Colo. Code Regs. 39-22-303.6-13

Current through Register Vol. 47, No. 23, December 10, 2024

Rule 39-22-303.6-13 - Special Rules

Basis and Purpose. The bases of this rule are §§ 39-21-112, 39-22-301, 39-22-303, and 39-22-303.6, C.R.S. The purpose of this rule is to provide guidance for determining which gross receipts from sales of certain property are included in a taxpayer's receipts factor. Consistent with the General Assembly's adoption of § 39-22-303.6, C.R.S., these rules are intended to conform the state's income tax laws to the Multistate Tax Commission's model statute and regulation except when those model provisions are inconsistent with Colorado statute. See 2018 Colo. Sess. Laws, ch. 369, § 1(2).

(1)Software Transactions. A license or sale of pre-written software for purposes other than commercial reproduction (or other exploitation of the intellectual property rights) transferred on a tangible medium is treated as the sale of tangible personal property, rather than as either the license or sale of intangible property or the performance of a service. In these cases, the receipts are in Colorado as determined under the rules for the sale of tangible personal property set forth under § 39-22-303.6(5), C.R.S., and Rule 39-22-303.6 -6. In all other cases, the receipts from a license or sale of software are to be assigned to Colorado as determined otherwise under Rules 39-22-303.6 -7 through-13 (e.g., depending on the facts, as the development and sale of custom software, see paragraph (3) of Rule 39-22-303.6 -10; as a license of a marketing intangible, see paragraph (2) of Rule 39-22-303.6 -11; as a license of a production intangible, see paragraph (3) of Rule 39-22-303.6 -11; as a license of intangible property where the substance of the transaction resembles a sale of goods or services, see paragraph (5) of Rule 39-22-303.6 -11; or as a sale of intangible property, see Rule 39-22-303.6 -12).

(2)Sales or Licenses of Digital Goods or Services.

(a)In General. In the case of a sale or license of digital goods or services, including, among other things, the sale of various video, audio and software products or similar transactions, the receipts from the sale or license are assigned by applying the same rules as set forth in paragraph (3)(b)(ii) or (iii) of Rule 39-22-303.6 -10 as if the transaction were a service delivered to an individual or business customer or delivered through or on behalf of an individual or business customer. For purposes of the analysis, it is not relevant what the terms of the contractual relationship are or whether the sale or license might be characterized, depending upon the particular facts, as, for example, the sale or license of intangible property or the performance of a service. See paragraph (5) of Rule 39-22-303.6 -11 or paragraph (1)(c) of Rule 39-22-303.6 -12.

(b)Telecommunications Companies. In the case of a taxpayer that provides telecommunications or ancillary services, and that is thereby subject to 1 CCR 201-2, Special Rule 8A, receipts from the sale or license of digital goods or services not otherwise assigned for apportionment purposes pursuant to that rule are assigned pursuant to this paragraph (2)(b) by applying the rules set forth in paragraphs (3)(b)(ii) or (iii) of Rule 39-22-303.6 -10 as if the transaction were a service delivered to an individual or business customer or delivered through or on behalf of an individual or business customer. However, in applying these rules, if the taxpayer cannot determine the state or states where a customer receives the purchased product, it may reasonably approximate this location using the customer's "place of primary use" of the purchased product, applying the definition of "place of primary use" set forth in 1 CCR 201-2, Special Rule 8A.

39-22-303.6-13

Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/14/2014

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

37 CR 19, October 10,2014, effective 10/30/2014

37 CR 22, November 25, 2014, effective 12/16/2014

38 CR 04, February 25, 2015, effective 3/17/2015

38 CR 07, April 10, 2015, effective 4/30/2015

38 CR 11, June 10, 2015, effective 6/30/2015

38 CR 22, November 25, 2015, effective 12/15/2015

38 CR 24, December 25, 2015, effective 1/14/2016

38 CR 24, December 25, 2015, effective 1/19/2016

39 CR 01, January 10, 2016, effective 1/30/2016

39 CR 16, August 25, 2016, effective 9/14/2016

40 CR 08, April 25, 2017, effective 5/15/2017

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

40 CR 16, August 25, 2017, effective 9/14/2017

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

41 CR 14, July 25, 2018, effective 8/14/2018

41 CR 20, October 25, 2018, effective 11/14/2018

42 CR 02, January 25, 2019, effective 12/18/2018

42 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/2019

42 CR 06, March 25, 2019, effective 4/14/2019

43 CR 04, February 25, 2020, effective 3/16/2020

43 CR 13, July 10, 2020, effective 6/2/2020

43 CR 17, September 10, 2020, effective 9/30/2020

44 CR 03, February 10, 2021, effective 3/2/2021

44 CR 07, April 10, 2021, effective 4/30/2021

44 CR 08, April 25, 2021, effective 5/15/2021

45 CR 01, January 10, 2022, effective 1/30/2022

45 CR 04, February 25, 2022, effective 3/17/2022

45 CR 05, March 10, 2022, effective 3/30/2022

46 CR 11, June 10, 2023, effective 5/2/2023

46 CR 09, May 10, 2023, effective 5/30/2023