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3.01.180 Exemptions

The following goods and services shall be exempt from sales tax under the provisions of this chapter:
1. All sales to the United States government and to the state, its department and institutions, and the political subdivisions thereof in their governmental capacities only;
2. All sales made to charitable organizations in the conduct of their regular charitable functions and activities;
3. All sales which the city is prohibited from taking under the constitution or laws of the United States, the state, or the city's Charter;
4. All sales of cigarettes;
5. All sales of medical supplies;
6. All sales of prescription drugs and prosthetic devices for humans and animals;
7. All sales and purchases of commodities and services under the provisions of the definition for "rooms or accommodations" or "lodging services" in Section 3.01.020 to any occupant who is a permanent resident of any hotel, inn, bed and breakfast residence, apartment hotel, lodging house, motor hotel, guesthouse, guest ranch, trailer court, mobile home, auto camp, or trailer court or park, and who enters into or has entered into a written agreement for occupancy of a room or accommodations or lodging services of a period of at least thirty consecutive days during the calendar year or preceding year;
8. All sales made to schools, other than schools held or conducted for private or corporate profit;
9. Any sale of a new or used trailer, semi-trailer, truck, truck-tractor or truck body manufactured within the city if such vehicle is purchased from the manufacturer for use exclusively outside the city or in interstate commerce and is delivered by the manufacturer to the purchaser within the city, if the purchaser drives or moves such vehicle to any point outside the city within thirty days after the date of delivery, and if the purchaser furnishes an affidavit to the manufacturer that such vehicle shall be permanently licensed and registered outside the city and shall be removed from the city within thirty days after the date of delivery;
10. Any sale of a new or used trailer, semi-trailer, truck, truck-tractor or truck body if such vehicle is purchased for use exclusively outside the city or in interstate commerce and is delivered by the manufacturer or licensed dealer to the purchaser within the city, if the purchaser drives or moves such vehicle to any point outside the city within thirty days after the date of delivery, and if the purchaser furnishes an affidavit to the seller that such vehicle shall be permanently licensed and registered outside the city and shall be removed from the city within thirty days after the date of delivery;
11. All sales of construction materials to a common carrier by rail operating in interstate or foreign commerce for use by such common carrier in construction and maintenance of its railroad tracks;
12. All sales of construction materials, if such materials are picked up by the purchaser, and if the purchaser of such materials presents to the retailer a building permit or other documentation acceptable to the city evidencing that a local use tax has been paid or is required to be paid;
13. The transfer of tangible personal property without consideration (other than the purchase, sale, or promotion of the transferor's product) to a vendee located outside the city for use outside the city in selling products normally sold at wholesale by the transferor;
14. The sale of tangible personal property for testing, modification, inspection, or similar type of activities in the city if the ultimate use of such property in manufacturing or similar type of activities occurs outside the city, and if the test, modification, or inspection period does not exceed ninety days;
15. All commodities which are taxed under the provisions of Article 27, Title 39 of the Colorado Revised Statutes, and all commodities which are taxed under such provisions and for which the tax is refunded, and the sale of special fuel, as defined in Section 39-27-201(8) of the Colorado Revised Statutes, used for the operation of farm vehicles when such vehicles are being used on farms and ranches;
16. Any sale of any article to a retailer or vendor of food, meals, or beverages, which article is to be furnished to a consumer or user, together with the food, meals, or beverages purchased, and if a tax is paid on the retail sale as required by Section 3.01.120(A) or (E);
17. Any sale of any container or bag to a retailer or vendor of food, meals, or beverages which container or bag is to be furnished to a consumer or user for the purpose of packaging or bagging articles of tangible personal property purchased at retail, if a separate charge is not made for the container or bag to the consumer or user, if such container or bag becomes the property of the consumer or user, together with the food, meals, or beverages purchased, and if a tax is paid on the retail sale as required by Section 3.01.120(l) or (5);
18. All transactions specified in Section 3.01.120(B) in which the fair market value of the exchanged property is excluded from the consideration or purchase price as provided in Section 3.01.120(B), and in which, because there is no additional consideration involved in the transaction, there is no purchase price within the meaning of the definition for "price" or "purchase price" as found in Section 3.01.020;
19. a. All sales of construction materials to contractors and subcontractors for use in the building, erection, alteration, or repair of structures, highways, roads, streets, and other public works owned or used by:
i. The United States Government, the state, its departments and institutions, and the political subdivisions thereof in their governmental capacities only,
ii. Charitable organizations in the conduct of their regular charitable functions and activities, or
iii. Schools, other than schools held or conducted for private or corporate profit.
b. On application by a purchaser or seller, the Finance Director shall issue to a contractor or subcontractor a certificate or certificates of exemption indicating that the contractor's or subcontractor's purchase of construction materials is for a purpose stated in paragraph (a) of this subsection and is, therefore, free from sales tax. The Finance Director shall provide forms for such application and for such certificate and shall have the authority to verify that the contractor or subcontractor is, in fact, entitled to the issuance of such certificate prior to such issuance;
20. All sales of aircraft used or purchased for use in interstate commerce by a commercial airline;
21. a. Sales to and purchases of tangible personal property by a person engaged in the business of manufacturing, compounding for sale, profit or use, any article, substance, or commodity, which tangible personal property enters into the processing of or becomes an ingredient or component part of the product or service which is manufactured, compounded, or furnished, and commercial packaging materials thereof, shall be deemed to be wholesale sales and shall be exempt from taxation under this chapter.
b. As used in paragraph (a) of this subsection with regard to food products, tangible personal property enters into the processing of such products, and, therefore, is exempt from taxation when:
i. It is intended that such property become an integral or constituent part of a food product which is intended to be sold ultimately at retail for human consumption, or
ii. Such property, whether or not it becomes an integral or constituent part of a food product, is a chemical, solvent, agent, mold skin casing, or other material, issued for the purpose of producing or inducing a chemical or physical change in a food product or is used for the purpose of placing a food product in a more marketable condition and is directly utilized and consumed, dissipated, or destroyed, to the extent it is rendered unfit for further use, in the processing of a food product which is intended to be sold ultimately at retail for human consumption;
22. All sales and purchases of electricity, coal, gas, fuel oil, coke, or nuclear fuel, for use in mining, refining, irrigation, construction, telecommunication services and street and railroad transportation services;
23. All sales and purchases of cattle, sheep, lambs, poultry, swine, and goats, all sales and purchases of mares and stallions for breeding purposes, all sales and purchases of live fish for stocking purposes, and all farm close-out sales;
24. All sales and purchases of feed for livestock, including horses, or poultry, all sales and purchases of seeds, and all sales and purchases of orchard trees;
25. a. Every vendor vending individual items or personal property through coin-operated vending machines, and who otherwise complies with the provisions of this subsection, shall be exempt from the provisions of Sections 3.01.130 and 3.01.140, except as hereinafter provided, but nevertheless such vendor shall pay a sales tax of three percent on the personal property sold in excess of thirty cents so vended in the coin-operated machines unless the sale is otherwise exempt under the provisions of this chapter.
b. To be eligible for the exemption provided for in this subsection, each vendor shall:
i. Be licensed under Section 3.01.110,
ii. Maintain a record of the identification number, ownership, location, and disposition of every coin-operated vending machine used by him in his operation as a vendor, and
iii. Within sixty days after commencing business as such vendor, submit to the Finance Department an accurate list containing the information required under subparagraph (ii) of this paragraph and submit such list annually thereafter on January 1, commencing in 1986;
26. All sales and purchases of straw and other bedding for use in the care of livestock or poultry;
27. Forty-eight percent of the purchase price of factory-built housing, as such housing is defined in Section 24-32-703(3) of the Colorado Revised Statutes, shall be exempt from taxation under this chapter, except that the entire purchase price in any subsequent sale of a mobile home, as such vehicle is defined in Section 42-1-102(82)(b) of the Colorado Revised Statutes, after such mobile home has been subject to the payment of sales tax by virtue of Section 3.01.120(H), shall be exempt from taxation under this chapter;
28. The purchase price of electric-powered automotive vehicles, including both the original and all subsequent purchases of such vehicles, and the purchase of batteries and controls required for the operation and maintenance of such vehicles;
29. In any case in which a sales tax has been imposed under this chapter on lubricating oil used other than in automotive vehicles, the purchase thereof shall be entitled to a refund equal to the amount of the sales tax paid on that portion of the sale price thereof which is attributable to the federal excise tax imposed on the sale of such lubricating oil. The refund allowed under this subsection shall be paid by the Finance Director upon receiving evidence that the purchaser has received under Section 6425 of the Internal Revenue Code of 1954, as amended, a refund of the federal excise tax paid on the sale of such lubricating oil. The claim for a refund shall be made upon forms furnished by the Finance Department;
30. All sales and purchases of refractory materials and carbon electrodes used by a person manufacturing iron and steel for sale or profit and all sales and purchases of inorganic chemicals used in the processing of vanadium-uranium ores;
31. All sales and purchases of newsprint and printer's ink for use by publishers of newspapers and commercial printers and all sales and purchases of newspapers;
32. Meals provided to employees of the places described in Section 3.01.120(E)(2) at no charge or at a reduced charge and which are considered as part of their salary, wages or income;
33. All sales of tangible personal property purchased or sold within the city if delivered outside the city to the purchaser;
34. All sales and purchases of food, as specified in 7 U.S.C. Section 2012(h), as such section existed on October 1, 1987, or is thereafter amended, which is purchased, or is eligible to be purchased,  with food stamps pursuant to the federal food stamp program, or sales and purchases of food, as specified in 42 U.S.C. Section 1786, as such section existed on October 1, 1987, or is thereafter amended, which is purchased, or is eligible to be purchased, with WIC vouchers or checks pursuant to the federal special supplemental program for women, infants, and children.
35. In accordance with the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sections 116 to 126, as amended, on or after August 1, 2002, mobile telecommunications service provided to a customer whose place of primary use is outside the boundaries of the City.
36. All sales made to, billed directly to, and paid for directly by, a qualified hospital organization as defined in Section 3.01.020, provided that the property or service purchased by the qualified hospital organization is employed in furtherance of an exempt function, excepting sales tax on the purchase of construction materials used by contractors who perform contracts for the qualified hospital organization. The foregoing exception shall apply notwithstanding any other exemption granted to the qualified hospital organization pursuant to this Chapter. As used in this Section, “employed in furtherance of an exempt function” means employed by a qualified hospital organization in an activity from which none of the proceeds are treated as unrelated business income. As used in this Section, "unrelated business income" means gross income derived from any unrelated trade or business within the meaning of section 512 of the United States Internal Revenue Code of 1986, as amended.
If the purchase and sale of any property or service would be exempt under this section but for the fact that the property or service is employed in an activity from which a portion of the proceeds is treated as unrelated business income, the director of finance is authorized to approve written formulas or methodologies (including formulas or methodologies of individual qualified hospital organizations) as may be appropriate and reasonable to determine, based on the evidence available, the percentage of the proceeds from such activity that is not treated as unrelated business income. This calculated percentage shall be the percentage of the cost of such property or service that will be exempt under this section. The director of finance may condition approval of formulas and methodologies on receipt of such information as is reasonably deemed necessary for proper implementation of such formulas and methodologies.
37. Sales made by charitable organizations under the following conditions:
a. The charitable organization has been granted a City exempt license;
b. No individual transaction involving a sale of tangible personal property or concessions by the charitable organization shall exceed five thousand dollars ($5,000.00);
c. The funds raised by the charitable organization through such sales do not exceed $250,000.00 in a calendar year; and
d. The sale of tangible personal property is not the principal use of any premises from or at which such sales are made, if such premises are owned, leased or otherwise controlled by the charitable organization.
(Ord. O-2015-3 § 7, 2015;Ord. O-2012-15 § 5, 2012; Ord. O-2008-27 § 2, 2008; Ord. O-2003-4 § 3, 2003;Ord. O-96-46 § 1, 1996, Ord. O-93-26 § 5, 1993; Ord. O-91-61 § 47, 57, & 74, 1991; Ord. O-86-104 § 14 &15, 1986; Ord. O-85-137 § 1 (part), 1985).