§ 53-26. Exemptions.

There shall be exempt from taxation under the provisions of this article the following:

(1)

All sales to the United States government, to the state, its departments and institutions, and the political subdivisions thereof only when purchased in their governmental capacities.

(2)

All sales to charitable organizations that are:

a.

Billed directly to the charitable organization;

b.

Paid directly from funds of the charitable organization; and

c.

Used exclusively for the charitable organization's organizational or operational purposes.

(3)

All sales of cigarettes.

(4)

All sales of motor fuel and special fuel.

(5)

All sales of cattle, sheep, lambs, swine and goats; all sates of mares and stallions for breeding purposes.

(6)

All sales of feed for livestock or poultry and all sales of seeds to farmers, ranchers, truck farmers, florists and horticulturists who sell the crops resulting from the propagation of such seeds or use such crops as feed for livestock or poultry.

(7)

All sales of medical supplies.

(8)

All sales of food.

(9)

All sales of tangible personal property to a purchaser residing or doing business outside the city, where delivery is made to the purchaser's residence or business address outside the city by the vendor; on the vendor's vehicle; by common, contract, or commercial carrier that is hired by the vendor, or by mail.

(10)

All sales which the city is prohibited from taxing under the Constitution or laws of the United States or the Constitution of the state.

(11)

All sales of automotive vehicles as defined in this article that are registered and required by state law to be registered outside the city.

(12)

All sales of farm equipment used directly for plowing, planting, cultivating or harvesting of crops.

(13)

All sales of tangible personal property for use in improving real property outside the city only in the amount and to the extent that a use tax has been or will be paid in respect to the proposed use of such property to a municipal corporation organized and existing under the authority of the laws or the constitution of any state, if the purchaser presents to the retailer a building permit or other documentation acceptable to the manager showing that a use tax has been or will be paid to the municipality in which the real property is located.

(14)

All sales of tangible personal property to a natural gas and electric utility or a telephone utility for use in its business operations outside the city, even though the property is delivered and temporarily stored within the city.

(15)

All sales of machinery, tools, and equipment, including replacement parts, to a transportation utility to be used by the utility in the operation of an equipment maintenance facility and at an industrial building:

a.

That is located in the city within an enterprise zone designated as such pursuant to state law;

b.

That contains at least one million (1,000,000) square feet of enclosed, useable floor space on a single level;

c.

That serves as a regular place of work and for reporting for duty for at least two thousand (2,000) employees in the third year of operations of the maintenance facility and continually thereafter; and

d.

That is operated by an interstate carrier for hire primarily for maintaining, rebuilding or repairing equipment moving in interstate commerce.

This exemption may be applicable to the first and second years of operations at the industrial building provided that the utility establishes a reserve account for the tax for its return to the city at the end of the third year of operations should less than two thousand (2,000) employees be employed at the facility in said third year.

(16)

All sales of construction materials for use in the construction, reconstruction or remodeling of a new industrial building of a transportation utility to be used by the utility for an equipment maintenance facility:

a.

That is located in the city within an enterprise zone designated as such pursuant to state law;

b.

That is designed to contain at least one million (1,000,000) square feet of enclosed, useable floor space on a single level;

c.

That serves as a regular place of work and for reporting for duty for at least two thousand (2,000) employees in the third year of operations of the maintenance facility and continually thereafter; and

d.

That is operated by an interstate carrier for hire primarily for maintaining, rebuilding or repairing equipment moving in interstate commerce.

This exemption may be applicable to the design and construction phases of the new facility and to the first and second years of operations at the facility provided that the utility establishes a reserve account for the tax for its return to the city at the end of the third year of operations should less than two thousand (2,000) employees be employed at the facility in said third year.

(17)

All sales of prepress preparation materials.

(18)

All sales made to, billed directly to, and paid for directly by, qualified hospital organizations (as defined in paragraph a. of this subsection (18)), provided that the property or service purchased by the qualified hospital organization is employed in furtherance of an exempt function (as defined in paragraph b. of this subsection (18)).

a.

For purposes of this subsection (18), a "qualified hospital organization" is 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, C.R.S. (2000), as amended, including any successor provisions to those sections, and operates a general hospital;

2.

A corporation or trust that:

a.

Is exempt from federal income tax under section 501 (c)(3) of the United States Internal Revenue Code of 1986, as amended; and

b.

Owns or employs personal property or improvements that are used in the operations of one (1) or more organizations described in subparagraph 1.a. of this subsection (18); and

c.

Either (i) directly controls, or is controlled by, one (1) or more organizations described in subparagraph a.1. of this subsection (18), (ii) is controlled by a management organization as defined in subparagraph a.3. of this subsection (18) in common with one (1) or more organizations described in subparagraph a.1. of this subsection (18), or (iii) owns a hospital that is licensed to operate as a "general hospital" for people pursuant to sections 25-3-101 and 25-3-102, C.R.S. (2000), as amended, including any successor provisions to those sections, and that is operated by an organization described in subparagraph 1.a. of this subsection (18).

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 subparagraphs 1. or 2. of this paragraph a.; 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 subparagraphs 1., 2., or 3. of this paragraph a.

b.

For purposes of this subsection (18):

1.

Except as provided in subparagraph 3. of this paragraph b., "employed in furtherance of an exempt function" means employed by a qualified hospital organization in an activity from which none of the proceeds are treated as unrelated business income.

2.

"Unrelated business income" means gross income derived from any unrelated trade or business within the meaning of section 512 of the United States Internal Revenue Code of 1986, as amended.

3.

If the sale of any property or service would be exempt under this subsection (18) but for the fact that the property or service is employed in an activity from which a portion of the proceeds is treated as unrelated business income, the manager of finance is authorized to approve written formulas or methodologies (including formulas or methodologies of individual qualified hospital organizations) as may be appropriate and reasonable to determine, based on the evidence available, the percentage of the proceeds from such activity that is not treated as unrelated business income. This calculated percentage shall be the percentage of the cost of such property or service that will be exempt under this subsection (18). The manager of finance may condition approval of formulas and methodologies on receipt of such information as is reasonably deemed necessary for proper implementation of such formulas and methodologies.

(19)

All sales of aircraft to an airline company that is used in interstate commerce by the airline company.

(20)

All sales of water.

(21)

All sales of feminine hygiene products.

(Ord. No. 666-81, § 1, 12-14-81; Ord. No. 346-82, § 1, 6-14-82; Ord. No. 638-84, §§ 9, 10, 12-3-84; Ord. No. 679-87, §§ 4—7, 11-23-87; Ord. No. 73-91, §§ 1, 2, 1-28-91; Ord. No. 567-91, §§ 1—3, 8-5-91; Ord. No. 570-91, § 1, 8-5-91; Ord. No. 922-91, §§ 6—8, 12-9-91; Ord. No. 550-92, § 3, 8-10-92; Ord. No. 516-01, § 1, 6-25-01; Ord. No. 262-07, § 2, 6-11-07; Ord. No. 775-07, § 93, 12-26-07; Ord. No. 36-12, § 1, 1-9-12; Ord. No. 527-17, § 1, 6-26-17; Ord. No. 528-17, § 5, 6-26-17; Ord. No. 529-17, § 4, 6-26-17; Ord. No. 930-17, § 5, 9-18-17; Ord. No. 137-19, § 2, 3-26-19)

Case Law annotation— A federal contractor constructing an office building is subject to the sales tax on materials purchased out of state and incorporated into the federal office building. Temple v. Arthur Vennevi Company, 172 Colo. 105, 470 P. 2d 576 (1970).

Editor's Note

Ord. No. 137-19, § 1, adopted March 26, 2019, added section 53-26(21) which will be effective as of July 1, 2019.