39-26-713-3

• Library: Colorado Administrative Code
• Edition: 2023
• Currency: Current through Register Vol. 46, No. 3, February 10, 2023
• Citation: 39-26-713-3
• Year: 2023

Use tax is a complement to sales tax. Since sales tax is imposed only on retail sales, which are defined by rule as sales to the user or consumer of property or services sold, use tax shall not apply to the storage, use or consumption of tangible personal property purchased by a licensed retailer for resale within the regular course of a business.

Tangible personal property that was purchased tax free for resale or an ingredient of a manufactured or compounded product, and subsequently withdrawn from stock for the purchaser's own use or consumption, shall be taxed at the acquisition cost of all materials. The tax liability attaches at the time the tangible personal property is withdrawn from stock. The tax must be reported on the appropriate return provided by the Department.

The Act exempts a sale of tangible personal property which becomes an ingredient or component part of the product. To be exempt from the operation of the sales and use tax Acts, tangible personal property purchased by a manufacturer, which property enters into the processing of the manufactured article, must become a constituent part thereof, wholly or partially, either by chemical or mechanical means. (See Rule 39undefined39-26-102(20).) (Also see Western Electric v. Weed, Jr., 185 Colo. 340, 524 P.2d 1369 (1974) and Bedford v. Colorado Fuel & Iron Corp., 102 Colo. 538, 81 P.2d 752 (1938).

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Notes:

History: 37 CR 18, September 25, 2014, effective 10/15/2014

History: 38 CR 02, January 25, 2015, effective 2/14/2015

History: 39 CR 10, May 25, 2016, effective 6/14/2016

History: 40 CR 12, June 25, 2017, effective 7/15/2017

History: 40 CR 23, December 10, 2017, effective 1/1/2018

History: 41 CR 13, July 10, 2018, effective 7/30/2018

History: 41 CR 14, July 25, 2018, effective...