Department of Revenue Taxation Division PROCEDURE AND ADMINISTRATION 1 CCR 201-1 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] PROCEDURE AND ADMINISTRATION RULES Basis: The statutory basis for these rules is C.R.S. 39-21-112 (1). Purpose: The purpose of this rule is to issue rules regarding the effect of law changes on mailing requirements, hearings and other clarifications to existing rules. Rule 24-35-103.5. Private Letter Rulings and Informational Letters. (1) Scope.

This rule describes the procedures for applying for and issuing Private Letter Rulings and Information Letters to a taxpayer in response to the taxpayer’s request for an interpretation of tax law or application of tax laws to a specific set of facts. This rule does not govern “For Your Information” Publications (“FYIs”), Department published “Questions & Answers,” instructions, oral or email communications to or from the department, general correspondence, assessments, refunds, final determinations, forms, and other statements or publications issued by the department.

(2) Definitions.

(a) “Authorized representative” means the attorney, agent, or person designated by the taxpayer as contact for the department pursuant to an executed DR 0145 (power of attorney).

(b) “Department” means the Colorado Department of Revenue. (c) “General Information Letter” or “Letter” means a non-binding letter issued to a specific taxpayer in response to the taxpayer’s written request for interpretation or application of any tax administered by the Department pursuant to title 29 or 39, C.R.S. General information letters are designed to provide general background information on topics of interest to a taxpayer and do not contain tax advice with respect to a specific factual setting. An information letter is advisory only and the provisions of section (10) of this rule do not apply.

1 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (d) “Person” includes individuals, corporations, partnerships, limited liability companies and others set forth in §39-21-101(3), C.R.S. (e) “Private Letter Ruling” or “Ruling” means a binding letter issued by the department addressed to a specifically designated taxpayer in response to a written request by that taxpayer regarding the tax consequences of a proposed or completed transaction under any tax administered by the department pursuant to title 29 or 39, C.R.S.

(f) “Related Party” means a person required to be included in a Colorado combined report pursuant to §39-22-303, C.R.S., and rules thereunder, or a related party or a member of an affiliated group of which the taxpayer is a member as defined by 26 U.S.C. § § 267 and 1504 of the Internal Revenue Code of 1986.

(g) “Tax” means those state and local taxes (including interest and penalties related to those taxes) administered by the department (Titles 29 and 39, C.R.S.).

(3) Subject Matter of Letters and Rulings.

(a) Matters Subject to Letters and Rulings. A designee of the executive director of the department will issue Letters and Rulings in response to a taxpayer’s inquiry on a broad range of subject matters that involve an interpretation of a tax law (including statute, resolution, and rule), the applicability of tax to a given set of facts, a taxpayer’s tax status, and procedural issues relating to such taxes.

(b) Matters Not Subject to Letters and Rulings. Unless otherwise specifically agreed to by the department, the department will not issue Letters or Rulings regarding:

(i) An issue, whether related to a prospective or a completed transaction, if the same or a closely related issue is before the department or Internal Revenue Service in connection with an examination or audit by the department or Internal Revenue Service of the same taxpayer for the same or any other period. (ii) An issue if that issue or a closely related issue is pending appeal with the tax conferee, executive director, or courts.

(iii) A matter involving the tax consequence of any proposed federal, state, or local legislation.

(iv) Whether “reasonable,” “good cause,” “good faith,” or other similar standard exists in circumstances where such criteria is a requirement of tax law.

2 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (v) Whether a proposed transaction would subject the taxpayer to civil fraud or criminal penalty.

(vi) Questions of fact, such as valuation.

(vii) Factual scenarios that require documentation or facts so voluminous as to be onerous to resolve, including but not limited to questions of “business purpose” and “economic substance.” (viii) Federal law or state constitutional law.

(ix) Only part of an integrated or step transaction, unless as a part of a Ruling regarding the entire transaction (see also subsection (4)(b)(vi) of this rule relating to required disclosures in this regard). (x) Issues brought forward by business, trade or industrial associations, or other similar groups, to the extent such request relates to their members’ or constituency’s tax status or liability. (c) The department will decline to issue Rulings and Letters if it lacks sufficient resources to prepare a response to the same. If the department lacks resources generally and will be unable to respond to most or any requests for Rulings, it will issue a notice of such fact and publish such notice on a Letter-Ruling page on its Website.

(d) The department reserves the right not to issue Rulings or Letters when it determines that it would not be in the best interest of the State. The taxpayer may request that any Ruling request denied pursuant to this paragraph be reviewed by the executive director of the department. (4) Applications for Letters and Rulings.

(a) Letters. In general, a request for a Letter can be informal and not as comprehensive as is required for a request for a Ruling. The Letter request should contain a reasonable description of the facts and identification of issues. Citation to statutes or legal authority is helpful, but not necessary. The department does not charge a fee for issuing a Letter. (b) Rulings. The following must be included in every request for a Ruling. (i) A statement that the taxpayer is requesting a Ruling pursuant to this rule.

3 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (ii) Statement of facts and issues. The request must include a complete and detailed statement of all relevant facts. This statement will, unless expressly agreed to by the department, constitute the factual basis for the Ruling. Therefore, relevant and material facts contained in documents submitted with the request must be specifically set forth in the statement of facts, together with specific citations to the pertinent documents where such facts are contained. It is insufficient disclosure to incorporate by reference factual material contained in documents (e.g., “See Sales Contract for more details.”).

(iii) A discussion of the business reasons for the transaction. (iv) True and complete copies of all documents relevant to the Ruling. (v) A statement that the same or substantially similar issue is not being considered by the department or Internal Revenue Service in connection with an active examination, audit of the taxpayer or related party.

(vi) For requests that pertain only to one step of a large integrated transaction, documents relating to the entire transaction. (vii) If the request is with respect to a corporate distribution, reorganization, or other similar or related transaction, the corporate balance sheet nearest the date of the transaction shall be submitted. If the request relates to a prospective transaction, the most recent balance sheet shall be submitted.

(viii) A statement as to whether the taxpayer, related party, or member of an affiliated group, has made the same or similar request for a Ruling relating to the same or similar issue to the Internal Revenue Service or the taxing authority of another state or local jurisdiction. The request to, and Ruling of (if issued), the Internal Revenue Service or other taxing jurisdiction must be attached.

(ix) The taxpayer should furnish a discussion of the relevant issues underlying its request for a Ruling. A taxpayer should make its best efforts in this regard, although it is not required that taxpayers utilize external counsel.

4 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (x) Identification of the taxpayer. A request for Letter may be submitted without disclosing the taxpayer’s identity. A request for Ruling may be submitted initially so as not to disclose the identity of the taxpayer. A taxpayer may maintain its anonymity through its receipt of the draft of the department’s ruling. Upon receiving the draft, unless the taxpayer withdraws the ruling request, the taxpayer must disclose in writing the following to the department before the department will issue the Ruling:

(1) Name and trade name, if any.

(2) Address of physical location and, if different from the location address, mailing address.

(3) Social Security Number (SSN), Colorado Tax account number, and Federal Employment Identification Number (FEIN), if any.

(4) Telephone numbers and email addresses of the taxpayers about whom the request is made.

(5) The same information required in subsection 4(b)(x)(1-4) for each person with respect to whom the taxpayer expects the Ruling to apply.

(c) The taxpayer must supplement the request with any additional statements, facts, arguments, citations of authority (including relevant Colorado statutes and published court decisions issued or enacted after the request was submitted but before the Ruling is issued), not previously disclosed but known to the taxpayer at any time prior to the issuance of the Ruling. (d) At the time of disclosure of the taxpayer’s identity to the department, as set forth in subsection 4(b)(x), the taxpayer must also submit: (i) A request signed by the taxpayer and, if submitted by an authorized representative, also by the authorized representative. The signature of the signer shall be accompanied by a declaration that the signer, “declares that I have examined this request, including the accompanying documents, and, to the best of my knowledge and belief, the facts and representations presented in support of the request are true, correct, and complete.” The request must be signed by a person authorized to sign on behalf of the entity, and if such person does not have personal knowledge of each of the relevant facts contained in the request, the request must include signed affidavits from those who have such knowledge.

5 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (ii) If submitted by an authorized representative, an executed DR 0145 must be submitted with the request unless an effective authorization is already on file with the department.

(e) The department may determine, after examining the request, that additional information is needed. The department shall request this information from the taxpayer and the taxpayer must submit such information as is requested.

(f) The request for a Ruling or Letter shall be addressed to: Colorado Department of Revenue Policy Group Division P.O. Box 17087 Denver, Colorado 80217-0087 (g) A taxpayer who desires a conference to discuss the request should indicate such desire in writing when filing the request. (5) Fee for Rulings.

(a) Pursuant to §24-35-103.5(6), C.R.S. the department charges a fee in order to offset the direct and indirect costs of the Private Letter Ruling program. The following fee tiers are established for Rulings: (i) First tier Ruling, Initial fee and base evaluation - $500 (ii) Second tier Ruling - $1,000 (ii) Third tier Ruling - $2,500 (iii) Fourth tier Ruling - $5,000 (iv) Fifth tier Ruling - $7,500 (v) Sixth tier Ruling – highest complexity – Fee in excess of $10,000 (b) Fee Process.

(i) The base fee is charged on all Rulings and must accompany the initial request. In the case of some simple Rulings, the department may be able to perform the initial evaluation and prepare a Ruling for the $500 base fee.

(ii) The department will evaluate the Ruling request and determine into which fee tier the request falls.

6 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (1) Such analysis is based on the amount of time the department estimates will be taken in order to complete the Ruling. Such an estimate is necessarily uncertain but will be made by the department in good faith.

(2) The number of hours will be multiplied by $60.00 per hour, which represents the department’s initial estimate of direct and indirect costs associated with the employees who will evaluate the request and draft and review the Ruling.

(3) In the case of a Ruling for which the department estimates the fee to exceed $10,000, the fee shall be the number of estimated hours times the applicable rate.

(iii) Once the fee tier (or the fee amount, if a sixth tier Ruling) has been set, it will not be modified except as indicated below. (iv) Except in cases of a first tier Ruling, the department shall give notice of the fee tier (or the fee amount, if a sixth tier Ruling) to the taxpayer, at which time the taxpayer must accept and pay the fee or withdraw the request.

(v) Except as noted below, the fee is non-refundable.

(1) If, during the pendency of a Ruling request, the department discovers facts that were not initially disclosed in the request, which facts both have a material effect on the department’s determination and require material additional time to complete the Ruling, the department may change the fee tier or the fee amount, if a sixth tier Ruling, upward. The taxpayer shall be given notice of the change in fee or fee tier and may withdraw the request in lieu of paying the higher fee.

(2) If, during the pendency of a Ruling request, the taxpayer decides to withdraw the request, the department shall cease work on the Ruling and evaluate the amount of time devoted to the request. If the amount of time already devoted is materially less than the amount of time initially estimated, then the department shall refund the difference between the amount paid as the fee and the amount arrived at by multiplying the number of hours already devoted by the then operative hourly rate noted in (5)(b)(ii)(2). However, no refund of the fee shall be made if a taxpayer withdraws its request after receipt of the draft of the ruling.

(6) Conferences.

7 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (a) If a conference has been requested by the taxpayer or if the department determines that such a conference will be useful in understanding the request, the department will give notice of the date, time and place of the conference.

(b) The department will hold only one conference. To promote a free and open discussion of the issues, the conference will be held after the department has had an opportunity to study the case.

(7) Issuance of Ruling.

(a) The department shall issue a Ruling within 90 days of receipt of the request, unless the department declines the request.

(b) The department may place proper conditions on the Ruling, which conditions shall be consistent with statute.

(8) Withdrawal of Requests.

(a) The taxpayer's request for Ruling may be withdrawn at any time prior to the issuance of the Ruling.

(b) Unless otherwise agreed to by the department, all documents and information provided as part of the request will be retained in the department and will not be returned to the taxpayer even though a request is withdrawn or declined.

(9) Oral or Email Advice to Taxpayers.

The department does not issue Letters or Rulings upon oral or email requests. Although taxpayer may receive technical assistance from the department, either orally or through email, such informal advice by the department is advisory only and is not subject to the provisions of section (10), below. (10) Effect of Rulings.

(a) The department shall be bound by and give effect to the tax determinations set forth in a Ruling, unless and until the Ruling is revoked or modified. A Ruling submitted in bad faith, or that omits or misstates relevant and material facts, shall be void to the extent that such bad faith, omission or misstatement is relevant and material to the determination set forth in the Ruling.

(b) A Ruling later determined by the department to be in error may be modified or revoked in accordance with the procedures of this rule. (c) The Ruling shall be revoked or modified by any of the following: 8 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (i) With respect to a Ruling determined to be in error pursuant to (b), by written notice to the taxpayer to whom the Ruling was issued by mailing notice of the same to the taxpayer’s last known address and by e-mailing notice of the same to e-mail addresses provided by the taxpayer at the time of the Ruling request.

(ii) Enactment of legislation that contradicts the tax determinations in the Ruling and that becomes effective subsequent to issuance of the Ruling.

(iii) A contrary decision by the Colorado Court of Appeals or the Colorado Supreme Court.

(iv) Enactment of department rule that is contrary to the Ruling that becomes effective subsequent to the issuance of the Ruling. (d) A taxpayer may not rely on a Ruling issued to another taxpayer, including a related party, unless such person is disclosed in the request and the department expressly agrees to apply the Ruling to such persons. (11) Appeals from Adverse Rulings.

There is no right to appeal a Letter or Ruling.

(12) Taxpayer Not Bound by Ruling.

A Letter or Ruling does not bind a person. However, such Letter or Ruling may be evidence relevant to the assessment of penalties and other issues of good faith.

(13) Confidentiality.

(a) Taxpayers requesting a Letter or Ruling must do so on the basis that the redacted text of any Ruling may be open to public inspection in accordance with §24-35-103.5(5), C.R.S as described below. (b) Taxpayer information excluded from the public version shall be kept confidential except as permitted or required by law.

(c) Before making any Letter or Ruling available for public inspection under subsection (14) of this rule, the department shall delete: (i) the names, addresses, and other identifying details of the person to whom the Ruling pertains and of any other person identified therein;

(ii) information specifically exempted from disclosure by any statute which is applicable to the department;

9 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (iii) trade secrets and commercial or financial information obtained from a person and privileged or confidential; and (iv) Information the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.

(d) The department shall submit to the taxpayer, at the time the Letter or Ruling is issued to the taxpayer, a proposed “public” version of the Letter or Ruling that the department proposes to make available to the public. The taxpayer shall, thereafter, file with the department within 60 days from the date of mailing of such proposed “public” draft Letter or Ruling any written objection to the disclosure of the “public” version of the Letter or Ruling. The department shall submit such proposed version by both mail and e-mail, if an e-mail address is provided. Failure to file an objection shall be deemed a waiver of any claim that the same contains confidential information. The objection must be detailed and specifically cite the objectionable text, provide a detailed and complete statement of the basis of the objection to the disclosure of the text, and propose specific alternative text. The department will take into consideration any objections, but the department shall make the final determination of the contents of the text of the “public” Letter or Ruling.

(14) Publication of Letters and Rulings.

(a) The department will make available to the public “public” versions of Letters and Rulings to the extent permitted by Colorado law, including, if completed, “public” versions of Letters and Rulings that were withdrawn by the taxpayer.

(b) The department may, in its discretion, make “public” Letters and Rulings available to the public through the department’s publications, web site, emails, and other public information and educational resources. 10 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Rule 39-21-103-1. Request for Hearing.

Basis and Purpose. The statutory bases for this rule are sections 39 21 103 and 39-21 112(1), C.R.S. The purpose of this rule is to specify the information a request for hearing filed pursuant to section 39 21 103(2), C.R.S., must include and provide additional information regarding the hearing and appeal process. (1) Request for Hearing.

(a) A request for hearing made pursuant to section 39 21 103(2), C.R.S., must be submitted in writing within thirty (30) days from date of the mailing of the notice of deficiency. This thirty-day period is fixed by statute and cannot be extended by the executive director. If the taxpayer does not request a hearing within the thirty-day period, the executive director shall make a final determination and send a notice of final determination accompanied by a notice and demand for payment to the taxpayer. (b) The request for hearing must contain at least the following information: (i) Taxpayer's name, address, and account number.

(ii) The taxable period(s) involved.

(iii) The type and amount of tax in dispute.

(iv) A summary statement of the findings with which the taxpayer does not agree and the grounds upon which taxpayer relies for the purpose of showing that the tax is not due.

(v) The request for hearing must be signed by the taxpayer. (c) The executive director or his or her delegate may, in his or her sole discretion, grant the taxpayer additional time for submitting, in writing, the information described in paragraph (1)(b)(iv) of this rule. (d) For the purpose of this paragraph (1), the requirement that a request for hearing and any information relating thereto be submitted in writing is satisfied if such request and information are submitted to the Department by fax, email, or through Colorado.gov/RevenueOnline. A request for hearing submitted by fax or email must be submitted to the fax or email address designated by the Department for such submissions. A request for hearing submitted to a different fax or email address, as well as a request for hearing made orally, in person, or by telephone does not satisfy the requirement.

11 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (2) Formal Hearing. At any hearing requested by a taxpayer and conducted pursuant to section 39-21-103, C.R.S., the taxpayer must present his or her entire case in support of his or her position.

(3) Appeal. If a taxpayer does not, within thirty days of the mailing of a notice of final determination by the executive director, appeal the determination pursuant to section 39-21-105, C.R.S., the final determination is no longer subject to judicial review. Collection may then be enforced at any time within the collection periods provided by statute from the date of such assessment. The thirty-day period for filing an appeal is fixed by statute and cannot be extended by the executive director.

Rule 39-21-103-2. Assessments.

Basis and Purpose. The statutory bases for this rule are sections 39-21-103, 39-21- 112(1), and 39 22 103(1), C.R.S. The purpose of this rule is to define the term “assessment” as it is used in article 21 of title 39 and to clarify procedures and requirements related thereto.

(1) As used in article 21 of title 39, C.R.S., “assessment” includes: (a) the filing of the return as to the tax, penalty, and interest shown to be due thereon and, (b) the mailing or issuance of a notice and demand for payment as to any other tax imposed within the scope of article 21 of title 39, C.R.S., or any deficiency in tax, or any penalty or interest.

(2) In the case of an assessment made pursuant to paragraph (1)(a) of this rule, the Department may, without first issuing either notice of deficiency or notice of final determination, issue a notice and demand for payment with respect to any tax, penalty, and interest shown on the return, but not paid. (3) An assessment does not preclude any additional assessments for the same tax period. Unless the executive director has otherwise agreed, the executive director may, at any time within the period prescribed for assessment, issue a notice of deficiency whenever the executive director finds that the tax, penalties, or interest due is greater than the amount theretofore assessed and paid. (4) Nothing in this rule precludes the timely filing of an amended return by a taxpayer.

12 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Rule 39-21-103(1). Priority of Payments.

(1) Payments received by the Department shall be applied to a taxpayer’s liabilities in accordance with the following rules:

(a) A taxpayer can designate how a payment is to be applied to a liability owed to the Department only by remitting payment with the appropriate Departmental form (e.g., tax return, voucher, coupon, or, if an electronic payment, in conformity with paragraph (4) of this rule). Such payment shall be applied to the type of tax, fee, or charge for which the form is filed and for the period covered by the form in the order set forth below. A designation in a cover letter or a notation on a check will not designate the liability that will be paid and such payment will be applied as set forth in paragraph (1)(b).

(i) Tax, fee, or charge owed to the state or a local jurisdiction (in proportion to the share of the debt owed to each).

(ii) Related interest owed to the state or a local jurisdiction (in proportion to the share of the debt owed to each).

(iii) Related penalty owed to the state or a local jurisdiction (in proportion to the share of the debt owed to each).

(iv) Any excess payment shall be applied in accordance with paragraph (1)(b) of this rule.

(b) A payment remitted without an accompanying Departmental form shall be applied to the liability for the earliest debt recorded on the Department’s systems in the order set forth below:

(i) With respect to any account for which a Statement of Account has been issued, oldest debt to newest debt and applicable interest and penalty owed to the state or a local jurisdiction (in proportion to the share of the debt owed to each).

(ii) With respect to any account for which a Statement of Account has not been issued: (It will only be very rare circumstances in which a debt from multiple taxes and periods exist without a Statement of Account);

(A) Any International Registration Plan and applicable interest and penalty owed to the state.

(B) Any sales tax and applicable interest and penalty owed to the state or a local jurisdiction (in proportion to the share of the debt owed to each).

13 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (C) Any other tax, oldest to newest, that is owed to the Department and applicable interest and penalty owed to the state or local jurisdiction (in proportion to the share of the debt owed to each).

(iii) In any event after all other liabilities have been satisfied, any existing payment plan.

(c) This rule applies to taxes on income, sales/use, liquor, cigarette, other tobacco products, gas and special fuels, and severance, as well as periodic wage and severance tax withholding statements, estimated tax statements, annual reconciliation statements, and any other tax, fee, or and charge administered by the Division of Taxation of the Department of Revenue.

(d) The Department rejects any provision on a check, cover letter accompanying a check, or any other document submitted to the Department by or on behalf of the taxpayer, except as specifically agreed to by the Department, that purports to be an accord and satisfaction of any liabilities owed by the taxpayer to the Department upon the presentment of the check to a bank for payment. Notwithstanding this rejection, the Department is authorized to and will present for payment any form of payment remitted.

(2) Payments made by the Department for liabilities owed to a taxpayer, including tax refunds, shall be applied in the following order:

(a) Offset of liabilities owed to the Department, paid in the order set forth in paragraph (1) of this rule pursuant to §39-21-108(3), C.R.S. (b) Offset of other liabilities owed by taxpayer pursuant §39-21-108(3), C.R.S. (c) Offset of federal Internal Revenue Service liens and levies. (d) Payment of garnishments and other court orders for debt collection duly served on the Department.

(e) Refund of any tax, fee or charge due to taxpayer.

(f) Related interest on refund due.

(g) Related penalty due to taxpayer pursuant to §39-22-622(3), C.R.S. (3) Any payment received, or a refund made, by the Department shall be applied, as described in paragraphs (1) and (2) above, only to a taxpayer’s obligation, if any, on which a final determination has been made.

14 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (4) Accepted electronic payments include Automated Clearing House (ACH) or Electronic Funds Transfer (EFT). Payments made by ACH may designate to what liability and period the payment shall be applied by making such payment when filing a return, by including a TXP addenda record, or by including a TPP addenda record with such payment. Payments made by EFT are required to designate to what liability and period the payment shall be applied by submitting the required information when making such payment.

(5) The Department does not accept a wire transfer of funds unless such wire transfer is pre-approved by the Department. A wire transfer does not include a transfer by ACH or EFT.

(6) “Tax, fee, or charge” means any tax, fee or charge administered by the Department pursuant to §39-21-102, C.R.S.

(7) A taxpayer includes both the primary and secondary individual listed on a joint return. In the case of a secondary taxpayer that has filed a request pursuant to §39-21-108(3)(a)(I)(A), C.R.S., any refund paid to the taxpayer shall be divided pursuant to §39-21-108(3)(a)(I)(A), C.R.S.

Rule 39-21-105.5–1. Notices Sent by Mail.

Basis and Purpose. The statutory bases for this rule are sections 39-21-102, 39-21- 105.5, and 39-21-112(1), C.R.S. The purpose of this rule is to clarify statutory requirements related to mailing notices and to advise taxpayers of their duty to notify the Division of changes to their mailing addresses.

(1) Except as provided in section 39-21-105.5(2), C.R.S., a notice shall be mailed by first-class mail to the last-known address of the taxpayer. Such mailing is sufficient to satisfy the Division’s obligation under section 39-21-105.5(1), C.R.S., and this rule, irrespective of whether such address is the taxpayer’s current mailing address. In its discretion, the Division may send a notice by certified mail. (2) It is the duty of a taxpayer to notify the Division of any change to their mailing address, irrespective of whether the taxpayer has elected to receive any notice or other communication by electronic means as provided in section 39-21-105.5(2), C.R.S.

(3) As used in this rule, unless the context otherwise requires: (a) “Division” means the Taxation Division in the Department of Revenue. (b) “Notice” means any notice required to be given to any taxpayer by the Division pursuant to section 39-21-105.5, C.R.S.

(c) “Taxpayer” means a person obligated to account to the Division for a tax or fee within the scope specified in section 39-21-102, C.R.S. 15 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Rule 39-21-105.5–2. Electronic Notices or Other Communications. Basis and Purpose. The statutory bases for this rule are sections 39-21-102, 39-21- 105.5, 39-21-112(1), and 39-21-113(4), C.R.S. The purpose of this rule is to establish procedures that allow a taxpayer to voluntarily elect to receive any notice or other communication by electronic means.

(1) General Rule. If a taxpayer voluntarily elects to receive any notice or other communication by electronic means, then, with respect to any subsequent notice or other communication, the Division shall send an unencrypted email to each email address provided or authorized by the taxpayer, advising the taxpayer or representative to log in to the online portal or an alternative system as provided in paragraph (7) of this rule in order to view a new notice or other communication. This procedure will ensure to the greatest degree reasonably possible that the party viewing the electronic notice or other communication is the taxpayer for whom the notice or other communication is intended, or the taxpayer’s representative.

(a) An email sent pursuant to paragraph (1) of this rule satisfies any statutory mailing requirements and is deemed received by the taxpayer under any circumstance, including, but not limited to, the following: (i) An email sent to a taxpayer or a representative is returned to the Division as undeliverable.

(ii) The taxpayer or a representative does not:

(A) Open and view the email; or (B) Access and view the new notice or other communication on the online portal or an alternative system as provided in paragraph (7) of this rule.

(iii) The Division subsequently sends a copy of the corresponding notice or other communication by first-class mail as provided in paragraph (6)(a) of this rule.

(iv) The Division has determined to cancel the taxpayer’s election as provided in paragraph (6)(b) of this rule but has not yet completed the cancellation.

(b) The Division may, at its sole discretion, decide to send any notice or other communication by first-class mail to a taxpayer that has elected to receive electronic notices or other communications.

(2) Definitions. As used in this rule, unless the context otherwise requires: 16 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (a) “Confidential tax information” means any information obtained from any investigation conducted by the Division or its agents or disclosed in any document, report, or return filed in connection with any of the taxes or fees within the scope specified in section 39-21-102, C.R.S. (b) “Division” means the Taxation Division in the Department of Revenue. (c) “Notice” means any notice required to be given to any taxpayer by the Division pursuant to section 39-21-105.5, C.R.S.

(d) “Online portal” means Colorado.gov/RevenueOnline, or any successor system.

(e) “Other communication” means written correspondence from the Division to a taxpayer or representative containing confidential tax information, except that “other communication” does not include:

(i) A notice as defined in paragraph (2)(c) of this rule; (ii) An email confirming that an activity was attempted or completed in the taxpayer’s account on the online portal or an alternative system as provided in paragraph (7) of this rule;

(iii) An email that a taxpayer or representative elects in writing to exchange with the Division outside of the online portal or an alternative system as provided in paragraph (7) of this rule, including an electronic copy of a notice or other communication sent as an email attachment; or (iv) A general communication from the Division such as an announcement, guidance publication, form and instruction, due date reminder, rulemaking notice, social media post, or chatbot response.

(f) “Representative” means a person duly authorized to receive the taxpayer’s confidential tax information.

(g) “Taxpayer” means a person obligated to account to the Division for a tax or fee within the scope specified in section 39-21-102, C.R.S. (3) Taxpayer Election.

(a) In order to voluntarily elect to receive any notice or other communication electronically through the online portal, the taxpayer shall, on the online portal:

(i) Register for an account; and 17 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (ii) Enter the election in the account for all tax types, a specific tax type, or a specific tax matter as allowed by the Division. (b) The taxpayer’s voluntary election also applies to any representative with access to the account on the online portal.

(4) Division Obligations. For a taxpayer that has made an election pursuant to paragraph (3) of this rule, in order to ensure to the greatest degree reasonably possible the party viewing the electronic notice or other communication on the online portal is the taxpayer for whom the notice or other communication is intended, or the taxpayer’s representative, the Division shall: (a) Verify the identity of the person registering for an account on the online portal;

(b) Send an unencrypted email to any email address provided or authorized in the taxpayer’s account on the online portal, advising the taxpayer or representative to log in to the online portal to view a new notice or other communication; and (c) Make a notice or other communication available for viewing by the taxpayer or representative only after they have logged in to the online portal.

(5) Taxpayer Obligations. A taxpayer that has made an election pursuant to paragraph (3) of this rule shall:

(a) Ensure that the taxpayer email address provided in the online portal is configured to receive email from the Division in its inbox and does not return Division email as undeliverable;

(b) Promptly log in to the online portal and view any notice or other communication sent electronically pursuant to this rule, or ensure that a representative does;

(c) Promptly update the taxpayer’s account on the online portal: (i) Regarding any change to the taxpayer’s email address; (ii) Regarding any change to a representative’s access; or (iii) If the taxpayer wants to cancel the election; and (d) Continue to notify the Division of any change to the taxpayer’s mailing address.

(6) Undeliverable and Unread Electronic Notices or Other Communications. 18 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (a) If an email sent pursuant to this rule is returned to the Division as undeliverable, or the taxpayer or a representative does not promptly access and view an electronic notice or other communication on the online portal, the Division shall send a copy of the notice or other communication by first-class mail to the taxpayer’s last known mailing address; (b) If the Division sends a copy of a notice or other communication by first- class mail pursuant to paragraph (6)(a) of this rule more than once, the Division may cancel the taxpayer’s election; and (c) If the Division cancels the taxpayer’s election, the Division: (i) Shall inform the taxpayer of the cancellation by email and by first- class mail to the taxpayer’s last known mailing address; (ii) Shall send future notices and other communications by first-class mail to the taxpayer’s last known mailing address; and (iii) May reject any future election by the taxpayer to receive notices or other communications from the Division electronically.

(7) Alternative Systems. Notwithstanding paragraphs (3) through (6) of this rule, a taxpayer may agree to receive notices or other communications through an alternative system in lieu of the online portal. Such alternative system must be approved by the Division and, to the Division’s satisfaction, ensure to the greatest degree reasonably possible the party viewing the electronic notice or other communication is the taxpayer for whom the notice or other communication is intended, or the taxpayer’s representative.

Rule 39-21-108. Refund Claims.

Basis and Purpose. The statutory bases for this rule are sections 39-21-108 and 39- 21-112(1), C.R.S. The purpose of this rule is to set forth the procedures for claiming a refund.

(1) Any claim for refund must be made with forms prescribed by the Department, including all applicable schedules and attachments, completed and signed in accordance with any associated form instructions. Such forms, schedules, and attachments must clearly document and substantiate all facts and information necessary to determine the correct amount of tax due, if any. If the refund claim is for an overpayment resulting from an error on a previously filed return, an amended return, correcting the error, must be submitted with the claim for refund. (2) Warrants in payment of claims allowed by the executive director will be drawn in the names of persons entitled to the money.

19 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Rule 39-21-109. Interest Discount.

Basis and Purpose. The statutory bases for this rule are sections 39-21-109(1.5) and 39-21-112(1), C.R.S. The purpose of this rule is to clarify that a check returned to the Department of Revenue without payment does not constitute a payment sufficient to qualify for the 3% interest discount authorized by section 39-21-109(1.5), C.R.S. A check that is returned to the Department of Revenue without payment because of insufficient funds, a closed account, a stop payment order on the check, or for any other reason does not constitute a payment sufficient to qualify for the partial waiver of interest authorized by section 39-21-109(1.5), C.R.S.

Rule 39-21-110. Interest on Overpayments.

(1) Rate. Where interest is allowed, interest shall be paid upon the allowance of a credit or refund of any tax and upon any penalty or interest erroneously or illegally paid at the rate imposed under §39-21-110.5, C.R.S. (2) Date of Overpayment.

(a) For the purpose of this section the date of overpayment shall mean the date upon which such tax, penalty and interest was paid or the due date of the return, whichever is later. The date of overpayment for the carryback of a net operating loss, capital loss, or tax credit is the last day of the tax year in which the loss occurred or the credit was generated. (b) Interest on an overpayment will be computed from the date of overpayment of such tax, penalty, or interest to the date the order for refund or credit is issued.

(3) Refund Paid Within Ninety Days. Except as otherwise required by law, no interest will be paid in any case where the refund of the overpayment is issued by the Department within ninety days of the due date of the return. (4) Excessive Prepayments. Due to the burden articulated in §39-21-110(1.5)(b): (a) If the total prepayments (withholding, estimated payments, extension payments, sales tax refund, and other payments) are more than double the amount of the net tax liability, then no refund interest will be paid on any refund.

(b) If an amended return or claim for refund reduces the net tax liability or increases the prepayments, no refund interest will be paid on any refund if the total prepayments and prior payments are more than double the amount of the amended net tax liability.

20 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (c) If the taxpayer establishes that the prepayment was made incident to a bona fide and orderly discharge of an actual liability, or a liability reasonably assumed to be imposed by law, then interest will be paid. (5) Income Tax Overpayments. For income tax overpayments, see Rule 39-22-622 and HB 09-1219.

Rule 39-21-110.5. Rate of Interest.

(1) Net Colorado Tax Liability Defined.

(a) The net Colorado tax liability for income tax is defined as the total Colorado tax, alternative minimum tax and recapture of prior year credits less all income tax credits other than the state sales tax refund, withholding credits, and estimated tax credits.

(b) The net Colorado tax liability for severance tax is defined as the total tax less the ad valorem credit, the impact assistance credit, and the underground/lignitic coal credits.

(c) The net Colorado tax liability for sales tax is defined as the tax due after deducting the service fee and includes the tax due on items removed from inventory. The net tax liability and accompanying interest will be computed separately for sales tax collected from customers and for sales tax paid to vendors for each taxing jurisdiction.

(d) The net Colorado tax liability for consumer use tax is defined as the total tax less the credit for sales tax paid in another state. The net tax liability and accompanying rate of interest will be computed separately for each taxing jurisdiction included on a taxpayer's account.

(e) The net Colorado tax liability for wage withholding tax is defined as the tax withheld.

(f) The net Colorado tax liability for estate tax is defined as the total tax payable to Colorado from the estate tax and the generation skipping transfer tax.

(g) The net Colorado tax liability for retailers use tax is defined as the tax due after deducting the service fee. The net tax liability and accompanying rate of interest will be computed separately for each taxing jurisdiction included on a taxpayer's account.

(h) The net Colorado tax liability for gasoline and special fuel tax is defined as the total tax due less the tax paid at retail during the tax period. For international fuel tax agreement (IFTA) payments, any tax refund subject to interest shall only include a refund of Colorado fuel taxes. 21 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (i) The net Colorado tax liability for gasoline or special fuel tax paid by a distributor is defined as the tax imposed on the gasoline acquired during the month less the 2% credit for losses and the .5% credit for expenses and bad debts.

(j) The net Colorado tax liability for passenger mile tax is defined as the total passenger mile tax due.

(k) The net Colorado tax liability for cigarette tax is gross amount of tax due less the discount allowed.

(l) The net Colorado tax liability for tobacco products tax is the total tax computed on the invoice price less exempt sales, the credit for exported, returned and destroyed products and the service fee allowed. (2) The calculation of the net Colorado tax liability will include all tax and credit adjustments including those reported on original and amended returns, refund claims, and audit adjustments. This calculation will include adjustments reported on a refund claim, which is the subject of the interest computation. (3) Multiple amended returns and claims for refund may be combined in determining the correct interest rate to be paid.

(4) The period for which the net tax liability is computed generally means the reporting period for which the tax return is filed. If a refund claim cannot be accurately matched to the original return reporting period, the Department shall make a determination of the refund distribution when determining the appropriate interest rate to be paid.

Rule 39-21-111. Jeopardy Assessment and Demands.

(1) Termination of Taxable Period. The provisions of 39-21-111, C.R.S. 1973 shall include, but shall not be limited to, cases where a taxpayer intends to leave the state, where properties are being moved from the state or sold and the proceeds transported beyond the borders of Colorado, or where funds are being dissipated. In any case where the executive director finds it necessary to immediately collect the tax, he may declare the taxable period closed, immediately demand payment of the tax and levy upon any property or money of the taxpayer.

(2) Demand for Payment. If the tax has not been paid in full or no return has been filed, or whenever the examination of a return discloses a deficiency, and the executive director of the department of revenue believes that the collection of the tax or deficiency will be jeopardized by delay, a jeopardy assessment will be made and a distraint warrant issued immediately. The assessment is due and payable at the time specified in the notice of assessment. 22 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (3) Stay of Collection. If bond or other security, acceptable to the executive director, is given in an amount sufficient to secure payment of the amount(s) due on a jeopardy assessment, collection of same may be stayed by the executive director.

Rule 39-21-112(1). Extension of Time for Filing a Tax Return. (1) General Rule. Due to natural disaster or for other reasons, the Executive Director may, in his or her discretion, authorize an extension of time within which to file state tax returns, including but not limited to Colorado state income tax returns, Colorado sales tax returns, or Colorado returns for any other tax administered by the Department. In exercising that discretion, the Executive Director shall consider whether the Internal Revenue Service has authorized an extension for filing federal income tax returns due to natural disaster or for other reasons, whether similar hardships have occurred in the state of Colorado, and any other good cause.

(2) Any extension of time authorized pursuant to this rule shall be announced on the Department’s website.

Rule 39-21-112(3.5). Notice and Reporting Requirements for Non-Collecting Retailers.

Basis and Purpose. The bases for this rule are § 39-21-112(1) and § 39-21-112(3.5), C.R.S. The purpose of this rule is to clarify how a retailer that does not collect Colorado sales tax shall comply with notice and reporting requirements of § 39-21-112(3.5), C.R.S.

(1) General Rule. Every Non-Collecting Retailer shall:

(a) Provide a Transactional Notice to all Colorado Purchasers as described in paragraph (4) of this rule;

(b) Provide an Annual Purchase Summary to all Colorado Purchasers by January 31 of each year as described in paragraph (5) of this rule; and (c) Provide an Annual Customer Information Report to the Department by March 1 of each year as described in paragraph (6) of this rule. (2) Definitions.

(a) “Annual Customer Information Report” means the annual report required to be sent by a Non-Collecting Retailer notifying the Department of the information required pursuant to paragraph (6) of this rule. (b) “Annual Purchase Summary” means the notification required to be sent by a Non-Collecting Retailer notifying Colorado Purchasers of the information required pursuant to paragraph (5) of this rule.

23 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (c) “Colorado Purchaser” means a purchaser who makes a Colorado Reportable Purchase. If tangible personal property is purchased by one party, who may be inside or outside of Colorado, and is shipped to another party in Colorado, the Colorado Purchaser is the purchaser of the tangible personal property, not the recipient of the tangible personal property. (d) “Colorado Reportable Purchase” means:

(i) With respect to sales of tangible personal property that are shipped, a purchase that is shipped to an address in Colorado, or (ii) With respect to sales of tangible personal property that are downloaded or otherwise delivered electronically, a purchase that the Non-Collecting Retailer, using a commercially reasonable method, determines is to be downloaded or otherwise used by a person located in Colorado. A commercially reasonable method may be based on the Non-Collecting Retailer’s existing billing, customer-tracking, or other systems. The commercially reasonable method used by a Non-Collecting Retailer must be the same for each purchaser. Unless good cause exists to use a different method, the Non-Collecting Retailer must also use the same commercially reasonable method every year the Non-Collecting Retailer makes sales and must use such method for all states into which the Non-Collecting Retailer ships tangible personal property. (iii) A Colorado Reportable Purchase does not include a purchase on which sales tax was collected at the time of the sale. This is true whether the sale was made by the Non-Collecting Retailer or a third-party and whether the collection was made voluntarily or was required.

(iv) A Colorado Reportable Purchase does not include a purchase of tangible personal property that is exempt from Colorado sales and use tax, the sale of a service that is separable and separately stated from the sale of tangible personal property, or shipping charges or other fees that are separable and separately stated from the sale of the tangible personal property.

(v) To the extent that disclosure of the purchaser’s purchase or rental of video tapes, DVDs, Blu-Ray disks, or other video materials would violate 18 U.S.C. 2710A, the Colorado Reportable Purchase shall not include such purchases or rentals.

(e) “Department” means the Colorado Department of Revenue. 24 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (f) “Non-Collecting Retailer” means a retailer that sells tangible personal property to Colorado Purchasers and does not collect Colorado sales or use tax. All corporations included in a controlled group of corporations pursuant to 26 U.S.C. 1563 shall be considered to be a single Non- Collecting Retailer for purposes of this rule. A retailer that collects Colorado sales or use tax is not a Non-Collecting Retailer, regardless of whether the retailer is obligated to collect the tax or voluntarily collects the tax.

(g) “Total Gross Sales” means the total sales of Colorado Reportable Purchases made by a Non-Collecting Retailer. If the Non-Collecting Retailer makes exempt sales of tangible personal property, such sales may be excluded from the Total Gross Sales calculation; however the Non-Collecting Retailer is not obligated to exclude such sales. (h) “Transactional Notice” means the notice required to be provided by a Non- Collecting Retailer to a Colorado Purchaser at the time a Colorado Reportable Purchase is made notifying the Colorado Purchaser of the information required pursuant to paragraph (4) of this rule. (3) [Expired 05/15/2018 per House Bill 18-1253] (4) Transactional Notices. A Non-Collecting Retailer shall provide a Transactional Notice with every Colorado Reportable Purchase not exempt from Colorado sales and use tax.

(a) Online Purchases. For all purchases made online, a Transactional Notice shall be prominently located in close proximity to the “Tax” or “Sales Tax” line at checkout, or if no “Tax” line is available, in close proximity to the “Total Price” line shown at checkout.

(i) If it is impracticable for the Non-Collecting Retailer to display the Transactional Notice as described above, the Non-Collecting Retailer shall prominently display a hyperlink as prescribed in this paragraph (4)(a)(i). The hyperlink shall read “See here for information about the state tax you may owe” or use similar language. The hyperlink shall direct to the principal Transactional Notice. The hyperlink shall appear in close proximity to the “Tax” or “Total Price” line shown:

(A) at checkout (B) on the invoice or order confirmation; or (C) on the webpage for the product purchased.

25 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (ii) The use of online marketplaces to make sales does not relieve a Non-Collecting Retailer from the obligation to provide a Transactional Notice with each Colorado Reportable Purchase. However, a marketplace may provide the Transactional Notice to Colorado Purchasers on behalf of the Non-Collecting Retailer. (b) All Other Purchases Not Made Online. For all other purchases not made online, a Transactional Notice must be prominently located on any order form or advertisement in close proximity to the “Total Price” line or explained orally to the Colorado Purchaser over the phone. (i) If it is impracticable for the Non-Collecting Retailer to display the Transactional Notice as described above, the Non-Collecting Retailer shall state on the invoice or confirmatory communication near the “Tax” or “Total Price” line shown “See below/attached for information about the state tax you may owe” or similar language and provide the principal Transactional Notice either elsewhere on the invoice or confirmatory communication or in a supplemental document transmitted to the purchaser with the invoice or confirmatory communication.

(c) The Transactional Notice shall inform the purchaser that: (i) The retailer does not collect Colorado sales or use tax; (ii) The purchase is not exempt from Colorado sales or use tax merely because it is made over the Internet or by other remote means; (iii) The State of Colorado requires purchasers to (A) report all purchases that are taxable in Colorado and for which no tax was collected by the retailer and (B) pay tax on those purchases. (d) The Transactional Notice may inform the purchaser that: (i) The retailer will provide to the purchaser an annual purchase summary of all purchases made by the purchaser during the previous calendar year in order to assist the purchaser in filing his or her tax return;

(ii) Details of how and when to file this return may be found at the Colorado Department of Revenue’s website, www.colorado.gov/tax/usetax or successor URL;

26 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (iii) The retailer is required by law to provide the Colorado Department of Revenue with an annual report indicating the name of the purchaser, the total dollar amount of all the purchaser’s Colorado purchases made throughout the calendar year, and the purchaser’s billing, notice, and shipping addresses. The retailer will not provide any other details of the transaction to the Department. (e) With respect to any subscription or membership whereby the retailer ships products to a customer at regular intervals, without any additional action by the customer (commonly referred to as subscription boxes or “_______ of the month” clubs), a Transactional Notice is required only with respect to any transaction whereby the customer subscribes, enrolls or renews her or his subscription or membership. Separate Transactional Notices are not required for the subsequent, repeated shipment of products to the customer made automatically and without additional action by the customer.

(f) If the Non-Collecting Retailer is required to provide a similar transactional type notice for another state, in addition to Colorado, and the Non- Collecting Retailer provides a single transactional type notice to all purchasers, a notice will be sufficient if it contains substantially the same information as required in paragraph (4)(c) of this rule but is provided in a form that is generalized to any state.

(g) Penalties.

(i) The Non-Collecting Retailer shall pay a penalty of $5 for each sale to a Colorado Purchaser that does not provide the Transactional Notice.

(ii) If the Non-Collecting Retailer meets the criteria below, the penalty assessed against the Non-Collecting Retailer in a single year, pursuant to this section, shall not exceed the specified amounts: (A) For a Non-Collecting Retailer that reasonably had no knowledge of the requirement to provide Transactional Notices and began to provide the required Transactional Notices within 60 days of demand by the Department, $25,000;

(B) For a Non-Collecting Retailer that sells only tangible personal property that is not taxable in Colorado or sells tangible personal property only to Colorado Purchasers that are not subject to sales or use tax, no penalty shall be collected.

(C) [Expired 05/15/2018 per House Bill 18-1253] 27 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (iii) The Executive Director of the Department may waive all or any portion of a penalty for reasonable cause shown.

(5) Annual Purchase Summary.

(a) A Non-Collecting Retailer must send an Annual Purchase Summary to all Colorado Purchasers by January 31 of each year summarizing the Colorado Purchaser’s Colorado Reportable Purchases for the prior calendar year. The notice shall meet the following requirements: (i) Except as otherwise provided, the Annual Purchase Summary shall be sent by first class mail to the last known address of the Colorado Purchaser. The envelope containing the Annual Purchase Summary shall be prominently marked with the words “Important Tax Document Enclosed”.

(A) The last known address shall be determined in the following order of preference:

(I) An address (“notice address”) expressly provided by the Colorado Purchaser to the Non-Collecting Retailer for the purpose of receiving the Annual Purchase Summary, or, if not applicable, (II) The Colorado Purchaser’s billing address, or, if not known, (III) The Colorado Purchaser's shipping address, or, if not known or applicable, (IV) Any other physical address for the Colorado Purchaser that can be ascertained by the Non- Collecting Retailer using any commercially reasonable method based on the Non-Collecting Retailer’s existing billing, customer-tracking, or other systems.

(V) If no physical address may be reasonably ascertained using any of the above methods, the Non-Collecting Retailer shall send the Annual Purchase Summary to the most recent email address the Non-Collecting Retailer has for the Colorado Purchaser.

(ii) The Annual Purchase Summary shall inform the purchaser that: 28 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (A) the total amount paid by the Colorado Purchaser, including any taxable shipping charges or other taxable fees charged to the customer, during the prior calendar year. However, if a Non-Collecting Retailer is reasonably certain the charges and fees are not subject to tax in Colorado, such charges and fees may be excluded;

(B) a statement indicating that the State of Colorado requires the purchaser to file a sales or use tax return and pay tax on all taxable purchases for which no tax was collected by the retailer;

(C) a statement indicating that the retailer is required by law to provide the Colorado Department of Revenue with the purchaser’s name, the total dollar amount of purchases made by the purchaser during the prior calendar year, and all of the purchaser’s billing, notice, and shipping addresses, but no other information about the purchase(s) will be provided to the Department;

(D) if available, the dates of each Colorado Reportable Purchase;

(E) if available, the amounts of each Colorado Reportable Purchase, including any taxable shipping charges or other taxable fees charged to the customer. However, if a Non- Collecting Retailer is reasonably certain the charges and fees are not subject to tax in Colorado, such charges and fees may be excluded;

(F) if available, a description of the type of item(s) purchased (e.g., books, food, consumer electronics, household appliances); and (G) if known by the retailer, whether the purchase is subject to or exempt from Colorado sales and use tax.

(iii) The Annual Purchase Summary may state that details of these requirements, including how to file, may be found at the Colorado Department of Revenue’s website, www.colorado.gov/tax/usetax or successor URL.

(iv) If the net value of a Colorado Purchaser’s return(s) and purchase(s) in a year are equal or result in a credit, then the Non-Collecting Retailer need not send an Annual Purchase Summary to the Colorado Purchaser.

29 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (b) [Expired 05/15/2018 per House Bill 18-1253] (c) Penalties.

(i) The Non-Collecting Retailer shall pay a penalty of $10 for each required Annual Purchase Summary that is not sent to a Colorado Purchaser.

(ii) If the Non-Collecting Retailer meets the criteria below, the penalty assessed against the Non-Collecting Retailer, pursuant to this section, shall not exceed the specified amounts:

(A) For a Non-Collecting Retailer that sent the Annual Purchase Summaries to all Colorado Purchasers within 30 days after the due date, $1,000;

(B) For a Non-Collecting Retailer that reasonably had no knowledge of the requirement and sent the Annual Purchase Summaries to all Colorado Purchasers within 60 days after demand by the Department to issue such Annual Purchase Summaries, $50,000;

(C) For a Non-Collecting Retailer that sells only tangible personal property that is not taxable in Colorado or sells tangible personal property only to Colorado Purchasers that are not subject to sales or use tax, no penalty shall be collected.

(D) [Expired 05/15/2018 per House Bill 18-1253] (E) [Expired 05/15/2018 per House Bill 18-1253] (iii) The Executive Director of the Department may waive all or any portion of the penalty for reasonable cause shown.

(6) Annual Customer Information Report.

(a) Any Non-Collecting Retailer who is required to provide at least one Annual Purchase Summary to a Colorado Purchaser must file an Annual Customer Information Report with the Department containing the following information:

(i) The name of each Colorado Purchaser;

(ii) The billing address, notice address, and shipping address of each Colorado Purchaser, if the information is known by the Non- Collecting Retailer;

30 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (iii) The total dollar amount of Colorado Reportable Purchases, including taxable shipping charges or other taxable fees charged to the customer, made by the Non-Collecting Retailer to each Colorado Purchaser during the prior calendar year. However, if a Non-Collecting Retailer is certain the charges and fees are not subject to tax in Colorado, such charges and fees may be excluded. No other information about the purchase shall be provided.

(b) If the Colorado Purchaser provided more than one Colorado billing address, notice address, or shipping address, the Non-Collecting Retailer shall provide all such addresses to the Department.

(c) If the Non-Collecting Retailer made more than $100,000 worth of Total Gross Sales in Colorado during the prior calendar year, the Non-Collecting Retailer shall electronically send to the Department the Annual Customer Information Report. The Department shall publish on its website, by November 1st of each year, the required format and data elements of the Annual Customer Information Report and shall publish details on how the Annual Customer Information Report shall be transmitted to the Department.

(d) If a Non-Collecting Retailer is required to provide one or more Colorado Purchaser(s) with an Annual Purchase Summary, then the Non-Collecting Retailer must include all the Colorado Reportable Purchases made by all Colorado Purchasers in its Annual Customer Information Report, including any Colorado Reportable Purchases made by de minimis Colorado Purchasers.

(e) If the Non-Collecting Retailer is part of a controlled group of corporations pursuant to 26 U.S.C. 1563 and the group of corporations wishes to file the Annual Customer Information Report for all Non-Collecting Retailers within the group, any entity within such group of corporations may prepare and file the Annual Customer Information Report so long as such Annual Customer Information Report includes all Colorado Purchasers and all Colorado Reportable Purchases made from Non-Collecting Retailers within the group during the prior calendar year. However, a controlled group of corporations may choose for each individual Non-Collecting Retailer to file the Annual Customer Information Report separately. (f) Penalties.

31 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (i) If a Non-Collecting Retailer fails to file the Annual Customer Information Report or files an incomplete Annual Customer Information Report, the Non-Collecting Retailer shall pay a penalty equal to $10 for each Colorado Purchaser that should have been included in the Annual Customer Information Report, but was not included.

(ii) If the Non-Collecting Retailer meets the criteria below, the penalty assessed against the Non-Collecting Retailer, pursuant to this section, shall not exceed the specified amounts:

(A) For a Non-Collecting Retailer that filed a complete Annual Customer Information Report within 30 days of the due date, $1,000;

(B) For a Non-Collecting Retailer that reasonably had no knowledge of the requirement and filed a complete Annual Customer Information Report within 60 days of demand by the Department, $50,000;

(C) For a Non-Collecting Retailer that sells only tangible personal property that is not taxable in Colorado or sells tangible personal property only to Colorado Purchasers that are not subject to sales or use tax, no penalty shall be collected.

(D) [Expired 05/15/2018 per House Bill 18-1253] (E) [Expired 05/15/2018 per House Bill 18-1253] (iii) The Executive Director of the Department may waive all or any portion of the penalty for other reasonable cause shown. Rule 39-21-116. Closing Agreements.

(1) Application. Where, under the provisions of this section, it is necessary to make a final determination of tax liability for purposes of facilitating the closing of an estate, or upon dissolution of a corporation or partnership, or termination of a trust or receivership, such determination may be made for the taxpayer upon application therefor on the form Agreement as to Final Determination of Tax Liability. Such agreements shall be deemed final only in the absence of fraud or misrepresentation.

(2) Persons Liable for Unpaid Taxes. If such request for final determination is not made, then the personal representative of the decedent or the surviving directors of the corporation or any member of a partnership shall become personally liable for any unpaid tax to the extent of the property distributed. 32 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (3) Transferee Liability. Irrespective of the termination of the liability of the personal representative, trustee, receiver, or other fiduciary, or the surviving directors, or members of a partnership, the distributees of the decedent's estate, or of the trust's, receivership's or corporation's or partnership's assets will remain liable for the tax due from the decedent, decedent's estate, trust, receivership, corporation, or partnership to the same extent and during the same period as the decedent, decedent's estate, trust, receivership, corporation, or partnership would have been liable had the assets of the estate, trust, receivership, corporation or partnership not been distributed. If deficiency assessment is made under this section the matter will proceed as on any other deficiency assessment by payment in due course or through protest and hearing to the courts. (4) Action Required Within Eighteen Months.

(a) After a filing of a final return for a decedent, a decedent's estate, a trust, a receivership, a corporation or a partnership or after the filing of any return for a decedent's estate, a trust, or receivership a request may be made by the personal representative of the decedent, the decedent's estate, or the trustee, receiver or other person acting in a fiduciary capacity, or any director of the corporation or any member of a partnership that the executive director within 18 months either execute the agreement as to a final determination of tax liability tendered with the request or make a final determination of the tax. The request, in order to be effective, must be transmitted separately from any other document, must set forth the classes of tax and the taxable periods for which the final determination of tax liability is requested, and must clearly indicate that it is a request for a final determination of tax liability under the provisions of this section. (c) If, within such 18 month period, the executive director shall neither execute the tendered agreement nor make a final determination of the tax due in the manner provided in 39-21-103, C.R.S. 1973, the personal representative, trustee, receiver or other fiduciary, or surviving directors of the corporation or member of a partnership shall be relieved of personal liability for the tax period described in the tendered agreement. Rule 39-21-116.5. Penalties for Officers or Members.

Basis and Purpose. The statutory bases for this rule are sections 39-21-101(4), 39-21- 102(1) and (7), 39-21-112(1), and 39-21-116.5, C.R.S. The purpose of this rule is to clarify the liability for the penalty imposed by section 39-21-116.5, C.R.S., and establish requirements for the administration thereof.

(1) This rule applies to all taxes and fees within the scope of article 21 of title 39, C.R.S., that a corporation, partnership, or limited liability company is required to collect, account for, and pay over to the Department.

33 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (2) Any application for licensure or registration filed by a corporation, partnership, or limited liability company with respect to any tax or fee specified in this paragraph (2) shall state, under penalty of perjury, the name or names of any and all officers of the corporation or members of the partnership or limited liability company who are responsible for tax compliance. The Department may deny any application that fails to comply with the requirements of this paragraph (2). The requirements of this paragraph (2) shall apply with respect to:

(a) sales tax imposed pursuant to article 26 of title 39, C.R.S.; (b) use tax imposed pursuant to article 26 of title 39, C.R.S.; (c) any local taxes collected, administered, and enforced pursuant to article 26 of title 39, C.R.S.;

(d) wage withholding required pursuant to section 39-22-604, C.R.S.; (e) fuel tax imposed pursuant to article 27 of Title 39, C.R.S.; (f) retail marijuana sales tax imposed pursuant to article 28.8 of title 39, C.R.S.;

(g) oil and gas severance tax withholding required pursuant to section 39-29- 111, C.R.S.;

(h) retail delivery fees imposed pursuant to sections 24-38.5-303, 25-7.5-103, 43-4-218, 43-4-805, 43-4-1203, and 43-4-1303, C.R.S.; and (i) daily vehicle rental fee imposed pursuant to section 43-4-804, C.R.S. (3) A corporation, partnership, or limited liability company required to collect, account for, and pay over Colorado taxes or fees shall, at all times, designate any and all officers or members who are responsible for compliance with such requirements. Delegation of duties to subordinates shall not relieve such officers or members from responsibility for collecting, accounting for, and paying over taxes or fees when due. In the event that an officer or member previously designated as responsible for collecting, accounting for, and paying over any tax or fee resigns as an officer or member or otherwise ceases to be responsible for collecting, accounting for, and paying over taxes or fees, the corporation, partnership, or limited liability company shall designate one or more responsible officers or members by amending its account information with the Department. In the event that no responsible officer or member is designated, the responsible persons are presumed to include, but not be limited to, the president, chief executive officer, chief operating officer, chief financial officer, and treasurer of a corporation, all general partners of a partnership, and all managing members or managers of a limited liability company.

34 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (4) A person against whom a penalty is asserted under section 39-21-116.5, C.R.S., is a “taxpayer” within the meaning of section 39-21-101(4), C.R.S. (5) The imposition of penalties under section 39-21-116.5, C.R.S., against a particular responsible officer or member for a particular tax or fee period does not preclude the imposition of a penalty against other responsible officers or members for the same tax or fee period, regardless of who the taxpayer designated and named as responsible for tax compliance pursuant to paragraphs (2) and (3) of this rule, nor does it preclude the imposition of a penalty against the same responsible officer or member for a different tax or fee period. (6) For purposes of section 39-21-116.5, C.R.S., a finding of willful failure to collect, account for, or pay over tax or fee does not require the Department or its Executive Director to establish a bad motive or a specific intent to defraud the Department. An officer of a corporation, a general partner of a partnership, or a managing member or manager of a limited liability company is presumed to have willfully failed to collect, account for, or pay over a tax or fee required to be collected, accounted for, and paid over to the Department if: (a) during the relevant tax or fee periods, the officer of the corporation, general partner of the partnership, or managing member or manager of the limited liability company was a person responsible for tax or fee compliance by the corporation, partnership, or limited liability company, and;

(b) the corporation, partnership, or limited liability company; (i) intentionally failed to collect tax or fee as required by law; (ii) acted with reckless disregard of a known or obvious risk that tax or fee due under Colorado law might not be collected;

(iii) used collected tax or fee for any purpose other than remitting such collected tax or fee to the Department, including, for example, for its own benefit or to pay creditors;

(iv) acted with reckless disregard of a known or obvious risk that collected tax or fee might not be remitted to the Department; or (v) failed to promptly correct the failure to remit collected tax or fee after being notified by the Department that such funds had not been paid over.

35 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Rule 39-21-119. Date Return or Payment Deemed Filed or Made When Sent by Mail.

Basis and Purpose. The statutory bases for this rule are sections 39-21-102, 39-21- 112(1) and 39-21-119, C.R.S. The purpose of this rule is to define the date a return or payment sent by United States mail is deemed filed with or made to the Department. (1) General Rule. Except as otherwise provided in this rule, a return or payment sent to the Department by United States mail is deemed filed or made on the date of its postmark.

(a) A return or payment is deemed timely filed or made if the date of its postmark is on or before its due date; and (b) A return or payment is deemed delinquent if the date of its postmark is after its due date.

(2) Definitions. As used in this rule, unless the context otherwise requires: (a) “Competent evidence” means testimony from a person other than the taxpayer or documentation, including a record authenticated by the United States Postal Service as described in section 39-21-119(2), C.R.S., either of which is credible and sufficient to prove:

(i) That the return or payment was sent to the Department by United States mail on a specified date; and (ii) Whether the return or payment was sent before or after the last collection of mail from the place of deposit.

(b) “Payment” means any payment required to be made within the scope specified in section 39-21-102, C.R.S.

(c) “Postmark” means the official postage cancellation mark that is affixed on the envelope or other appropriate wrapper in which the return or payment was sent to the Department and indicates the place and date of deposit in the United States mail.

(d) “Return” means any report, claim, tax return, statement, or other document required or authorized to be filed within the scope specified in section 39-21-102, C.R.S.

(e) “Taxpayer” means a person required to account to the Department for a tax or fee imposed within the scope specified in section 39-21-102, C.R.S. 36 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (f) “United States mail” means the United States Postal Service or a designated delivery service determined by the Commissioner of the Internal Revenue Service to satisfy the conditions of section 7502(f)(2) of the Internal Revenue Code.

(3) Rejected Return or Payment.

(a) A return rejected by the Department is deemed to not have been filed until it is corrected and accepted by the Department; and (b) A payment rejected or returned by a financial institution is deemed to not have been made.

(4) Due Dates. In order for a return or payment to be deemed timely filed or made on a Saturday, Sunday, or legal holiday under section 39-21-119(3), C.R.S., the Department shall extend its due date to the next business day. (a) If the due date for a federal income tax return or payment is extended because of Emancipation Day in the District of Columbia, the due date for any corresponding Colorado income tax return or payment is also extended to coincide with the federal due date.

(b) If the due date for a return or payment falls upon Columbus Day, a federal holiday that the State of Colorado does not observe, the due date is extended to the next business day.

(5) Proper Mailing. This rule only applies if the return or payment was sent in an envelope or other appropriate wrapper that displayed sufficient prepaid postage and was properly addressed to the agency, officer, or office with which the return or payment was required to be filed or made.

(6) Proof of Mailing. The taxpayer bears the burden to demonstrate, by competent evidence, when a return or payment was sent to the Department, if the return or payment was:

(a) Sent to the Department by United States mail but not received by the Department; or (b) Deemed delinquent because its postmark is illegible, erroneous, or omitted.

Rule 39-21-119.5. Requirements for Electronic Filing and Electronic Payment. Basis and Purpose. The statutory bases for this rule are sections 39-21-102, 39-21- 112(1), 39-21-119, 39-21-119.5, 39-21-120, and 39-22-608 C.R.S. The purpose of this rule is to clarify the requirements for electronic filing and electronic payment, the penalty for failure to comply therewith, and the hardship waiver available therefrom. 37 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (1) General Rule. Except as otherwise provided in this rule, a return or payment sent to the Department electronically is deemed filed or made on the date and time of its electronic postmark.

(a) A return or payment is deemed timely filed or made if the date of its electronic postmark is on or before its due date; and (b) A return or payment is deemed delinquent if the date of its electronic postmark is after its due date.

(2) Definitions. As used in this rule, unless the context otherwise requires: (a) “Competent evidence” means testimony from a person other than the taxpayer or documentation, either of which is credible and sufficient to prove that the return or payment was sent to the Department electronically on a specified date at a specified time.

(b) “Electronic postmark” means a record of the date and time when: (i) The electronic payment is requested to be made to the Department; (ii) The transmitter received the return on its host computer system, if the Internal Revenue Service (IRS) and the Department accept the first transmission of the return through the IRS Federal/State E-file program; or (iii) The Department received the return, if the Department accepts the return, either through:

(A) The Department’s online portal (Colorado.gov/RevenueOnline);

(B) The Department’s Sales and Use Tax System;

(C) A transmitter using secure file transfer protocol; or (D) Another electronic means approved by the Department. (c) “Payment” means any payment required to be made within the scope specified in section 39-21-102, C.R.S.

(d) “Taxpayer” means a person required to account to the Department for a tax or fee imposed within the scope specified in section 39-21-102, C.R.S. (e) “Taxpayer ID number” for an electronic payment means one of the following numbers:

(i) Colorado Account Number (CAN), 38 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (ii) Social Security Number (SSN), (iii) Individual Taxpayer Identification Number (ITIN), (iv) Federal Employer Identification Number (FEIN), or (v) Electronic Funds Transfer (EFT) number obtained from the Department prior to making a payment.

(f) “Transmitter” means a person other than the taxpayer that is: (i) authorized by the IRS to transmit electronic tax return information directly to the IRS, or (ii) authorized by the Department to transmit electronic tax return information directly to the Department.

(3) Electronic Filing. The electronic filing of a return must be completed by electronic means in a form and format that has been approved by the Department. A return filed electronically is deemed filed on the date of its electronic postmark, except that:

(a) Time Zone Adjustment. If a return is deemed delinquent and the taxpayer’s residence is in a different time zone from the transmitter or the Department, the taxpayer may request that the Department adjust the date and time of the electronic postmark to the time zone of the taxpayer’s residence;

(b) IRS Receipt Date Adjustment. A return the Department accepts through the IRS Federal/State E-file program is deemed filed on the IRS receipt date if:

(i) The transmitter receives the return on or before the due date of the return but transmits the return to the IRS more than two days after the due date; or (ii) The electronic postmark is after the due date of the return; and (c) Rejected Return. A return rejected by the IRS or the Department is deemed to not have been filed until the taxpayer corrects the return and the Department accepts it, except that:

(i) If the Department accepts through the IRS Federal/State E-file program a return that the IRS previously rejected but the taxpayer corrected within the IRS perfection period for timely filing a corrected return after rejection, the return is deemed filed on the IRS rejection date.

39 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (4) Electronic Payment. A payment of any tax or fee to the Department by electronic funds transfer (EFT) must be made via an electronic means approved by the Department, including automated clearing house (ACH) credit or debit, credit or debit card, and international wire transfer.

(a) Required Information. An EFT payment must designate a taxpayer ID number, the type of tax or fee, and the tax period to which the payment will apply.

(i) An ACH credit payment must include this information in a Tax Payment (TXP) or Third Party Payment (TPP) addenda record. (ii) For the taxpayer ID number, a Digital Bill Pay ACH debit payment must use an EFT number obtained in advance from the Department.

(b) Date and Time of Payment. A payment with an electronic postmark at or before 11:59 P.M. Mountain Time is deemed made on that day, except that:

(i) A payment made via ACH credit with an electronic postmark on a business day before the originating financial institution’s cut-off time is deemed made on that day;

(ii) A payment made via Digital Bill Pay ACH debit, or any such successor payment program, with an electronic postmark on a business day at or before 3:59 P.M. Mountain Time is deemed made on that day;

(iii) A payment made via ACH credit or Digital Bill Pay ACH debit, or any such successor payment program, with an electronic postmark that is not on a business day, or is after the time required pursuant to section 39-21-119.5(6)(c), C.R.S., and paragraphs (4)(b)(i) and (ii) of this rule, is deemed made on the following business day; and (iv) A payment rejected or returned by a financial institution is deemed to not have been made.

(5) Due Dates. In order for a return or payment to be deemed timely filed or made on a Saturday, Sunday, or legal holiday under section 39-21-119(3), C.R.S., the Department shall extend its due date to the next business day. (a) If the due date for a federal income tax return or payment is extended because of Emancipation Day in the District of Columbia, the due date for any corresponding Colorado income tax return or payment is also extended to coincide with the federal due date.

40 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (b) If the due date for a return or payment falls upon Columbus Day, a federal holiday that the State of Colorado does not observe, the due date is extended to the next business day.

(6) Proof of Submission. The taxpayer bears the burden to demonstrate, by competent evidence, when a return or payment was sent to the Department, if the return or payment was:

(a) Sent to the Department electronically but not received by the Department; or (b) Deemed delinquent.

(7) Penalty. A taxpayer who fails or refuses to file a return or make a payment electronically as required by section 39-21-119.5, C.R.S., or any Department rule, is subject to the penalty imposed by section 39 21 119.5(5), C.R.S., regardless of whether the taxpayer files the return or makes the payment by another means, and regardless of whether the Department processes such return or payment, except that such penalty does not apply to: (a) A return or payment to which a hardship waiver applies pursuant to section 39-21-119.5(6), C.R.S., and paragraph (8) of this rule; or (b) Annual withholding statements required to be filed electronically pursuant to section 39-22-604(6)(b), C.R.S., and 1 CCR 201-2, Rule 39-22- 604(8)(b).

(8) Hardship Waiver. The Department may grant a request for a waiver from the requirements to file returns electronically or make electronic payments of any tax or fee enumerated in section 39-21-119.5, C.R.S., or any Department rule, except the requirement to file annual withholding statements electronically pursuant to section 39-22-604(6)(b), C.R.S., and 1 CCR 201-2, Rule 39-22- 604(8)(b).

(a) Requesting a Waiver.

(i) A taxpayer may request an initial waiver for one year, and then request a renewal of the waiver for one subsequent year, by submitting to the Department form DR 0620, Request for Hardship Waiver from Electronic Filing and EFT Payment Requirements; (ii) A taxpayer who is granted a waiver for two years is not eligible for another waiver, even if electronic filing of returns or electronic payment is subsequently required for an additional tax or fee pursuant to section 39-21-119.5, C.R.S., or any Department rule. 41 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (b) Waiver Period. A waiver applies for one year from the date the waiver is granted. A renewal of a hardship waiver applies for one year from the date the renewal is granted or effective, whichever is later. (c) Effect of a Waiver. A waiver applies to all returns or payments that the taxpayer files or makes during the waiver period. During the waiver period: (i) The taxpayer must still file returns or make payments to the Department as otherwise required, but may do so by a means other than electronically; and (ii) The taxpayer is not subject to the penalty set forth in paragraph (7) of this rule, but may be subject to other types of penalties and interest.

42 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Rule 39-21-119.5–5. Mandatory Electronic Filing and Payment of the Public Utilities Administration Fee.

Basis and Purpose. The statutory bases for this rule are sections 39-21-112, 39-21- 119.5, 40-2-111, and 40-2-113, C.R.S. The purpose of this rule is to require electronic filing of the annual report of public utility intrastate gross operating revenue required to be filed pursuant to section 40-2-111, C.R.S., and require electronic payment of the public utilities administration fee required to be remitted pursuant to section 40-2-113, C.R.S.

(1) General Rule. All public utilities shall electronically file the annual report of public utility intrastate gross operating revenue and electronically remit the public utilities administration fee in accordance with 1 CCR 201-1, Rule 39-21-119.5–1 and this rule.

(2) Definition. As used in this rule, unless context otherwise requires, “public utility” means any public utility required to pay the public utilities administration fee pursuant to article 2 of title 40, C.R.S.

(3) Mandatory Electronic Filing and Payment.

(a) Unless the Department has granted a public utility a waiver pursuant to section 39-21-119.5(6), C.R.S., and 1 CCR 201-1, Rule 39-21-119.5–1, a public utility required to file the annual report of public utility intrastate gross operating revenue pursuant to section 40-2-111, C.R.S., and pay the public utilities administration fee pursuant to section 40-2-113, C.R.S., shall file such return and remit such fee electronically as set forth in this rule.

(i) A public utility shall electronically file any return that reports public utility intrastate gross operating revenue earned on or after January 1, 2026, and electronically remit the corresponding fee due if the public utility’s gross operating revenue in the prior calendar year from intrastate utility business in Colorado was $500,000 or more. (ii) A public utility shall electronically file any return that reports public utility intrastate gross operating revenue earned on or after January 1, 2027, and electronically remit the corresponding fee due if the public utility’s gross operating revenue in the prior calendar year from intrastate utility business in Colorado was $25,000 or more. (iii) All public utilities shall electronically file any return that reports public utility intrastate gross operating revenue earned on or after January 1, 2028, and electronically remit the corresponding fee due.

43 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division (b) A public utility that meets a threshold to require electronic filing of the annual report of public utility intrastate gross operating revenue and remittance of the public utilities administration fee pursuant to paragraph (3)(a) of this rule is required to file all future returns and remit all future fees electronically even if the public utilities’ annual gross operating revenue from intrastate utility business in Colorado falls below the threshold in a subsequent calendar year.

Rule 39-21-120. Signature and Filing Alternatives.

Basis and Purpose. The statutory bases for this rule are §§ 39-21-112(1), 39-21-119, 39-21-120, 39-27-117, and 24-71.3-102 et seq., C.R.S. The purpose of this rule is to define and implement acceptable alternatives to file and sign tax returns and other documents.

(1) Electronic Filing Alternatives. A taxpayer or his or her duly authorized representative may electronically file any return or other document for which the Department offers an electronic filing option. Any return or document filed electronically will be considered the official tax return or other document for the taxpayer or entity submitting such return or document.

(2) Electronic Signature Alternatives. A taxpayer may electronically sign any return or other document for which the Department offers an electronic signature option. The electronic signature must be compatible with the electronic filing systems and forms in use by the Department. Any electronic signature shall be treated for all purposes, including penalties for perjury, in the same manner as if verified by handwritten signature.

Cross Reference 1. § 24-71.3-102 et seq., C.R.S.

Special Rule 1. [Repealed eff. 03/02/2023] 44 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Editor’s Notes History Regulation 39-21-108 eff. 04/30/2007.

Regulation 39-21-108 eff. 11/30/2007.

Regulation 24-35-103.5 eff. 06/30/2008.

Regulation 39-21-113 eff. 01/01/2009.

Regulation 24-35-103.5 eff. 04/30/2009.

Regulation 39-21-112.3.5 emer. rule eff. 03/01/2010.

Regulation 39-21-116.5 emer. rule eff. 03/01/2010; expired 06/01/2010. Regulation 39-21-112.3.5 emer. rule eff. 06/01/2010.

Regulation 39-21-112.3.5 emer. rule eff. 06/18/2010.

Regulation 39-21-112.3.5 eff. 07/30/2010.

Regulations 3-21-110, Special Regulation 1 eff. 03/02/2011. Regulation 39-21-112(1) emer. rule eff. 10/17/2013; expired 02/14/2014. Regulation 39-21-112(1) emer. rule eff. 04/22/2014.

Regulation 39-21-112(1) eff. 05/30/2014.

Regulation 39-21-103(1) eff. 03/02/2015.

Rule 39-21-112(3.5) emer. rule eff. 06/30/2017.

Rule 39-21-112(3.5) emer. rule eff. 10/23/2017.

Rule 39-21-112(3.5) eff. 01/01/2018.

Rule 39-21-119, Special Rule 1 eff. 08/14/2018.

Regulation 39-21-120 eff. 11/14/2018.

Regulation 39-21-119 eff. 03/30/2019.

Rules 39-21-103-1, 39-21-103-2, 39-21-105.5, 39-21-108, 39-21-109, 39-21-116.5 eff. 03/30/2021. Regulations 39-21-104, 39-21-105, 39-21-107, 39-21-113 repealed eff. 03/30/2021.

Rules 39-21-119, 39-21-119.5 eff. 03/02/2023. Special Rule 1 repealed eff. 03/02/2023. Rule 39-21-116.5 eff. 04/14/2023.

Rule 39-21-102 repealed eff. 08/30/2023.

Rules 39-21-105.5-1, 39-21-105.5-2 eff. 07/30/2024.

Rule 39-21-119.5-5 eff. 04/14/2026.

45 CODE OF COLORADO REGULATIONS 1 CCR 201-1 Taxation Division Annotations Rules 39-21-112(3.5) (3), 39-21-112(3.5) (4)(g)(ii)(C), 39-21-112(3.5) (5)(b), 39-21- 112(3.5) (5)(c)(ii)(D), 39-21-112(3.5) (5)(c)(ii)(E), 39-21-112(3.5) (6)(f)(ii)(D), 39-21- 112(3.5) (6)(f)(ii)(E) (adopted 10/23/2017) were not extended by House Bill 18-1253 and therefore expired 05/15/2018.

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