Colorado

Agency: Dept. of Revenue

Contact Person/Department: Bruce Nelson, Manager of Tax Policy, Taxpayer Service

Tel. No.: (303) 866-6260

Fax No.: (303) 866-3211

E-mail: bnelson@spike.dor.state.co.us

Other Contacts: The Colorado Dept. of Revenue web site has links to home pages of many Colorado County Governments and Colorado Municipal Governments. This is also the site to find the Colorado form for registering as a Tax Exempt Organization, DR-0715, or for a sales tax license application, form CR-0100. You can also find the current DR-1002, which lists sales tax rates for all Colorado jurisdictions and contact telephone numbers for cities that self-collected their sales tax.

1. If your State exempts fundraising sales by certain groups from sales or use taxes, please indicate which of the following are exempt in your State.

   Public Schools (K-12)

   Private Schools (K-12)

   School Groups (e.g., clubs, bands, teams)

   PTAs

   PTOs

   Other parent groups

   (please identify)

   Church Groups

   Youth Sports League

   501 (c)(3) organizations

   501 (c)(6) organizations

   Other (specify:__________________)

   Charitable organizations which hold IRC section 501(c)(3) qualification letters and have a Colorado Tax Exempt Organization certificate may be exempt from collecting sales tax during certain fund raising events. The events must be less than 12 days in any year and generate less than $25,000 in net proceeds, or be selling food items exempt as groceries for home consumption. See: DR-0715 for the tax exempt organization registration form.

   [Non-profit private or public schools may directly (not through a vendor) sell meals to students and faculty, in an area restricted to students and faculty, without collecting sales tax.]

   Other tax-exempt organizations (including non-profits, governmental entities and schools) that sell tangible personal property (for example, through a secondhand store, fund-raiser sales event or routine sales of organization-related items) must obtain a sales tax license and collect all applicable state and local taxes. Colorado expects to adopt the Multistate Tax Commission model regulation on fund raising activities, however this will just be applicable for Colorado and Colorado-collected sales taxes. This regulation will allow these entities which would otherwise be required to collect a tax on their sales transactions to instead be taxed on the cost of the items sold. To operate in this manner the organization should not get a sales tax license, but must verify tax is paid on cost of purchases through either of the following procedures: the purchase price can be taxed by having a supplier collect the Colorado and local sales tax, or the organization can remit state and appropriate local sales tax on cost of items sold directly to the Department, for Department-collected tax.

1a Are local sales and use taxes in your State applied to these groups in the same manner as State sales and use taxes are applied to these groups?

No

(i) Special Districts: Do conform to state practice.
(ii) State collected city/county: Most do not have the 12-day/$25,000 event exception, and many of these governments also apply sales tax to groceries. Thus local tax may be due, even where state tax is exempted.
(iii) Self Collected City Sales Taxes: Practices may be unique, none follow state 12-day/$25,000 event exemption.

1b Please set forth any comments including a list of groups not listed above whose fundraising activities are exempt from sales and use taxation in your State.

 

2. If your State exempts fundraising sales of certain products from sales and use tax, please indicate which of the following products are exempt.

   No special product exemptions.

   2a Are local sales and use taxes in your State applied to these products in the same manner as State sales and use taxes are applied to these products?

   If state-collected local taxes, yes.

   If home rule city, may be different.

   2b Please set forth any comments including a list of products not listed above that are exempt from sales and use taxation for fundraising purposes in your State.

    

3. If some or all fundraising groups or products qualify for exemption from sales and use tax in your State, please indicate any exceptions to or limitations on such exemptions. (Check all that apply and specify the limitation.)

   As of Jan. 1, 1998, the Department of Revenue interprets 39-26-718 C.R.S. as follows:

   If the charitable organization conducts sales for a total of 12 days or less during a calendar year and the net proceeds from all these events do not exceed $25,000 in that calendar year, the sales are not subject to sales tax. (Net proceeds is total gross events receipt(s) less expenses attributable to the event(s).) However, if sales are conducted more than 12 times in a calendar year, all sales are subject to state, Regional Transportation District (RTD), Scientific and Cultural Facilities District (SCFD), Football District (FD) taxes and state administered local taxes. For example, if the charitable organization chooses to conduct sales on a thirteenth day during the calendar year, the entire amount of gross sales is subject to sales tax. If, however, a charitable organization makes more than $25,000 in net proceeds during a calendar year, it may make the sales that generate the first $25,000 in net proceeds without registering with the department or collecting sales tax. As soon as the organization reaches $25,000 in net proceeds, it must obtain a sales tax license from the department and begin collecting sales tax.

   Charitable organizations should contact their local government to find out if a similar exemption is allowed for local taxes. For local tax rates in cities and counties where the state administers the tax, organizations may refer to the publication "Colorado Sales/Use Tax Rates" (DRP1002)

   If the local jurisdiction is a state-collected tax jurisdiction that does not allow the exemption, the charitable organization should obtain a Colorado sales tax license so that the organization can report and pay local tax to the department.

4. If some or all fundraising groups qualify for exemption from sales and use tax in your State, please set forth the procedure through which a group may establish its qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

   See 1.

    

5. If some or all fundraising products qualify for exemption from sales and use tax in your State, please set forth the procedure for establishing a product’s qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

    

6. In instances where a fundraising product or group is not exempt from sales or use tax, please indicate who bears the responsibility for collecting and remitting the tax.

   The organization(s) involved bear responsibility for collecting and remitting the tax, however that does not remove the responsibility for tax collection on suppliers who sell to organizations when the purchasing organizations do not have sales tax licenses (Colorado's resale permit is the sales tax license).

7. In instances where a fundraising product or group is not exempt from sales or use tax, what is the basis for calculating the sales/use tax?

   The basis for calculating the sales/use tax is the purchase price. See §39-26-102(7) C.R.S. (Some exceptions may apply.)

8. Provide any additional information regarding the sales and use tax treatment of fundraising transactions and/or groups in your State. Also set forth any statements, disclosures, disclaimers, etc., to be provided as part of the clearinghouse regarding your state’s practices and procedures. Attach additional sheets if necessary.

   For further details see the following FYIs (For Your Information): Sales 2 – Sales Tax Exempt Status for Charitable Organizations: Application Requirements; and Sales 3 – Out-of-State Tax-Exempt Organizations Doing Business in Colorado. See also the following statutes and accompanying regulations: §§39-26-102(2.5); 39-26-704(4); and 39-26-718 C.R.S. All statutes, regulations, forms, and publications can be found at www.taxcolorado.com.

Last Updated: September 2005