First Regular Session

Sixty-first General Assembly

LLS NO. 97­0078.01 MKD SENATE BILL 97­076

STATE OF COLORADO

BY SENATOR Schroeder;

also REPRESENTATIVE Sullivant.

REENGROSSED

FINANCE

A BILL FOR AN ACT

CONCERNING THE REINSTATEMENT OF THE SALES AND USE TAX EXEMPTION FOR BULK SALES OF COINS AND PRECIOUS METAL BULLION.

Bill Summary

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

Reinstates the sales and use tax exemption for coins and precious metal bullion sold on and after January 1, 1999. Refers the question of whether such sales and use tax exemption shall be reinstated to the electors of Colorado at the next general election.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  39­26­102 (2.6) and (6.5), Colorado Revised Statutes, 1994 Repl. Vol., are RECREATED AND REENACTED, WITH AMENDMENTS, to read:

39­26­102.  Definitions. As used in this article, unless the context otherwise requires:

(2.6)  "COINS" MEANS MONETIZED BULLION OR OTHER FORMS OF MONEY MANUFACTURED FROM GOLD, SILVER, PLATINUM, PALLADIUM, OR OTHER SUCH METALS NOW, IN THE FUTURE, OR HERETOFORE DESIGNATED AS A MEDIUM OF EXCHANGE UNDER THE LAWS OF THIS STATE, THE UNITED STATES, OR ANY FOREIGN NATION.

(6.5)  "PRECIOUS METAL BULLION" MEANS ANY PRECIOUS METAL, INCLUDING, BUT NOT LIMITED TO, GOLD, SILVER, PLATINUM, AND PALLADIUM, THAT HAS BEEN PUT THROUGH A PROCESS OF REFINING AND IS IN SUCH A STATE OR CONDITION THAT ITS VALUE DEPENDS UPON ITS PRECIOUS METAL CONTENT AND NOT ITS FORM.

SECTION 2.  39­26­114 (17), Colorado Revised Statutes, 1994 Repl. Vol., is RECREATED AND REENACTED, WITH AMENDMENTS, to read:

39­26­114.  Exemptions ­ disputes ­ credits or refunds. (17) (a)  ALL SALES OF PRECIOUS METAL BULLION AND COINS, AS DEFINED IN SECTION 39­26­102 (2.6), THAT ARE SUBSTANTIALLY EQUIVALENT TO TRANSACTIONS IN SECURITIES OR COMMODITIES THROUGH A NATIONAL SECURITIES OR COMMODITIES EXCHANGE SHALL BE EXEMPT FROM TAXATION UNDER THIS PART 1.

(b)  FOR PURPOSES OF THIS SUBSECTION (17), A SALE OF PRECIOUS METAL BULLION AND COINS SHALL BE DEEMED TO BE SUBSTANTIALLY EQUIVALENT TO A TRANSACTION IN SECURITIES OR COMMODITIES THROUGH A NATIONAL SECURITIES OR COMMODITIES EXCHANGE IF THE SALE IS BY OR THROUGH ANY PERSON WHO IS REGISTERED PURSUANT TO THE FEDERAL "COMMODITY EXCHANGE ACT", 7 U.S.C. SEC. 1 ET SEQ., AS AMENDED, OR WHO IS NOT REQUIRED TO BE REGISTERED PURSUANT TO SAID FEDERAL ACT.

SECTION 3.  39­26­203 (1) (bb), Colorado Revised Statutes, 1994 Repl. Vol., is RECREATED AND REENACTED, WITH AMENDMENTS, to read:

39­26­203.  Exemptions. (1)  This part 2 is declared to be supplementary to the "Emergency Retail Sales Tax Law of 1935", part 1 of this article, and shall not apply:

(bb) (I)  TO THE STORAGE, USE, OR CONSUMPTION OF PRECIOUS METAL BULLION AND COINS, AS DEFINED IN SECTION 39­26­102 (2.6), THAT ARE SOLD IN TRANSACTIONS SUBSTANTIALLY EQUIVALENT TO TRANSACTIONS IN SECURITIES OR COMMODITIES THROUGH A NATIONAL SECURITIES OR COMMODITIES EXCHANGE.

(II)  FOR PURPOSES OF THIS PARAGRAPH (bb), A SALE OF PRECIOUS METAL BULLION AND COINS SHALL BE DEEMED TO BE SUBSTANTIALLY EQUIVALENT TO A TRANSACTION IN SECURITIES OR COMMODITIES THROUGH A NATIONAL SECURITIES OR COMMODITIES EXCHANGE IF THE SALE IS BY OR THROUGH ANY PERSON WHO IS REGISTERED PURSUANT TO THE FEDERAL "COMMODITY EXCHANGE ACT", 7 U.S.C. SEC. 1 ET SEQ., AS AMENDED, OR WHO IS NOT REQUIRED TO BE REGISTERED PURSUANT TO SAID FEDERAL ACT.

SECTION 4.  Applicability. This act shall apply to sales of coins and precious metal bullion made on or after July 1, 1997.

SECTION 5.  Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.