C.R.S. Section 39-26-709
Machinery and machine tools

  • definitions

(1)

Intentionally left blank —Ed.

(a)

The following shall be exempt from taxation under the provisions of part 1 of this article:
(I)(Deleted by amendment, L. 2004, p. 1022, § 2, effective July 1, 2004.)(II) Except as allowed in section 39-30-106, on or after July 1, 1996, purchases of machinery or machine tools, or parts thereof, in excess of five hundred dollars to be used in Colorado directly and predominantly in manufacturing tangible personal property, for sale or profit, including any machinery or machine tools purchased by a business listed in the inventory prepared by the department of public health and environment pursuant to section 30-20-122 (1)(a)(V), C.R.S.; and
(III)(Deleted by amendment, L. 2008, p. 1323, § 8, effective May 27, 2008.)(IV) Purchases of machinery and machine tools, or parts thereof, used in the production of electricity in a facility for which a long-term power purchase agreement was fully executed between February 5, 2001, and November 7, 2006, whether or not such purchases are capitalized or expensed.

(b)

A parent corporation and all closely held subsidiary corporations, as defined in section 39-26-102 (10)(k), shall be considered one person for the purposes of this section and, as a group, shall be subject to the provisions of paragraph (a) of this subsection (1).

(c)

As used in this subsection (1):

(I)

“Long-term power purchase agreement” means an agreement executed between one or more independent power producers and a provider of retail electric service for a term of no less than ten years, pursuant to which the independent power producer or producers agree to sell all of the production offered for sale from a particular power generation facility for a specified price over a specified term.

(II)

“Machinery” means any apparatus consisting of interrelated parts used to produce an article of tangible personal property. The term includes both the basic unit and any adjunct or attachment necessary for the basic unit to accomplish its intended function.

(III)

“Manufacturing” means the operation of producing a new product, article, substance, or commodity different from and having a distinctive name, character, or use from raw or prepared materials, including the processing of recovered materials.

(III.5)

Intentionally left blank —Ed.

(A)

“Recovered materials” means those materials that have been separated, diverted, or removed from the waste stream for the purpose of remanufacturing, reuse, or recycling or, as allowed by subsection (1)(c)(III.6) of this section, those materials that have been derived from scrap metal or end-of-life-cycle metals for remanufacturing, reuse, or recycling into new metal stock that meets applicable standards for metal commodities sales.

(B)

As used in this subsection (1)(c)(III.5), “applicable standards” means standards for recycled commodities recognized by the institute of scrap recycling industries.

(III.6)

“Scrap metal processor” means any person who is engaged in the business of processing scrap metals who, from a fixed location, utilizes machinery and equipment for manufacturing ferrous and nonferrous metallic scrap into prepared grades and whose principal product is metallic scrap. The following items are exempt when purchased by a scrap metal processor and used in manufacturing prepared grade recycled metals: Mobile metal shears, stationary metal shears, metal shredders, conveyors used to move metal scrap or stock, loaders utilized to load metal scrap or stock, bailers to bundle metal stock, material handlers utilized for metal scrap or metal stock, excavators, magnets, grapples and torches utilized to break down metal scrap, and all other equipment directly used predominantly in the manufacturing of commodity grade recycled metals.

(IV)

“Specified price” means a price set by a long-term power purchase agreement that is not dependent on either the cost of production or the market price of electricity; except that a specified price may provide for a percentage increase over time so long as the percentage increase is specified in the original long-term power purchase agreement and is also not dependent on either the cost of production or the market price of electricity.

(d)

For purposes of this subsection (1), direct use in manufacturing is deemed to begin for items normally manufactured from inventoried raw material at the point at which raw material is moved from plant inventory on a contiguous plant site and to end at a point at which manufacturing has altered the raw material to its completed form, including packaging, if required. Machinery used during the manufacturing process to move material from one direct production step to another in a continuous flow and machinery used in testing during the manufacturing process is deemed to be directly used in manufacturing.

(e)

In order to qualify for the exemption provided in this subsection (1), a purchase shall be of such nature that it would have qualified for the investment tax credit against federal income tax as was provided by section 38 of the federal “Internal Revenue Code of 1954”, as amended.

(f)

An exemption may not be claimed under this section for sales tax paid in another state that is credited against Colorado sales tax or use tax or both.

(g)

Unless the department of revenue determines pursuant to section 39-26-730 (2) that the declaration can be consolidated with another form or eliminated, to receive an exemption under this subsection (1), a declaration of entitlement shall be filed by the purchaser with the vendor of the machinery or machine tools, or parts thereof, and with the executive director of the department.

(2)

Effective July 1, 1979, the storage, use, or consumption of machinery or machine tools, or parts thereof, exempt from sales tax by subsection (1) of this section shall be exempt from taxation under the provisions of part 2 of this article.

Source: Section 39-26-709 — Machinery and machine tools - definitions, 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

§ 39-26-709’s source at colorado​.gov