Collection of sales tax - motor vehicles - off-highway vehicles exemption - process for motor vehicles sold at auction - exception - definition.

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(1) The department of revenue or its authorized agent shall not register a motor or other vehicle for which registration is required or issue a certificate of title for a motor vehicle, off-highway vehicle as defined in section 42-6-102, C.R.S., or manufactured home as defined in section 3829-106, C.R.S., until any tax due on the sale and purchase of the vehicle under section 29-2-106, C.R.S., or section 39-26-106 or imposed by ordinance of any home rule city has been paid.

  1. If an applicant for registration and certificate of title for any motor or other vehicle orfor a certificate of title for a mobile home fails to show payment of the sales taxes applicable to the sale and purchase thereof by means of proper receipts therefor, the department of revenue or its authorized agent shall collect all such applicable taxes at the time such application is made.

  2. Revenues due the state and collected pursuant to this section shall be distributed asare other revenues under this part 1, and revenues due any county, city, or town so collected shall be distributed in accordance with the provisions of section 29-2-106, C.R.S., or as specified by contract entered into with the department of revenue pursuant to section 24-35-110, C.R.S.

  3. To facilitate collection of sales taxes as provided in this section, the governing bodyof each city or town which has imposed a sales tax shall certify to the department of revenue and to the county clerk of the county in which such city or town is located a true copy of its current sales tax ordinances, and shall likewise certify any subsequent changes therein.

  4. (a) The sale of a new or used automobile to a purchaser who is a nonresident of Colorado and who purchases such automobile for use outside this state is exempt from all sales taxes, the collection of which is provided for by this section.

  1. The executive director of the department of revenue shall attempt to negotiate agreements of reciprocity concerning the collection of sales taxes on motor vehicles with adjacent states.

  2. Repealed.

(5.5) The sale of personal property on which a specific ownership tax has been paid or is payable is exempt from the sales tax imposed by any special district or authority authorized to levy a sales tax pursuant to title 24, 25, 29, 30, 32, 37, or 43, when the sale meets both of the following conditions:

  1. The purchaser is a nonresident of, or has his or her principal place of business outsideof, the district or authority; and

  2. The personal property is registered or required to be registered outside the limits ofthe district or authority under the laws of this state.

(6) (a) In a seller-financed sale in which the seller has added the sales tax due on the sale to the financed sales price of the motor or off-highway vehicle and the purchaser has failed to make payments due to the seller, the seller may deduct all portions of the unreceived payments that are attributable to the sales tax due on the sale from the next sales tax return made by the seller under this article. If the amount to be so deducted exceeds the amount of sales tax to be remitted by the seller for the next reporting period, the seller may carry forward the remaining amount of the deduction to future sales tax returns. This subsection (6) does not create a right to a refund or any other payment by the department of revenue to the seller.

  1. For purposes of this subsection (6), "seller-financed sale" means a retail sale of amotor or off-highway vehicle by a seller licensed under article 20 of title 44 in which the seller, or a wholly-owned affiliate or subsidiary of the seller, collects all or part of the total consideration paid for the vehicle in periodic payments and retains a lien on the vehicle until all payments have been received. Except as otherwise provided in this subsection (6)(b), "sellerfinanced sale" does not include a retail sale of a vehicle in which a person other than the seller provides the consideration for the sale and retains a lien on the vehicle until all payments have been made.

  2. The department of revenue may promulgate rules and regulations for the implementation of this subsection (6).

(7) (a) Notwithstanding any provision of law to the contrary, for any motor vehicle sold through an auction sale, unless paragraph (b) of this subsection (7) applies, all sales tax due for the purchase of the motor vehicle shall not be collected by the auctioneer, but shall be collected by the county clerk or other authorized agent of the county or city and county in which the motor vehicle is to be registered.

(b) The method of sales tax collection specified by subsection (7)(a) of this section does not apply to the sale of a motor vehicle at auction sale if the auctioneer is also an automobile dealer licensed under part 1 of article 20 of title 44.

(8) Subsections (1) and (2) of this section do not apply to the sale or transfer of offhighway vehicles before July 1, 2014. For an off-highway vehicle that was first purchased or transferred before July 1, 2014, and is being issued its first certificate of title for the first time after this date, the department shall not verify that the person paid any tax due on the vehicle.

Source: L. 35: p. 1009, § 5. CSA: C. 144, § 14. L. 37: p. 1085, § 1. L. 41: p. 661, § 5. CRS 53: § 138-6-13. C.R.S. 1963: § 138-5-13. L. 71: p. 1263, § 1. L. 77: (5) added, p. 1827, § 1, effective July 23; (1) and (2) amended, p. 1743, § 6, effective January 1, 1978. L. 79: (5)(c) repealed, p. 1463, § 1, effective June 29. L. 84: (5)(b) amended, p. 1123, § 37, effective June 7. L. 95: (6) added, p. 889, § 1, effective May 25. L. 2013: (1), (6)(a), and (6)(b) amended and (8) added, (SB 13-280), ch. 407, p. 2377, § 2, effective June 5; (7) added, (SB 13-134), ch. 80, p. 254, § 1, effective August 7. L. 2018: (6)(b) and (7)(b) amended, (SB 18-030), ch. 7, p. 140, § 13, effective October 1. L. 2019: (5.5) added, (HB 19-1240), ch. 264, p. 2501, § 5, effective June 1.

Cross references: For vehicles required to be registered, see § 42-3-102.


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