§ 98-70. Exempt sales.

There shall be exempt from taxation under the provisions of this article the items of sales and services including, but not limited to the following:

(1)

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

(2)

All sales to religious, charitable and eleemosynary corporations, in the conduct of the regular religious, charitable and eleemosynary functions and activities.

(3)

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

(4)

All sales of cigarettes.

(5)

All charges for lodging service as provided for in section 98-66(1)e. to any occupant who is a permanent resident and who enters into a written agreement for occupancy or use for a period of at least 30 consecutive days during the calendar year.

(6)

All sales of commodities, which are taxed under the provisions of the Colorado Motor Fuel Tax of 1933.

(7)

Newspapers as legally defined in C.R.S. § 24-70-102, as amended.

(8)

Every vendor selling items otherwise taxable, but exempted by C.R.S. § 39-26-114(7), as amended, for sales through vending machines shall pay the sales tax provided in section 98-66.

(9)

Additional provisions of exemption from the tax under this article:

a.

All sales of tangible personal property if both the following conditions exist: The sales are to those who reside or do business outside the city for their use outside the city and the article or commodity is delivered to the purchaser by common carrier, by mail or conveyed by the seller.

b.

All sales of tangible personal property to a public utility doing business both within and outside the city, for use in its business outside the city, even though sale and/or delivery thereof is made within the city.

c.

All sales of farm machinery, machinery parts, livestock, poultry, and livestock and poultry feeds and drugs, seeds and fertilizers to purchasers for use outside the city even though sale and/or delivery is made within the city, except that trucks of one ton manufactured rated capacity or less and lawn and garden tillers, mowers and renovators are not to be considered as farm machinery.

d.

All permits, licenses, service charges, fines and assessments, for benefit or penalty, charged by and in accordance with the Code.

e.

All sales of personal property, provided that such sales are infrequently conducted that the sale occurs at the residence of the owner, that the property to be sold was originally purchased for use by members of the household where such sale is being conducted, but not including sales conducted by a professional or compensated agent of the owner of the items to be sold. For purposes of this section, infrequent shall mean not exceeding a consecutive three-day period or a total of 21 days per calendar year.

f.

All sales by churches, clubs, lodges, parent-teacher associations, student organizations, youth organizations and organizations chartered by the state as nonprofit corporations, provided that such sales are infrequently conducted, that no regular place of sale is maintained and that all proceeds from such sales are used for the activities of the organization conducting the sale.

g.

Tangible personal property purchased or leased from a resident vendor by a person engaged within the city in the business of manufacturing for wholesale sale or compounding for wholesale sale, when such tangible personal property is:

1.

An article, substance or commodity which becomes an ingredient or component part of the product manufactured, which product is itself tangible personal property, and the container, label and shipping case thereof.

2.

Machinery and specific processing equipment and repair parts and replacements thereof, exclusively and directly used in manufacturing tangible personal property. The purchases must be capitalized to qualify for the exemption and each purchase order or invoice must be more than $500.00. There is no limit on the amount that can be exempt as long as the $500.00 minimum on each purchase is met.

h.

All sales of food purchased with food stamps or purchased with funds provided by the special supplemental program for women, infants and children. For this exemption, "food" shall be as defined in 7 USC 2012(g).

i.

Any sale or lease of research and development equipment in which the purchase price of each piece of equipment is $100.00 or more and the aggregate purchase price for all such pieces of equipment is over $1,000.00 annually. For purposes of determining purchase price, each piece of equipment shall be considered separately.

j.

All sales of construction materials (as defined in section 98-61) if such materials are picked up by the purchaser, and if the purchaser of such materials presents to the retailer a valid building permit evidencing that a local tax has been paid or will be paid. For construction materials used in the building, erection, alteration, or repair of structures, highways, roads, streets and other public works owned and used for an exempt organization, the general contractor constructing the project must obtain an exemption certificate from the state department of revenue for the project.

k.

The sales of commercial packaging materials (as defined in section 98-61).

l.

All sales of medical supplies, which include, insulin in all its forms dispensed pursuant to the direction of a licensed physician; glucose useable for treatment of insulin reactions; urine and blood-testing kits and materials; insulin measuring and injecting devices, including hypodermic syringes and needles; prosthetic devices; wheelchairs and hospital beds; drugs or materials when furnished by a doctor as part of professional services provided to a patient.

m.

All sales of prescription drugs for humans.

n.

All sales of prescription drugs for animals.

o.

All sales of prosthetic devices for humans.

p.

All sales of therapeutic devices if such a device, appliance or related accessory has a retail value of more than $100.00 and is sold in accordance with a written recommendation from a licensed doctor.

q.

All sales made to schools, other than schools held or conducted for private or corporate profit.

r.

Tangible personal property sold for rental or leasing inventory provided that such property is not otherwise used for customer demonstration or display.

s.

Nontaxable service sales. The amount equal to the consideration received for installation labor or services sold with tangible personal property, if such services are separately stated on the invoice from the tangible personal property sold; except that manufacturing or fabricating or other processing labor is never exempt.

t.

Recreation services.

u.

Security systems services.

v.

Sound system services.

w.

Custom software programs written specifically for the user and billed on an hourly labor basis are not taxable.

(10)

The city manager shall be authorized, in his or her discretion, to enter into agreements with persons engaged within the city in the business of manufacturing to effectuate the exemptions set forth in subsection (9)(g) above, whenever such an agreement will promote the best interest of the city. The city manager shall timely report any such agreement to city council verbally or in writing.

(Code 1981, § 31-45; Ord. No. 3783, § 2, 12-16-2002; Ord. No. 4317 , § 8, 3-5-2012; Ord. No. 4596 ; § 3, 6-19-2017; Ord. No. 4676 , § 1, 2-11-2019)