§ 53-97. Exemptions.

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

(1)

All purchases by or 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 purchases or sales of cigarettes.

(4)

All purchases or sales of motor fuel and special fuel.

(5)

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

(6)

All purchases or 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 purchases or sales of medical supplies.

(8)

All purchase or sales of food.

(9)

All purchases or sales of tangible personal property purchased outside the city for use, storage, distribution or consumption outside the city by a nonresident of the city while the property is temporarily within the city for the purchaser's own personal use, storage or consumption.

(10)

All purchases or sales of tangible personal property to a natural gas and electric utility or a telephone utility that is not used, consumed or distributed in the city but is for use, consumption or distribution in its business operations outside the city even though the property is delivered and temporarily stored within the city.

(11)

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

(12)

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

(13)

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

(14)

All purchases or sales of tangible personal property, products, and services taxable under the city retail sales tax article, article II of this chapter, upon which a sales tax has been paid to the city.

(15)

All purchases or sales of construction materials for their storage in the city; but any use, consumption or distribution beyond storage of the construction and building materials in the city shall be taxable.

(16)

All purchases or 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.

(17)

All purchases or 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.

(18)

All sales of prepress preparation materials.

(19)

All purchases or sales of tangible personal property (excepting (a) construction equipment, tools and machinery; (b) construction materials; and (c) vehicles that are capable of moving themselves, or of being moved from place to place upon wheels or endless tracks, excluding bicycles and other devices moved by human power and excluding "farm equipment" used directly for plowing, planting, cultivating or harvesting of crops) that are first used, stored, consumed or distributed within the city more than one (1) year after the most recent sale of the property if, within the year following such sale, the property has been used in a significant way outside the city for the principal purpose for which it was most recently purchased.

(20)

All purchases or sales made to, billed directly to, and paid for directly by, qualified hospital organizations (as defined in paragraph a. of this subsection (20)), 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 (20)).

a.

For purposes of this subsection (20), 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;

b.

Owns or employs personal property or improvements that are used in the operations of one (1) or more organizations described in subparagraph a.1. of this subsection (20); and

c.

Either (i) directly controls, or is controlled by, one (1) or more organizations described in subparagraph a.1. of this subsection (20), (ii) is controlled by a management organization as defined in subparagraph a.3. of this subsection (20) in common with one (1) or more organizations described in subparagraph a.1. of this subsection (20), 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 a.1. of this subsection (20).

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 (20):

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 (20) 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 (20). 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.

(21)

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

(22)

The use of tangible personal property which was originally purchased at wholesale and which is subsequently removed from inventory or taken out of a manufacturing or compounding process and donated without consideration to any of the following:

a.

The United States government, to the state, its departments and institutions and the political subdivisions thereof; or

b.

Any organization which has been certified as a not-for-profit organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and which is also operated as a Colorado nonprofit corporation.

(23)

All purchases or sales of water.

(24)

All purchases or sales of feminine hygiene products.

(Ord. No. 667-81, § 1, 12-14-81; Ord. No. 637-84, § 15, 12-3-84; Ord. No. 680-87, § 5, 11-23-87; Ord. No. 568-91, §§ 2, 3, 8-5-91; Ord. No. 571-91, § 1, 8-5-91; Ord. No. 923-91, §§ 6—9, 12-9-91; Ord. No. 551-92, § 3, 8-10-92; Ord. No. 595-93, § 1, 8-2-93; Ord. No. 517-01, § 1, 6-25-01; Ord. No. 262-07, § 4, 6-11-07; Ord. No. 775-07, § 101, 12-26-07; Ord. No. 754-09, § 1, 12-14-09; ; Ord. No. 527-17, § 2, 6-26-17; Ord. No. 528-2017, § 16, 6-26-17; Ord. No. 529-17, § 6, 6-26-17; Ord. No. 930-17, § 7, 9-18-17; Ord. No. 137-19, § 4, 3-26-19)

Editor's Note

Ord. No. 137-19, § 1, adopted March 26, 2019, added section 53-97(21) which will be effective as of July 1, 2019.