Colo. Code Regs. 39-22-303.6-6
Current through Register Vol. 47, No. 23, December 10, 2024
Rule 39-22-303.6-6 - Sales of Tangible Personal Property in ColoradoBasis 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 tangible personal 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)General Rule. Gross receipts from sales of tangible personal property are in Colorado: (a) if the property is delivered or shipped to a purchaser within Colorado regardless of the f.o.b. point or other condition of sale; or(b) if the property is shipped from an office, store, warehouse, factory, or other place of storage in Colorado and the taxpayer is not taxable in the state to which the property is shipped.(2) Property is delivered or shipped to a purchaser within Colorado if the recipient is located in Colorado, even though the property is ordered from outside Colorado. (a)Example: The taxpayer, with inventory in State A, sold $100,000 of its products to a purchaser having branch stores in several states, including Colorado. The order for the purchase was placed by the purchaser's central purchasing department located in State B. $25,000 of the purchase order was shipped directly to purchaser's branch store in Colorado. The branch store in Colorado is the purchaser within Colorado with respect to $25,000 of the taxpayer's sales.(3) Property is delivered or shipped to a purchaser within Colorado if the shipment terminates in Colorado, even though the property is subsequently transferred by the purchaser to another state. (a)Example: The taxpayer makes a sale to a purchaser who maintains a central warehouse in Colorado at which all merchandise purchases are received. The purchaser reships the goods to its branch stores in other states for sale. All of the taxpayer's products shipped to the purchaser's warehouse in Colorado constitute property delivered or shipped to a purchaser within Colorado.(4) The term "purchaser within Colorado" shall include the ultimate recipient of the property if the taxpayer, at the designation of the purchaser, delivers to or has the property shipped to the ultimate recipient within Colorado.(a)Example: A taxpayer sold merchandise to a purchaser in State A. Taxpayer directed the manufacturer or supplier of the merchandise in State B to ship the merchandise to the purchaser's customer in Colorado pursuant to purchaser's instructions. The sale by the taxpayer is in Colorado.(5) When property being shipped by the taxpayer from the state of origin to a consignee in another state is diverted while en route to a purchaser in Colorado, the sales are in Colorado. (a)Example: The taxpayer, a produce grower in State A, begins shipment of perishable produce to the purchaser's place of business in State B. While en route, the produce is diverted to the purchaser's place of business in Colorado in which state the taxpayer is subject to tax. The sale by the taxpayer is attributed to Colorado.(6) If the taxpayer is not taxable in the state of the purchaser, the sale is attributed to Colorado if the property is shipped from an office, store, warehouse, factory, or other place of storage in Colorado. (a)Example: The taxpayer has its head office and factory in State A. It maintains a branch office and inventory in Colorado. Taxpayer's only activity in State B is the solicitation of orders by a resident salesperson. All orders by the State B salesperson are sent to the branch office in Colorado for approval and are filled by shipment from the inventory in Colorado. Since the taxpayer is immune under Public Law 86-272 from tax in State B, all sales of merchandise to purchasers in State B are attributed to Colorado, the state from which the merchandise was shipped.(7) If a taxpayer whose salesperson operates from an office located in Colorado makes a sale to a purchaser in another state in which the taxpayer is not taxable, and the property is shipped directly by a third party to the purchaser, the following rules apply: (a) If the taxpayer is taxable in the state from which the third party ships the property, then the sale is in that state.(b) If the taxpayer is not taxable in the state from which the third party ships the property, then the sale is in Colorado.(c)Example: The taxpayer in Colorado sold merchandise to a purchaser in State A. Taxpayer is not taxable in State A. Upon direction of the taxpayer, the merchandise was shipped directly to the purchaser by the manufacturer in State B. If the taxpayer is taxable in State B, the sale is in State B. If the taxpayer is not taxable in State B, the sale is in Colorado.Colorado Register, Vol 37, No. 14. July 25, 2014, effective 8/14/201437 CR 18, September 25, 2014, effective 10/15/201437 CR 19, October 10,2014, effective 10/30/201437 CR 22, November 25, 2014, effective 12/16/201438 CR 04, February 25, 2015, effective 3/17/201538 CR 07, April 10, 2015, effective 4/30/201538 CR 11, June 10, 2015, effective 6/30/201538 CR 22, November 25, 2015, effective 12/15/201538 CR 24, December 25, 2015, effective 1/14/201638 CR 24, December 25, 2015, effective 1/19/201639 CR 01, January 10, 2016, effective 1/30/201639 CR 16, August 25, 2016, effective 9/14/201640 CR 08, April 25, 2017, effective 5/15/201740 CR 12, June 25, 2017, effective 7/15/201740 CR 16, August 25, 2017, effective 9/14/201740 CR 23, December 10, 2017, effective 1/1/201841 CR 14, July 25, 2018, effective 8/14/201841 CR 20, October 25, 2018, effective 11/14/201842 CR 02, January 25, 2019, effective 12/18/201842 CR 02, January 25, 2019, effective 12/18/2018, expires 4/17/201942 CR 06, March 25, 2019, effective 4/14/201943 CR 04, February 25, 2020, effective 3/16/202043 CR 13, July 10, 2020, effective 6/2/202043 CR 17, September 10, 2020, effective 9/30/202044 CR 03, February 10, 2021, effective 3/2/202144 CR 07, April 10, 2021, effective 4/30/202144 CR 08, April 25, 2021, effective 5/15/202145 CR 01, January 10, 2022, effective 1/30/202245 CR 04, February 25, 2022, effective 3/17/202245 CR 05, March 10, 2022, effective 3/30/202246 CR 11, June 10, 2023, effective 5/2/202346 CR 09, May 10, 2023, effective 5/30/2023