130-157 Items exempt from taxation

Sec. 130-157. Items exempt from taxation.

The following sales of tangible personal property and taxable services are exempt from taxation under this division:

(1) Sales of automotive vehicles lawfully registered outside of the City.

(2) Sales of farm equipment to agricultural producers.

(3) Reserved.

(4) Sales of tangible personal property if both of the following conditions exist:

a. The sales are to those who are not residents of the City or those who are not doing business in the City; and

b. The articles purchased are to be delivered to the purchaser outside the City by common carrier or by the conveyance of the seller or by mail.

(5) Sales of gasoline and special fuel which are subject to the state gasoline and special fuel tax (C.R.S. § 39-27-101 et seq.).

(6) Sales of tangible personal property if both of the following conditions exist:

a. The sales are made to a purchaser engaged in manufacturing, processing, mining, construction or rail carrier business outside the City; and

b. Delivery of the articles sold is to be made to the purchaser at a point outside the City, or to the rail carrier if the rail carrier is the purchaser.

(7) All sales of food for home consumption, except such food as is expressly subject to taxation under subsections 130-156(4) and 130-156(12).

(8) All sales of food purchased with an electronic benefits transfer card issued pursuant to the supplemental nutrition assistance program, or any successor program, as defined by 7 U.S.C. § 2012, formerly known as food stamps.

(9) All sales of food purchased with funds provided by the special supplemental food program for women, infants, and children, as provided for in 42 U.S.C. § 1786.

(10) All sales to the United States government and to the state, their departments or institutions and the political subdivisions thereof, including the city and its departments, in their governmental capacities only.

(11) All sales to charitable organizations, in the conduct of their regular charitable functions and activities.

(12) All sales which the City is prohibited from taxing under the constitution or laws of the United States or the state.

(13) All sales of neat cattle, horses, sheep, lambs, swine and goats; all sales of mares and stallions for breeding purposes; and all items of tangible personal property sold at farm closeout sales to agricultural producers.

(14) All sales of feed for livestock or poultry, seeds, and orchard trees to agricultural producers.

(15) All sales of tangible personal property to a public utility company engaged in business in the city for use in its business operations outside the City, even though delivery thereof is made within the City.

(16) All sales of used factory-built housing on which state sales or use tax was paid on a prior purchase.

(17) Forty-eight percent of the purchase price of all sales of new factory-built housing or used factory-built housing upon the prior purchase of which state sales or use tax was not paid.

(18) All sales which are exempt under the terms of a letter of commitment issued pursuant to subsection 130-63(c).

(19) All sales of construction materials, if such materials are picked up by the purchaser and if the purchaser of such materials presents to the retailer a building permit or other documentation acceptable to the city evidencing that a local use tax has been paid or is required to be paid.

(20) Sales of prescription drugs for humans, prescription drugs for animals and prosthetic devices for humans which shall not include therapeutic devices.

(21) Sales of insulin in all its forms dispensed pursuant to the direction of a licensed practitioner of the healing arts, glucose to be used for the treatment of insulin reactions, diabetic urine- and blood-testing kits and materials, and insulin measuring and injecting devices.

(22) The sale of tangible personal property at retail or the furnishing of taxable services if the transaction was previously subjected to a municipal sales or use tax lawfully imposed on the purchaser equal to or greater than the applicable city sales tax.

(23) All sales of newspapers.

(24) Sales of tangible personal property to a person engaged in manufacturing or compounding for use, profit or sale, which tangible personal property meets all of the following conditions:

a. Is actually and factually transformed by the process of manufacturing;

b. Becomes, by the manufacturing processes, a necessary and recognizable ingredient component and constituent part of the finished product; and

c. Is, by its physical presence in the finished product, essential to the use thereof in the hands of the ultimate consumer.

The term "manufacturing" shall not include, without limitation, the preparation, baking, and cooking of food and beverages; the generation and distribution of electricity; or the extraction of raw materials from the earth through mining, quarrying, the sinking of wells, or any other process.

Such personal property, when not sold for resale, shall be deemed to have been sold at wholesale and shall be exempt from taxation under this division.

(25) Sales of exempt commercial packaging materials.

(26) All sales of recreation services by tax-exempt organizations.

(27) All sales of internet access services.

(28) All sales of machinery or machine tools, or parts thereof, in excess of $500.00 to be used in the city directly and predominantly in manufacturing tangible personal property, for sale or profit. For purposes of this subsection:

a. A parent corporation and all closely held subsidiary corporations shall be considered one person and, as a group, shall be subject to the provisions of this subsection.

b. 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.

c. In order to qualify for the exemption provided in this subsection, a sale must 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 Internal Revenue Code of 1954, as amended.

d. An exemption may not be claimed under this subsection for municipal sales tax paid in another state that is credited against city sales tax or use tax or both.

e. To receive an exemption under this subsection, a declaration of entitlement must be filed by the purchaser with the retailer of the machinery or machine tools or parts thereof and with the finance director.

(29) Sales of telecommunications service, if such service is provided to a customer whose place of primary use is outside the boundaries of the City. Telecommunication service does not include separately state non-transmission services which constitute computer processing applications used to act on the information to be transmitted.

(30) All sales that benefit a Colorado school, if the sale is made by any of the following:

a. A school;

b. An association or organization of parents and school teachers;

c. A booster club or other club, group, or organization whose primary purpose is to support a school activity; or

d. A school class or student club, group, or organization;

provided, however, that no such entity shall be regularly engaged in the business of selling commodities or services at retail.

(31) All sales by an association or organization of parents and teachers of students that is a charitable organization, if the association or organization uses the funds raised through the sale for the benefit of a school or an organized school activity or to pay the reasonable expenses of the association or organization; provided, however, that no such association or organization shall be regularly engaged in the business of selling at retail.

(32) All sales of precious metal bullion and collector coins.

(33) Health and athletic club memberships.

(34) All sales of menstrual care products.

(35) Diapers.

(36) Any government fees imposed directly on the purchaser and required to be held in trust by the imposing government and separately stated on the invoice provided to the purchaser at the time of sale. (Code 1979, § 36-77; Ord. No. 2022-45, § 1, 8-22-2022; Ord. No. 2022-16, § 2, 3-28-2022; Ord. No. 2021-64, § 5, 11-22-2021; Ord. No. 2021-09, § 2, 3-22-2021; Ord. No. 2019-64, § 1, 10-7-2019; Ord. No. 2017-13, § 21, 4-3-2017; Ord. No. 2013-14, § 2, 5-20-2013; Ord. No. 2012-20, § 3, 5-7-2012; Ord. No. 2011-01, § 11, 2-14-2011; Ord. No. 2009-55, § 2, 12-7-2009; Ord. No. 2003-20, § 4, 5-12-2003; Ord. No. 2000-134, § 2, 12-18-2000; Ord. No. 2000-133, § 2, 12-18-2000)