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Focus on State & Local Taxation: Colorado Announces Amnesty Program

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The Colorado Department of Revenue has announced a tax amnesty program under which taxpayers will be allowed to pay the full amount of overdue personal, corporate, partnership or fiduciary income tax; sales and use tax; gasoline tax; special fuels tax; cigarette and tobacco tax, or severance tax without penalty.
June 16, 2011

Colorado Announces Amnesty Program

The Colorado Department of Revenue has announced a tax amnesty program under which taxpayers will be allowed to pay the full amount of overdue personal, corporate, partnership or fiduciary income tax; sales and use tax; gasoline tax; special fuels tax; cigarette and tobacco tax, or severance tax without penalty.

The program will run from October 1, 2011 through November 15, 2011 and applies to taxes due on or before December 31, 2010 (except for 2010 Colorado income tax that was due on April 18, 2011).

Colorado – Sales and Use Tax – Standardized Software

Effective 07/01/2012, L.2011, H1293 defines “tangible personal property” to exclude standardized software, effectively restoring a sales and use tax exemption that was repealed by L.2010, H1192.

Computer software is included within the definition of “tangible personal property” and therefore subject to tax only if it is:

a. Prepackaged for repeated sale or license,
b. Its use is governed by a tear-open nonnegotiable license agreement, and
c. It is delivered to the customer in a tangible medium.

Computer software is not delivered to the customer in a tangible medium if it is:

a. Provided through an application service provider,
b. Delivered by electronic computer software delivery, or
c. Transferred by load and leave computer software delivery.

Furthermore, if a retailer sells taxable computer software to a Colorado purchaser, and the Colorado purchaser pays the retailer for a quantity of computer software licenses with the intent to distribute the computer software to any of the purchaser’s locations outside of Colorado, the measure of Colorado sales tax due is the total of the license fees associated only with the licenses that are actually used in Colorado.

 

Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.

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