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3.01.230 Exemptions

The use tax imposed pursuant to Section 3.01.210 is declared to be supplementary to the sales tax imposed pursuant to Section 3.01.120 and shall not apply:
A. To the storage, use, or consumption of any tangible personal property, the sale of which is subject to the sales tax imposed pursuant to Section 3.01.120;
B. To the storage, use, or consumption of any tangible personal property purchased for resale in the city, either in its original form or as an ingredient of a manufactured or compounded product, in the regular course of a business;
C. To the storage, use or consumption of gasoline which is taxed under the provisions of Part 1, Article 27, Title 39 of the Colorado Revised Statutes and all gasoline which is taxed under such provisions and for which the tax is refunded, and to the storage, use or consumption of special fuels, as defined in Section 39-27-201(8) of the Colorado Revised Statutes, used for the operation of farm vehicles when the same are being used on farms or ranches;
D. To the storage, use, consumption, or loan of tangible personal property brought into the city by a nonresident thereof for his own storage, use, or consumption while temporarily within the city;
E. To the storage, use, consumption, or loan of tangible personal property by or to the United States government, the state, or its institutions, or its political subdivisions in their governmental capacities only, or any charitable organizations in the conduct of its regular charitable functions and activities;
F. 1. To the storage, use, or consumption of tangible personal property by a person engaged in the business of manufacturing, compounding for sale, profit, or use, any article, substances, 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 the container, label, or the furnished shipping case.
2. As used in subdivision (1) 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:
a. 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
b. Such property, whether or not it becomes an integral or constituent part of a food product: (A) is a chemical, solvent, agent, mold, skin casing, or other material; (B) is used 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 (C) is directly utilized and consumed, dissipated, or destroyed, to the extent that 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;
G. To the storage, use or consumption of electricity, coal, coke, fuel oil, nuclear fuel, or gas for use in mining, refining, irrigation, building construction, telecommunication services and street and railroad transportation services;
H. To the storage and use of cattle, sheep, lambs, swine, and goats within the city, or to the storage and use within the city of mares and stallions kept, held and used for breeding purposes only;
I. To the storage, use or consumption of newsprint and printer's ink for storage, use or consumption by publishers of newspapers and commercial printers and to the storage, use or consumption of newspapers, as such term is defined in Section 24-70-102 of the Colorado Revised Statutes;
J. To the storage, use or consumption of cigarettes;
K. The storage, use, or consumption of tangible personal property acquiring residency;
L. To the storage or use of an automotive vehicle for which registration, licensing or titling is required by the state pursuant to Section 42-6-137(2) of the Colorado Revised Statutes if the owner is or was, at the time of purchase, a nonresident of the city, and he purchased such automotive vehicle outside the city for use outside the city, and actually so used it for a substantial and primary purpose for which it was acquired, and he registered, licensed and titled such automotive vehicle outside the city;
M. To the storage, use or consumption 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 use tax by virtue of Section 3.01.220(C);
N. To the storage or use 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;
O. To the storage or use 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;
P. To the storage, use or consumption of tangible personal property which is thereafter transferred to a vendee located outside the city without consideration (other than the purchase, sale, or promotion of the transferor's product) for use outside of the city in selling products normally sold at wholesale by the person storing, using, or consuming such property;
Q. To the testing, modification, inspection, or similar type activities of tangible personal property acquired for ultimate use outside the city in manufacturing or similar type of activities if the test, modification, or inspection period does not exceed ninety days;
R. To the storage, use, or consumption of any article by a retailer or vendor of food, meals, or beverages, which article is to be furnished to a consumer or user for use with articles of tangible personal property purchased at retail, if: (A) a separate charge is not made for the article to the consumer or user; (B) such article becomes the property of the consumer or user, together with the food, meals, or beverages purchased; and (C) a tax is paid on the retail sale as required by Section 3.01.120(A) or (E);
S. To the storage, use, or consumption of any container or bag by 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 packing or bagging articles of tangible personal property purchased at retail, if: (A) a separate charge is not made for the container or bag to the consumer or user; (B) such container or bag becomes the property of the consumer or user, together with the food, meals, or beverages purchased; and (C) a tax is paid on the retail sale as required by Section 3.01.120(A) or (E);
T. To the storage, use or consumption of food or meals that are provided to employees of the places described in Section 3.01.120(E) if such food or meals are provided to such employees at no charge or at a reduced charge and are considered as part of their salary, wages, or income;
U. To the storage, use, or consumption by a contractor or subcontractor of construction and building materials for use in the building, erection, alteration, or repair of structures, highways, roads, streets, and other public works owned and used by:
1. The United States government, the State, its departments and institutions, and the political subdivisions thereof in their governmental capacities only,
2. Charitable organizations in the conduct of their regular charitable functions and activities, or
3. Schools, other than schools held or conducted for private or corporate profit;
V. To the storage, use or consumption of aircraft used or purchased for use in interstate commerce by a commercial airline;
W. To the storage of construction materials;
X. The city's use tax shall not be imposed with respect to the use or consumption of tangible personal property within the city which occurs more than three years after the most recent sale of the property if, within the three years following such sale, the property has been significantly used within the state for the principal purpose for which it was purchased;
Y. To the storage, use or consumption of food, as specified in 7 U.S.C. Section 2012(g), as such section existed on October 1, 1987, or is thereafter amended, which is purchased with food stamps pursuant to the federal food stamp program, or the storage, use or consumption 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 with WIC vouchers or checks pursuant to the federal special supplemental program for women, infants, and children.
Z. To the storage, use or consumption of tangible personal property by or to a qualified hospital organization, provided that the property used or consumed by the qualified hospital organization is employed in furtherance of an exempt function, excepting use tax on the use or consumption 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 use or consumption of any property would be exempt under this section but for the fact that the property 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. (Ord. O-2008-27 § 3, 2008; Ord. O-93-26 § 7, 1993; Ord. O-91-61 § 60 & 63, 1991; Ord. O-86-104 § 20, & 21, 1986; Ord. O-85-137 § 1 (part), 1985).