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First Regular Session

Sixty-first General Assembly

LLS NO. 97­0175.01 MKD SENATE BILL 97­065

STATE OF COLORADO

BY SENATOR Mutzebaugh

FINANCE

A BILL FOR AN ACT

CONCERNING A PROHIBITION AGAINST THE IMPOSITION OF SALES AND USE TAX ON SALES OF FOOD FOR DOMESTIC HOME CONSUMPTION.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Prohibits counties, municipalities, and any other local government from levying sales or use tax on food for domestic home consumption.


Be it enacted by the General Assembly of the State of Colorado: SECTION 1.  29­2­105 (1) (d), (6), (7), and (8), Colorado Revised Statutes, 1986 Repl. Vol., as amended, are amended, and the said 29­2­105 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:

29­2­105.  Contents of sales tax ordinances and proposals. (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)  A provision that the tangible personal property and services taxable pursuant to this article shall be the same as the tangible personal property and services taxable pursuant to section 39­26­104, C.R.S., and subject to the same exemptions as those specified in section 39­26­114, C.R.S., except the exemption allowed by section 39­26­114 (11), C.R.S., for purchases of machinery or machine tools, the exemption of sales and purchases of those items in section 39­26­114 (1) (a) (XXI), C.R.S., the exemption for sales of food specified in section 39­26­114 (1) (a) (XX), C.R.S., and the exemption for occasional sales by a charitable organization set forth in section 39­26­114 (18), C.R.S. Sales of food, as defined in section 39­26­102 (4.5), C.R.S., exempted from the state sales tax pursuant to section 39­26­114 (1) (a) (XX), C.R.S., Sales and purchases of those items exempted from the state sales tax pursuant to section 39­26­114 (1) (a) (XXI), C.R.S., purchases of machinery or machine tools as provided in section 39­26­114 (11), C.R.S., or occasional sales by a charitable organization as provided in section 39­26­114 (18), C.R.S., may be exempted from said town, city, or county sales tax only by the express inclusion of such exemption either at the time of adoption of the initial sales tax ordinance or resolution or by amendment thereto. Any such amendment shall be adopted in the same manner as the initial ordinance or resolution. In the absence of express provision for the exemption for sales of food, as defined in section 39­26­102 (4.5), C.R.S., or purchases of machinery or machine tools as provided in section 39­26­114 (11), C.R.S., or exemption of sales and purchases of those items in section 39­26­114 (1) (a) (XXI), C.R.S., or exemption of occasional sales by a charitable organization as provided in section 39­26­114 (18), C.R.S., all sales tax ordinances or resolutions, whether adopted prior to, on, or subsequent to July 1, 1979, which provide in substance that the tangible personal property and services taxed shall be the same as the tangible personal property and services taxable pursuant to section 39­26­104, C.R.S., or any predecessor statute, and subject to the same exemptions as those specified in section 39­26­114, C.R.S., or any predecessor statute, shall be construed as imposing or continuing to impose the town, city, or county sales tax on food, as defined in section 39­26­102 (4.5), C.R.S., purchases of machinery and machine tools as described in section 39­26­114 (11), C.R.S., sales or purchases of those items described in section 39­26­114 (1) (a) (XXI), C.R.S., and occasional sales by a charitable organization as described in section 39­26­114 (18), C.R.S. The regional transportation district may, in its discretion, continue to levy a sales tax on purchases of machinery or machine tools, as provided in section 39­26­114 (11), C.R.S.

(6)  No sales or use tax of any statutory or home rule city, town, city and county, or county shall apply to the sale of food purchased with food stamps. For the purposes of this subsection (6), "food" shall have the same meaning as provided in 7 U.S.C. section 2012 (g), as such section exists on October 1, 1987, or is thereafter amended.

(7)  No sales or use tax of any statutory or home rule city, town, city and county, or county shall apply to the sale of food purchased with funds provided by the special supplemental food program for women, infants, and children, 42 U.S.C. section 1786. For the purposes of this subsection (7), "food" shall have the same meaning as provided in 42 U.S.C. section 1786, as such section exists on October 1, 1987, or is thereafter amended.

(8)  Any statutory or home rule city, town, city and county, or county which provides an exemption for the sale of food shall define "food" as defined in section 39­26­102 (4.5), C.R.S.

(9) (a)  IT IS THE INTENT OF THE GENERAL ASSEMBLY THAT THE AFFORDABILITY OF FOOD FOR DOMESTIC HOME CONSUMPTION BE RECOGNIZED AS VITAL TO THE HEALTH AND WELFARE OF ALL PERSONS IN THE STATE AND, THEREFORE, REGARDED AS A MATTER OF STATEWIDE CONCERN. FURTHER, IT IS THE INTENT OF THE GENERAL ASSEMBLY THAT NO PERSON IN THE STATE INCUR SALES OR USE TAX LIABILITY FOR THE PURCHASE OF FOOD FOR DOMESTIC HOME CONSUMPTION. FOR THESE REASONS, THIS SUBSECTION (9) IS INTENDED TO PREEMPT ANY LOCAL GOVERNMENT CHARTER PROVISIONS, ORDINANCES, OR RESOLUTIONS TO THE CONTRARY.

(b)  NO SALES OR USE TAX OF ANY STATUTORY OR HOME RULE CITY, TOWN, CITY AND COUNTY, COUNTY, OR ANY OTHER LOCAL GOVERNMENT SHALL APPLY TO THE SALE OF FOOD PURCHASED FOR DOMESTIC HOME CONSUMPTION.

SECTION 2.  29­2­106 (4) (a), Colorado Revised Statutes, 1986 Repl. Vol., is amended to read:

29­2­106.  Collection ­ administration ­ enforcement. (4) (a)  The executive director of the department of revenue shall, at no charge, administer, collect, and distribute the sales tax of any home rule municipality, upon request of the governing body of such municipality, if the provisions of the sales tax ordinance of said municipality, other than those provisions relating to local procedures followed in adopting the ordinance and whether or not the ordinance applies the sales tax to the sale of food, as defined in section 39­26­102 (4.5), C.R.S., or purchases of machinery or machine tools as provided in section 39­26­114 (11), C.R.S., or sales or purchases of electricity, coal, wood, gas, fuel oil, or coke as provided in section 39­26­114 (1) (a) (XXI), C.R.S., correspond to the requirements of this article for sales taxes imposed by counties, towns, and cities and if no use tax is to be collected by the department except as provided in section 39­26­208, C.R.S. At the time of making such request, said governing body shall certify to the executive director of the department of revenue a true copy of said sales tax ordinance.

SECTION 3.  Effective date. This act shall take effect July 1, 1997.

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.