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State eliminates select sales and use tax exemptions

Recent legislative changes have eliminated the state sales and use tax exemption for certain items.

These changes were developed by lawmakers to help balance Colorado’s budget. Effective on the dates shown below, sales or purchases of any of the items listed will be subject to the 2.9 percent Colorado state sales tax.

Retailers will be required to collect and remit the state sales tax, in addition to any local sales taxes already in effect on the items.

Effective May 1, 2010, candy and soft drinks (soda pop), including candy and soft drinks sold in vending machines, are no longer exempt from Colorado sales tax.

Effective March 1, 2010, the following items are no longer exempt from Colorado sales tax.

• Nonessential items related to sales of food and beverages.

• Energy used for industrial and other related purposes.

• Standardized computer software.

• Agricultural compounds and pesticides.

• Materials used in direct mail advertising.

Refer to the Colorado Taxation Web site, www.TaxColorado.com under “News and Announcements,” or see the “Sales Tax” page for more information.

Retailers will use the “Colorado Sales Tax Return” (form DR 0100) to report the state tax collected.

The Colorado Department of Revenue has mailed a letter to all businesses that have a Colorado sales tax account, informing them of these changes.

Colorado sales and use tax forms and information are available at www.TaxColorado.com.