(1) Should a dispute arise between the purchaser and seller as to whether or not any sale, service, or commodity is exempt from taxation pursuant to this part 7, nevertheless the seller shall collect and the purchaser shall pay the tax, and the seller shall thereupon issue to the purchaser a receipt showing the tax paid.
(a) (Deleted by amendment, L. 2011, (HB 11-1265), ch. 228, p. 978, § 3, effective May 27, 2011.)
The right of any person to a refund under this article shall not be assignable, and,except as provided in paragraph (c) of this subsection (2) and subsection (2.5) of this section, such application for refund shall be made by the same person who purchased the goods and paid the tax thereon as shown in the invoice of the sale.
A refund shall be made or a credit allowed by the executive director of the department of revenue to any person entitled to an exemption where the person establishes: That a tax was paid by another on a purchase made on behalf of such person or that a tax was paid by an independent contractor on or before July 1, 1979, on tangible personal property incorporated into realty for the sole use, benefit, and ownership of any person entitled to an exemption; that a refund has not been granted to the person making the purchase; and that the person entitled to exemption paid or reimbursed the purchaser for such tax. No such refund shall be made or credit allowed in an amount greater than the tax paid.
The executive director of the department of revenue shall make a refund or allow acredit to any person who establishes that he or she has overpaid the tax due pursuant to this article 26. No such refund shall be made or credit allowed in an amount greater than the tax paid.
An application for refund under subsection (2)(c) or (2)(c.5) of this section shall bemade within the applicable deadline and shall be made on forms prescribed and furnished by the executive director of the department of revenue, which form shall contain, in addition to the foregoing information, such pertinent data as the executive director prescribes. Except as set forth in section 29-2-106.1 (5)(b), the deadline for a sales tax refund or a refund of any use tax collected by a vendor is three years after the twentieth day of the month following the date of purchase and the deadline for any other use tax refund is three years after the twentieth day of the month following the initial date of the storage, use, or consumption in the state by the person applying for the refund.
Upon receipt of the application and proof of the matters contained therein, theexecutive director of the department of revenue shall give notice to the applicant by order in writing of the executive director's decision. Aggrieved applicants, within thirty days after such decision is mailed to them, may petition the executive director for a hearing on the claim in the manner provided in section 39-21-103 and may appeal to the district courts in the manner provided in section 39-21-105.
The proceeds of any claim for refund shall first be applied by the department ofrevenue to any tax deficiencies or liabilities existing against the claimant before allowance of the claim by the department; except that, if such excess payment of tax moneys in any period is discovered as a result of audit by the department and deficiencies are discovered and assessed against the taxpayer as a result of the audit, the excess moneys shall be first applied against any deficiencies outstanding to the date of the assessment but shall not be applied to any future tax liabilities.
(2.5) (a) Except as set forth in section 29-2-106.1 (5)(b), within three years after the due date of the return showing the overpayment or one year after the date of overpayment, whichever is later, a vendor shall file any claim for refund with the executive director of the department of revenue. The executive director shall promptly examine such claim and shall make a refund or allow a credit to any vendor who establishes that such vendor overpaid the tax due pursuant to this article.
(b) (I) A vendor may claim a refund on behalf of any purchaser of the vendor if:
The purchaser could timely file a claim for a refund on his or her own behalf; and
The vendor establishes to the satisfaction of the executive director of the departmentof revenue that the amount claimed, including any interest payable pursuant to section 39-21110, has been or will actually be paid by the vendor to the purchaser.
(II) Nothing in this paragraph (b) shall prohibit a vendor from taking a credit that the vendor believes to be due on a subsequent period return for an overpayment or for tax collected in error and subsequently refunded to a purchaser; except that such credit shall be subject to audit and shall not bear any interest pursuant to section 39-21-110.
(c) No vendor shall be compelled by any party to file a refund claim pursuant to paragraph (b) of this subsection (2.5). It shall be a complete defense to any claim by a purchaser against a vendor for tax collected in error that the vendor has paid the tax over to the department of revenue. Any action by a purchaser for tax collected by a vendor in error that has been remitted to the department must be made pursuant to subsection (2) of this section and section 39-21-108.
If any person is convicted under the provisions of section 39-21-118, the convictionsshall be prima facie evidence that all refunds received by the person during the current year were obtained unlawfully, and the executive director of the department of revenue is empowered to bring appropriate action for recovery of such refunds. A brief summary statement of the above mentioned penalties shall be printed on each form application for refund.
The burden of proving that sales, services, and commodities on which tax refunds areclaimed are exempt from taxation under this part 7, or were not at retail, shall be on the one making such claim under such reasonable requirements of proof as the executive director of the department of revenue prescribes. Should the applicant for refund be aggrieved at the final decision of the executive director, the applicant may proceed to have the same reviewed by the district courts in the manner provided for review of other decisions of the executive director as provided in section 39-21-105.
Source: L. 2004: Entire part added with relocations, p. 1016, § 2, effective July 1. L. 2011: (1), (2), and (3) amended and (2.5) added, (HB 11-1265), ch. 228, p. 978, § 3, effective May 27. L. 2013: (2)(d) amended, (HB 13-1009), ch. 73, p. 233, § 1, effective August 7. L. 2017: (2)(d) and (2.5)(a) amended, (SB 17-112), ch. 144, p. 484, § 5, effective April 18. L. 2019: (2)(c) and (2)(c.5) amended, (HB 19-1245), ch. 199, p. 2160, § 8, effective August 2.
Editor's note: (1) The provisions of this section are similar to several former provisions of § 39-26-114 as they existed prior to 2004. For a detailed comparison, see the comparative tables located in the back of the index.
(2) Section 5 of chapter 228, Session Laws of Colorado 2011, provides that the act amending subsections (1), (2), and (3) and adding subsection (2.5) applies to all claims for refunds of sales or use tax filed with the department of revenue before, on, or after May 27, 2011.
Cross references: (1) For the legislative declaration in the 2011 act amending subsections (1), (2), and (3) and adding subsection (2.5), see section 1 of chapter 228, Session Laws of Colorado 2011.
(2) For the short title ("Affordable Housing Act of 2019") and the legislative declaration in HB 19-1245, see sections 1 and 2 of chapter 199, Session Laws of Colorado 2019.