Tax Exempt Status
Individual attendees who will be paying for their guest room charges with a school-issued check will qualify for tax exempt status ONLY if a copy of the valid tax exempt certificate for their organization is presented AND the check provided for payment is written from funds for the same organization noted on the tax exempt certificate.
Here are a few excerpts about some of the more frequent issues:
Determining Exempt Purchases
1. The purchaser must present this number to vendors when making tax - exempt purchases. For each sale, vendors must record this number, date of sale, item(s) or service(s) purchased, and name of the organization. Keep this record for audit purposes.
2.
Not all purchases made by tax exempt organizations are nontaxable. [S39-26-704 C.R.S.] You may sell tangible personal property or taxable services tax free ONLY if BOTH of the following conditions are met:
A. If the purchases totals less than $100. (See form).
If the purchase totals $100 or more: Payment for the item or service must made with the organization's check or credit card, not via cash or an individual's check or credit card, and the organization will not be reimbursed by any person(s) for the use or consumption of the item or service.
B. The item or service is used by the organization in conducting regular religious, charitable, scientific, literary, or educational business.This many also include fundraising activities.
Sales to Out-of-State Tax-Exempt Organizations
Such organizations will not have Colorado tax exemption number, and may or may not have a tax exemption number from their home state. Determine whether the sale meets the eligibility criteria for a nontaxable sale, as explained above. If it does, have a representative sign a statement or affidavit such as the sample provided in this FYI (see form). You may photocopy the sample and keep copies on hand for use when approached by out-of-state groups claiming tax-exampt status.
This procedure places the burden of proof on the organization's representative and protects the vendor should the department discover that the organization falsely claimed tax-exempt status or that the item or service purchased did not meet either or both of the requirements for tax-exempt sales.
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