Exemptions on tax imposed
- ex-tax purchases
(2)Intentionally left blank —Ed.
(a)Dyed diesel fuel purchased to propel farm vehicles, when the same are being used on farms and ranches, farm tractors, and implements of husbandry only incidentally operated or moved on a highway, when operated off the public highways, and vehicles or construction equipment operated within the confines of highway construction projects when the same are actually being used in the construction of such highways is exempt from the excise tax imposed pursuant to this part 1. In accordance with section 39-27-104 (1)(d.5), dyed diesel fuel may be blended by a licensed distributor with biodiesel fuel after withdrawal at a terminal up to the maximum federally allowable blend. Such blended special fuel is exempt from the excise tax imposed pursuant to this part 1, so long as it is purchased for the purposes set forth in this subsection (2)(a). A person who purchases undyed special fuel for the purposes set forth in this subsection (2)(a) may, in accordance with section 39-27-103, apply to the department of revenue for a refund of the excise tax paid thereon.
(III)Intentionally left blank —Ed.
(A)Any governmental entity referred to in subsection (2)(b)(II) of this section may obtain an exemption certificate from the executive director of the department of revenue pursuant to subsection (3) of this section.
(B)A distributor may sell ex-tax gasoline or special fuel to a governmental entity with a valid exemption certificate, regardless of whether the special fuel is dyed pursuant to subsection (1.5) of this section.
(C)A governmental entity with a valid exemption certificate may sell to or purchase gasoline or special fuel from another governmental entity that also has a valid tax exemption certificate. The gasoline or special fuel must be used exclusively by the purchasing governmental entity in performing its governmental functions and activities in machines owned or operated by the governmental entity. A governmental entity is required to keep a copy of the fuel tax exemption certificate on file for any entity to which it resells or distributes fuel. A governmental entity that sells gasoline or special fuel pursuant to this subsection (2)(b)(III)(C) is not required to be a licensee pursuant to section 39-27-104. Sales authorized pursuant to this subsection (2)(b)(III)(C) are intended to facilitate intergovernmental efficiencies with respect to sales for individual vehicles or equipment. This subsection (2)(b)(III)(C) does not apply to intergovernmental sales in excess of five hundred gallons in a single transaction unless required for unusual, unforeseen, or emergency circumstances.
(D)In the case of gasoline or special fuel acquired by a governmental entity upon which the tax imposed by this part 1 was paid, the governmental entity may apply to the department of revenue for a refund of the excise tax paid thereon in accordance with section 39-27-103.
(c)Any person operating a vehicle other than a qualified motor vehicle pursuant to the motor fuel tax cooperative agreement entered into under part 3 of this article may bring into this state for the operation of such vehicle only the amount of special fuel that is in the ordinary fuel tank attached to such vehicle without being liable for the payment of the tax under this part 1.
(II)Gasoline used by domestic or foreign part 121 air carriers or part 135 commuter air carriers authorized to provide passenger and cargo air transportation services pursuant to the regulations of the office of the secretary of transportation and federal aviation administration of the United States department of transportation is exempt from the tax imposed pursuant to this part 1. For those air carriers that are certificated by the United States department of transportation for both part 121 air carrier operations and part 135 on-demand operations, the provisions of this subsection (2.5)(a)(II) shall not apply to the air carrier’s part 135 on-demand operations.
(III)Gasoline used by direct air carriers providing air transportation to authorized public charter operators pursuant to 14 CFR 380 is exempt from the tax imposed pursuant to this part 1.
(b)A distributor or terminal operator may sell ex-tax gasoline or special fuel to an air carrier described in this subsection (2.5). In the case of gasoline or special fuel acquired by an air carrier described in this subsection (2.5) upon which the tax imposed by this part 1 was paid, the air carrier may apply to the department of revenue for a refund of the excise tax paid thereon in accordance with section 39-27-103.
(c)Nothing in this subsection (2.5) exempts sales of aviation fuel from the sales tax imposed under article 26 of this title 39.
(II)A distributor may sell ex-tax gasoline or special fuel pursuant to subsections (2) and (2.5) of this section. The distributor may claim a credit against the tax accrued and payable for taxes due on ex-tax gasoline or special fuel or for taxes paid on ex-tax gasoline or special fuel by such distributor in a prior taxable period. If the distributor establishes that a tax was imposed and paid under this article 27 by a licensed distributor, special fuel is allowed as a credit on the distributor’s next return. To the extent the credit exceeds the tax due, the executive director of the department of revenue shall issue a refund of such excess. The manifest, bill of lading, invoice, or other similar document issued by the supplier, importer, or distributor must state that the gasoline or special fuel is sold on an ex-tax basis.
(c)With each sale of gasoline or special fuel made without payment of the tax pursuant to this subsection (3), the distributor shall secure evidence that the user is exempt from tax under this section.
(d)A distributor has the burden of proving that gasoline or special fuel is exempt from tax pursuant to this section. The department of revenue may prescribe reasonable requirements of proof for the exemption.
(9)Compressed natural gas used to propel a motor vehicle on the highways of this state that is supplied to the user at a residential home is exempt from the special fuel tax imposed by this article.
(10)Gasoline or special fuel removed from a terminal by a licensed exporter exclusively for delivery to another state is exempt from the tax imposed by this part 1.
Section 39-27-102.5 — Exemptions on tax imposed - ex-tax purchases - definition,
https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-39.pdf (accessed Oct. 20, 2023).