Colorado § 39-26-704 - Miscellaneous sales tax exemptions - governmental entities - hotel residents - schools - exchange of property.

§ 39-26-704. Miscellaneous sales tax exemptions - governmental entities - hotel residents - schools - exchange of property.

(1) All sales to the United States government and to the state of Colorado, its departments and institutions, and the political subdivisions thereof in their governmental capacities only shall be exempt from taxation under the provisions of part 1 of this article.

(1.5) All transactions specified in section 29-4-227 (1), C.R.S., are exempt from taxation under the provisions of parts 1 and 2 of this article.

(2) There shall be exempt from taxation under the provisions of part 1 of this article 26 all sales that the state of Colorado is prohibited from taxing under the constitution or laws of the United States or the state of Colorado.

(3) (a) There shall be exempt from taxation under the provisions of part 1 of this article 26 all sales and purchases of commodities and services under the provisions of section 39-26-102 (11) to any natural person who is a permanent resident of any hotel, apartment hotel, lodging house, motor hotel, guesthouse, guest ranch, trailer coach, mobile home, auto camp, or trailer court or park and who enters into or has entered into a written agreement for occupancy of a room or accommodations for a period of at least thirty consecutive days during the calendar year or preceding year.

(b) Notwithstanding any provision of law to the contrary, on or after January 1, 2021, for any local government or political subdivision of the state that levies a sales or use tax based on the sales or use tax levied by the state pursuant to this article 26, all sales and purchases of commodities and services under the provisions of section 39-26-102 (11) to any occupant who is a permanent resident of any hotel, apartment hotel, lodging house, motor hotel, guesthouse, guest ranch, trailer coach, mobile home, auto camp, or trailer court or park and who enters into or has entered into a written agreement for occupancy of a room or accommodations for a period of at least thirty consecutive days during the calendar year or preceding calendar year shall be exempt from the sales or use tax of such local government or political subdivision, unless the local government or political subdivision expressly subjects such sale to its sales or use tax for the applicable period at the time of adoption of its initial sales or use tax ordinance or resolution or subsequent amendment thereto.

(4) All sales made to schools, other than schools held or conducted for private or corporate profit, shall be exempt from taxation under the provisions of part 1 of this article.

(5) There shall be exempt from taxation under the provisions of part 1 of this article all transactions specified in section 39-26-104 (1)(b)(I) in which the fair market value of the exchanged property is excluded from the consideration or purchase price because the exchanged property is covered by section 39-26-104 (1)(b)(I)(A) or (1)(b)(I)(B), and in which, because there is no additional consideration involved in the transaction, there is no purchase price within the meaning of section 39-26-102 (7).

Source: L. 2004: Entire part added with relocations, p. 1018, § 2, effective July 1. L. 2016: (1.5) added, (HB 16-1006), ch. 177, p. 610, § 3, effective August 10. L. 2020: (2) amended, (HB 20-1182), ch. 58, p. 198, § 2, effective September 14; (3) amended, (HB 20-1020), ch. 53, p. 185, § 2, effective September 14.

Editor's note: The provisions of this section are similar to several former provisions of § 39-26-114 as they existed prior to 2004. For a detailed comparison, see the comparative tables located in the back of the index.

Cross references: For the legislative declaration in HB 16-1006, see section 1 of chapter 177, Session Laws of Colorado 2016. For the legislative declaration in HB 20-1020, see section 1 of chapter 53, Session Laws of Colorado 2020. For the legislative declaration in HB 20-1182, see section 1 of chapter 58, Session Laws of Colorado 2020.

ANNOTATION

Annotator's note. Since § 39-26-704 is similar to § 39-26-114 and § 39-26-203 as they existed prior to their 2004 repeal and relocation to this part 7, relevant cases construing those provisions have been included in the annotations to this section.

Law reviews. For article, "Home Rule Use-Tax Credits and Interstate Multi-Jurisdictional Transactions", see 30 Colo. Law. 79 (May 2001). Law reviews. For article, "Affordable Housing Tax Exemptions in Colorado", see 54 Colo. Law. 32 (Dec. 2025).

Sales to governmental agencies exempt only when used in governmental capacity. Sales to the United States government and to the state of Colorado, its departments, institutions, and political subdivisions thereof, are exempt under the provisions of the sales and use tax only where they are to be used by them in their "governmental capacities". Sec. Life & Accident Co. v. Heckers, 177 Colo. 455, 495 P.2d 225 (1972).

Governmental exemption not applicable to independent contractor. This section does not embrace a contractor which is neither a branch, agency, or alter ego of the United States government, but merely an independent contractor under contract with the United States government. Temple v. Arthur Venneri Co., 172 Colo. 105, 470 P.2d 576 (1970).

Reimbursement of taxes to contractor cannot exempt sale. The mere fact that a municipality reimburses a private contractor for taxes does not establish that a sale of goods was made to the municipality and is thus exempt from taxes under subsection (1)(a). Weed v. City of Pueblo, 197 Colo. 52, 591 P.2d 80 (1979).

Insurance companies do not fall within the classifications of the entities exempted under the sales and use tax. Sec. Life & Accident Co. v. Heckers, 177 Colo. 455, 495 P.2d 225 (1972).

No exemption for state chartered credit unions. No exemption as to payment of sales taxes is provided to state chartered credit unions. S.W. Catholic Credit Union v. Charnes, 665 P.2d 626 (Colo. App. 1982).

Railroad is exempt from the sales tax imposed by this section with respect to sales of food and beverages sold by the railroad to passengers on its line pursuant to subparagraph (1)(A)(III) of this section and § 40-20-109. Dept. of Rev. v. Durango & Silverton Narrow Gauge R.R. Co., 989 P.2d 208 (Colo. App. 1999).

City should have imposed sales tax on golf cart rentals because city acted in a proprietary capacity in renting golf carts. Since sales tax had not been collected, requiring city to pay use tax in lieu of sales tax was appropriate. Colo. Dept. of Rev. v. City of Aurora, 32 P.3d 590 (Colo. App. 2001).