NOTE: The governor signed this measure on 6/8/2016.
      
      
      SENATE BILL 16-124
      
      
      BY SENATOR(S) Grantham, Aguilar, Cooke, Crowder, Donovan,
      Guzman, Heath, Hodge, Jahn, Jones, Kefalas, Kerr, Lundberg, Marble,
      Martinez Humenik, Merrifield, Newell, Scheffel, Scott, Sonnenberg,
      Steadman, Tate, Todd, Woods, Cadman;
      also REPRESENTATIVE(S) Priola and Becker K., Arndt, Esgar, Kagan,
      Kraft-Tharp, Lebsock, Lontine, Mitsch Bush, Moreno, Pabon, Roupe,
      Ryden, Winter, Hullinghorst.
      
      
      Concerning sales and use tax treatment of equipment used for
           processing recovered materials.
      
      
      Be it enacted by the General Assembly of the State of Colorado:
      
           SECTION 1.  In Colorado Revised Statutes, 39-26-709, amend (1)
      (a) (II) and (1) (c) (III); and add (1) (c) (III.5) as follows:
      
           39-26-709.  Machinery and machine tools - definitions.
      (1) (a)  The following shall be exempt from taxation under the provisions
      of part 1 of this article:
      
           (II)  Except as allowed in section 39-30-106, on or after July 1, 1996,
      purchases of machinery or machine tools, or parts thereof, in excess of five
      hundred dollars to be used in Colorado directly and predominantly in
      manufacturing tangible personal property, for sale or profit, including any
      machinery or machine tools purchased by a business listed in the
      inventory prepared by the department of public health and
      environment pursuant to section 30-20-122 (1) (a) (V), C.R.S.; and
      
           (c)  As used in this subsection (1):
      
           (III)  "Manufacturing" means the operation of producing a new
      product, article, substance, or commodity different from and having a
      distinctive name, character, or use from raw or prepared materials,
      including the processing of recovered materials.
      
           (III.5)  "Recovered materials" means those materials that
      have been separated, diverted, or removed from the waste stream
      for the purpose of remanufacturing, reuse, or recycling.
      
           SECTION 2.  In Colorado Revised Statutes, 29-2-105, amend (1)
      (d) (I) (A); and add (1) (d) (I) (A.5) as follows:
      
           29-2-105.  Contents of sales tax ordinances and proposals -
      repeal. (1)  The sales tax ordinance or proposal of any incorporated town,
      city, or county adopted pursuant to this article shall be imposed on the sale
      of tangible personal property at retail or the furnishing of services, as
      provided in paragraph (d) of this subsection (1). Any countywide or
      incorporated town or city sales tax ordinance or proposal shall include the
      following provisions:
      
           (d) (I)  A provision that the sale of tangible personal property and
      services taxable pursuant to this article shall be the same as the sale of
      tangible personal property and services taxable pursuant to section
      39-26-104, C.R.S., except as otherwise provided in this paragraph (d). The
      sale of tangible personal property and services taxable pursuant to this
      article shall be subject to the same sales tax exemptions as those specified
      in part 7 of article 26 of title 39, C.R.S.; except that the sale of the following
      may be exempted from a town, city, or county sales tax only by the express
      inclusion of the exemption either at the time of adoption of the initial sales
      tax ordinance or resolution or by amendment thereto:
      
           (A)  The exemption for sales of machinery or machine tools
      specified in section 39-26-709 (1), C.R.S., other than machinery or
      machine tools used in the processing of recovered materials by a
      business listed in the inventory prepared by the department of
      public health and environment pursuant to section 30-20-122 (1) (a)
      (V), C.R.S.;
      
           (A.5)  The exemption for sales of machinery or machine tools
      specified in section 39-26-709 (1), C.R.S., used in the processing of
      recovered materials by a business listed in the inventory prepared
      by the department of public health and environment pursuant to
      section 30-20-122 (1) (a) (V), C.R.S.;
      
           SECTION 3.  Applicability. This act applies to sales of machinery
      and machine tools occurring on or after July 1, 2016.
      
           SECTION 4.  Safety clause. The general assembly hereby finds,
      determines, and declares that this act is necessary for the immediate
      preservation of the public peace, health, and safety.
      
      
      
      
      ____________________________  ____________________________
      Bill L. Cadman                Dickey Lee Hullinghorst
      PRESIDENT OF                     SPEAKER OF THE HOUSE
      THE SENATE                         OF REPRESENTATIVES
      
      
      
      
      
      
      ____________________________  ____________________________
      Effie Ameen                            Marilyn Eddins
      SECRETARY OF                 CHIEF CLERK OF THE HOUSE
      THE SENATE                         OF REPRESENTATIVES
      
      
      
      
                  APPROVED________________________________________
      
      
      
      
      
                                    _________________________________________
                                    John W. Hickenlooper
                                    GOVERNOR OF THE STATE OF COLORADO