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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0230.01 MKH SENATE BILL 98­064

STATE OF COLORADO

BY SENATOR Arnold;

also REPRESENTATIVE Reeser.

TRANSPORTATION

A BILL FOR AN ACT

CONCERNING A SALES AND USE TAX REFUND FOR AUTOMOBILE PURCHASERS WHO SELL ANOTHER AUTOMOBILE WITHIN A CERTAIN AMOUNT OF TIME WITHIN THE DATE OF PURCHASE.

Bill Summary

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

Allows the retail purchaser of an automobile (first automobile) who sells another automobile (second automobile) within 30 days of purchasing the first automobile to obtain a refund from the department of revenue in an amount equal to the difference between the sales or use tax imposed on the actual purchase price of the first automobile and the sales or use tax that would have been imposed on the purchase price of said automobile if the purchaser had exchanged the second automobile at fair market value as part of the retail sales transaction. Excludes from eligibility for this refund those persons who engage in the business of selling automobiles or who engage in a retail transaction in which an automobile is exchanged in purchasing another automobile. Applies to persons who purchase an automobile on or after July 1, 1998.

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

SECTION 1.  39­26­114, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

39­26­114.  Exemptions ­ disputes ­ credits or refunds. (19) (a) (I)  EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPHS (III) AND (V) OF THIS PARAGRAPH (a), A REFUND SHALL BE MADE TO ANY PERSON WHO PURCHASES AN AUTOMOBILE AT RETAIL ON OR AFTER JULY 1, 1998, IN AN AMOUNT SPECIFIED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (a). FOR PURPOSES OF THIS SUBSECTION (19), "AUTOMOBILE" SHALL HAVE THE SAME MEANING SET FORTH IN SECTION 42­1­102 (8), C.R.S.

(II)  THE AMOUNT OF THE REFUND ALLOWED UNDER THIS SUBSECTION (19) SHALL BE AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE SALES TAX IMPOSED ON THE ACTUAL PURCHASE PRICE OF THE AUTOMOBILE PURSUANT TO SECTION 39­26­106 AND THE SALES TAX THAT WOULD HAVE BEEN IMPOSED ON THE PURCHASE PRICE OF THE AUTOMOBILE PURSUANT TO SAID SECTION IF, AS PART OF THE RETAIL SALES TRANSACTION, THE PURCHASER HAD EXCHANGED UP TO THREE SEPARATE AUTOMOBILES AT FAIR MARKET VALUE RATHER THAN SELL EACH AUTOMOBILE IN ACCORDANCE WITH THE PROVISIONS OF SUBPARAGRAPH (III) OF THIS PARAGRAPH (a).

(III) IN ORDER FOR A PERSON TO BE ELIGIBLE FOR THE REFUND PROVIDED IN THIS PARAGRAPH (a), HE OR SHE MUST:

(A)  SELL EACH SEPARATE AUTOMOBILE REFERRED TO IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (a) WITHIN THIRTY DAYS BEFORE OR AFTER THE RETAIL TRANSACTION REFERRED TO IN SAID SUBPARAGRAPH (II); AND

(B)  PURCHASE AND SELL THE AUTOMOBILES REFERRED TO IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (a) IN THE STATE OF COLORADO.

(IV)  A REFUND BASED ON THE FAIR MARKET VALUE OF A SEPARATE VEHICLE REFERRED TO IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (a) SHALL ONLY BE CLAIMED FOR THE RETAIL PURCHASE OF ONE AUTOMOBILE.

(V)  THE AMOUNT OF THE REFUND PROVIDED UNDER THIS PARAGRAPH (a) SHALL NOT EXCEED THE AMOUNT OF SALES TAX IMPOSED ON THE ACTUAL PURCHASE PRICE OF THE AUTOMOBILE PURCHASED AT RETAIL.

(VI)  THE REFUND SET FORTH IN THIS SUBSECTION (19) SHALL NOT BE ALLOWED TO PERSONS ENGAGED IN THE BUSINESS OF SELLING AUTOMOBILES AND SHALL NOT APPLY TO TRANSACTIONS SPECIFIED IN SECTION 39­26­104 (1) (b) (I) (B).

(b)  APPLICATIONS FOR A REFUND MUST BE MADE WITHIN SIXTY DAYS AFTER THE PURCHASE OF THE AUTOMOBILE REFERRED TO IN PARAGRAPH (a) OF THIS SUBSECTION (19) ON SUCH FORMS AS SHALL BE PRESCRIBED AND FURNISHED BY THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE. THE EXECUTIVE DIRECTOR MAY REQUIRE THE PURCHASER TO FURNISH THE FOLLOWING PROOF BEFORE SUCH REFUND IS MADE:

(I)  THE AMOUNT OF SALES TAX IMPOSED ON THE AUTOMOBILE PURCHASED AT RETAIL;

(II)  THE DATE THE SEPARATE VEHICLE WAS SOLD;

(III)  THE FAIR MARKET VALUE OF THE SEPARATE VEHICLE SOLD;

(IV)  THE LOCATION OF THE RETAIL AUTOMOBILE DEALERSHIP FROM WHICH THE PERSON PURCHASED THE AUTOMOBILE AND THE LOCATION AT WHICH THE PERSON SOLD THE SEPARATE VEHICLE.

SECTION 2.  Part 2 of article 26 of title 39, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

39­26­203.5.  Refund for automobile purchases when a separate automobile is sold. (1)  EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (5) OF THIS SECTION, A REFUND SHALL BE MADE TO ANY PERSON WHO PURCHASES AN AUTOMOBILE AT RETAIL ON OR AFTER JULY 1, 1998, IN AN AMOUNT SPECIFIED IN SUBSECTION (2) OF THIS SECTION. FOR PURPOSES OF THIS SECTION, "AUTOMOBILE" SHALL HAVE THE SAME MEANING SET FORTH IN SECTION 42­1­102 (8), C.R.S.

(2)  THE AMOUNT OF THE REFUND ALLOWED UNDER THIS SECTION SHALL BE AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE USE TAX IMPOSED ON THE ACTUAL PURCHASE PRICE OF THE AUTOMOBILE PURSUANT TO SECTION 39­26­202 AND THE USE TAX THAT WOULD HAVE BEEN IMPOSED ON THE PURCHASE PRICE OF THE AUTOMOBILE PURSUANT TO SAID SECTION IF, AS PART OF THE RETAIL SALES TRANSACTION, THE PURCHASER HAD EXCHANGED UP TO THREE SEPARATE AUTOMOBILES AT FAIR MARKET VALUE RATHER THAN SELL EACH AUTOMOBILE IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION (3) OF THIS SECTION.

(3)  IN ORDER FOR A PERSON TO BE ELIGIBLE FOR THE REFUND PROVIDED IN THIS SECTION, HE OR SHE MUST:

(a)  SELL EACH SEPARATE AUTOMOBILE REFERRED TO IN SUBSECTION (2) OF THIS SECTION WITHIN THIRTY DAYS BEFORE OR AFTER THE RETAIL TRANSACTION REFERRED TO IN SAID SUBSECTION (2); AND

(b)  PURCHASE AND SELL THE AUTOMOBILES REFERRED TO IN SUBSECTION (2) OF THIS SECTION IN THE STATE OF COLORADO.

(4)  A REFUND BASED ON THE FAIR MARKET VALUE OF A SEPARATE VEHICLE REFERRED TO IN SUBSECTION (2) OF THIS SECTION SHALL ONLY BE CLAIMED FOR THE RETAIL PURCHASE OF ONE AUTOMOBILE.

(5)  THE AMOUNT OF THE REFUND PROVIDED UNDER THIS SECTION SHALL NOT EXCEED THE AMOUNT OF USE TAX IMPOSED ON THE ACTUAL PURCHASE PRICE OF THE AUTOMOBILE PURCHASED AT RETAIL.

(6)  THE REFUND SET FORTH IN THIS SECTION SHALL NOT BE ALLOWED TO PERSONS ENGAGED IN THE BUSINESS OF SELLING AUTOMOBILES AND SHALL NOT BE APPLIED TO TRANSACTIONS SPECIFIED IN SECTION 39­26­104 (1) (b) (I) (B).

(7)  APPLICATIONS FOR A REFUND MUST BE MADE WITHIN SIXTY DAYS AFTER THE PURCHASE OF THE AUTOMOBILE REFERRED TO IN SUBSECTION (2) OF THIS SECTION ON SUCH FORMS AS SHALL BE PRESCRIBED AND FURNISHED BY THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE. THE EXECUTIVE DIRECTOR MAY REQUIRE THE PURCHASER TO FURNISH THE FOLLOWING PROOF BEFORE SUCH REFUND IS MADE:

(a)  THE AMOUNT OF USE TAX IMPOSED ON THE AUTOMOBILE PURCHASED AT RETAIL;

(b)  THE DATE THE SEPARATE VEHICLE WAS SOLD;

(c)  THE FAIR MARKET VALUE OF THE SEPARATE VEHICLE SOLD;

(d)  THE LOCATION OF THE RETAIL CAR DEALERSHIP FROM WHICH THE PERSON PURCHASED THE AUTOMOBILE AND THE LOCATION AT WHICH THE PERSON SOLD THE SEPARATE VEHICLE.

SECTION 3.  Effective date ­ applicability.  This act shall take effect July 1, 1998, and shall apply to retail automobile purchases made on or after said date.

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.