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Colorado cleanroom sales tax exemption suspended, July 2016

 Clean enough for an exemption?

The fate of one of Colorado’s sales tax exemptions depends each year on the health of the state’s General Fund. When there is sufficient revenue to allow General Fund appropriations to increase by at least 6 percent, the exemption stands. Where the 6 percent threshold is not met, the exemption is suspended.

The June 2016 Economic and Revenue Forecast states the appropriations will not increase by at least 6 percent in Fiscal Year 2015-16 or FY 2016-17. “As a result, the sales tax refund for cleanrooms will no longer be available beginning in July 2016.”

The cleanroom machinery sales and use tax exemption applies when the cleanroom is used to produce tangible personal property such as computer components, microprocessors, blank and written software media, biotechnological products, nanotechnological product, photonic products, and pharmaceuticals. “Cleanroom” is defined as “an environment with a level of environmental pollutants such as dust, airborne microbes, aerosol particles, and chemical vapors equal to or less than the maximum number of particles per cubic meter.” Additional qualifications apply (Colorado Department of Revenue FYI Sales 73).

Also suspended is the historic property preservation tax credit for tax year 2016. It will likely not be available for tax year 2017, either, but that has yet to be determined.

Tax automation software enables businesses to seamlessly integrate changes such as these into existing systems, facilitating sales and use tax compliance. Learn more.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.