TR 34: Public Utilities

The retail sale of gas, electricity and other fuels for any purpose are subject to sales/use tax, unless the sale is to a properly licensed charitable, religious or governmental entity. The retail sale is taxable whether sold for residential, commercial or industrial use and whether furnished by a municipal, public or private corporation.

The energy sold by the above, when used by a manufacturer, is considered to be used in the manufacturing process and to not be a component of the finished product. Therefore, the energy would not meet the resale exemption and would be subject to sales/use tax. The State of Colorado does exempt the use of some energy producing products when used for industrial purposes, see the State of Colorado FYI - Sales Tax Exemption on Industrial Utility Usage and Special Regulation - Gas and Electrical Services for detail. The City of Boulder does not have such an exemption.

Gasoline and aviation gasoline (see section 39-27-101 C.R.S.) fuels are not subject to City sales/use tax. However, if these special fuels are used for a purpose other than that stated in the Colorado Revised Statutes, they would be subject to sales/use tax. Aviation jet fuels (section 39-27-111 C.R.S.) are subject to Boulder sales/use tax. "Special Fuel," defined at (subsection 39-27-101(29) C.R.S.) is subject to Boulder sales/use tax unless excise tax has been charged and paid in accordance with (39-27-102 C.R.S.).

Examples:

1. A Boulder manufacturer pays $15,000.00 for electricity to run its plant. The full amount is subject to sales/use tax for the City of Boulder, but the State of Colorado allows for a credit for part of the electricity.
   
   
2. A Boulder gas station sells 10 gallons of gasoline, a candy bar and a soft drink. The gas station must collect sales tax on the sale of the candy bar and soft drink, but the gasoline is exempt from sales tax.

Last Updated on Wednesday, 11 July 2012 12:23