative declaration - definition - repeal 39‑26‑732
Heat pump systems - tax preference performance statement - legislative declaration - definitions - repeal 39‑26‑733
Residential energy storage systems - tax preference performance statement - legislative declaration - definition - repeal 39‑26‑734
Rebuilding from declared wildfire disaster - tax preference performance statement - legislative declaration - definitions - repeal 39‑26‑801
Legislative declaration 39‑26‑802
Sales and use tax simplification task force - creation 39‑26‑802.5
Sales and use tax simplification - request for information 39‑26‑802.7
Electronic sales and use tax simplification system - sourcing method - implementation - legislative intent - definitions 39‑26‑802.9
Retailers without physical presence or with only incidental physical presence in local taxing jurisdictions - streamlined application process and no fee for local general business license - legislative declaration - definitions 39‑26‑803
Gifts, grants, or donations 39‑26‑804
Repeal of part
Green check means up to date. Up to date

Current through Fall 2024

§ 39-26-708’s source at colorado​.gov