Notice of Proposed Rulemaking
Rules to Conform to Legislation

To All Interested Parties,

The Colorado Department of Revenue, Division of Taxation, will hold a public rulemaking hearing on the following income, sales, cigarette, tobacco products, and marijuana tax rules listed below on January 25, 2021 at 10:00 AM. This hearing will be conducted entirely by telephone and video conference, and will be recorded. The Department has created a Virtual Rulemaking Hearing Guide that provides additional guidance for participants.

Parties wishing to attend or participate by video conference may obtain a link for connecting by sending an email to dor_taxrules@state.co.us. Because of additional participation features provided by the video conference, we encourage participants to participate through the video conference. Participants are welcome to use a webcam to appear by video, but may also leave their video camera off.

Parties wishing to attend or participate by teleconference should connect as follows:

Phone Number: 1 (669) 900-6833

Meeting ID: 825-0205-0241

Proposed Rules:

• Rule 39-22-104(3)(g). Gross Conservation Easement Addition.– The purpose of this amendment is to conform the existing rule to legislative changes made by House Bill 19-1264 and to make minor stylistic changes.
• Rule 39-22-304(2)(f). Gross Conservation Easement Addition. –The purpose of this amendment is to conform the existing rule to legislative changes made by House Bill 19-1264 and to make minor stylistic changes.
• Rule 39-22-522. Conservation Easement Credit. –The purpose of this amendment is to conform the existing rule to legislative changes made by House Bill 19-1264, which increased the maximum credit to $5,000,000 per donation, allowable in increments limited to $1,500,000 per year. This amendment also repeals parts of the rule that are duplicative with statute, and makes grammatical, stylistic, or organizational changes to improve the clarity and readability of the rule.
• Rule 39-22-538. Rural Primary Health Care Preceptor Credit. –The purpose of the amendment is to conform the rule to statutory changes made by House Bill 19-1088 and to make other minor changes improve readability and clarity of the rule.
• Rule 39-26-704–4. Sales Tax Exemptions for Hotel Residents. – The purpose of this amendment is to further explain the exemptions for long-term rentals of rooms and accommodations applicable to state and state-administered local sales taxes and the written agreement required for such exemptions.
• Rule 39-26-717. Medical Material, Equipment, and Drugs. –The purpose of this amendment is to conform the existing rule to legislative changes made by Senate Bill 18-129, which reorganized section 39-26-717, C.R.S. This amendment also incorporates the statutory definition of “prescription drug” from section 12-280-103(42), C.R.S., adopts a definition of “prosthetic devices” consistent with the Streamlined Sales and Use Tax Agreement and federal regulation, repeals parts of the rule that are duplicative with statute, and makes grammatical, stylistic, or organizational changes to improve the clarity and readability of the rule.
• Special Rule 2. Agricultural Products and Equipment.– The purpose of this amendment is to conform the existing rule to legislative changes made by House Bill 19-1162, which added a sales and use tax exemption for ear tags and electronic identification readers used with food animals, and House Bill 19-1329, which added sales and use tax exemptions for fertilizer and spray adjuvants used in the production of agricultural commodities. This amendment also repeals parts of the rule that are obsolete or duplicative with statute, and makes grammatical, stylistic, and organizational changes to improve the clarity and readability of the rule.
• Rule 39-28-104. Wholesaler’s Service Fee.– The purpose of the amendment to this rule is to remove the requirement to file cigarette returns electronically because House Bill 20-1175 statutorily requires electronic filing of cigarette returns and payment of cigarette tax by electronic funds transfer.
• Rule 39-28.5-106. Distributor’s Service Fee. – The purpose of the amendment to this rule is to remove the requirement to file tobacco products returns electronically because House Bill 20-1175 statutorily requires electronic filing of tobacco products returns and payment of tobacco products tax by electronic funds transfer.
• Rule 39-28.8-101. Retail Marijuana Definitions.– The purpose of this rule is to update the rule to reflect the statutory changes made by Senate Bill 19-224, which combined the Colorado Retail Marijuana Code and Colorado Medical Marijuana Code into a singular Colorado Marijuana Code, and reorganized Title 44, Article 12 to Title 44, Article 10.

The Department will accept oral and written comments on these proposed rules. Oral comments will be accepted by video and telephone conference at the hearing. Written comments may be submitted to dor_taxrules@state.co.us in advance or in lieu of oral commentary at the hearing and will be accepted until 5:00 P.M. on January 25, 2021.

You can find the proposed rules and statements of basis and purpose at the links above. You may also find this information on the Division’s website by clicking “Formal Rulemaking Hearings” on the left side of the page.

The proposed rules will be published in the Colorado Register on December 25, 2020.

We would appreciate your feedback to help us measure and improve the success of the rulemaking program. If you participate in the rulemaking process, we invite you to complete a short survey. Follow the link, and choose the “I participated in the Rulemaking Process (Announcement, Stakeholder Meeting, or Hearing)” option.

Sincerely,

Colorado Department of Revenue
Taxation Division