Colorado Sales Tax Exemption on Purchases of Machinery and Machine Tools

Sales Tax Exemption on Purchases of Machinery and Machine Tools
Form DR 1191
*DO=NOT=SEND*

DR 1191 (10/26/17)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0009
Colorado.gov/Tax

DR 1191 Instructions
General Information
Purchases of machinery or machine tools and parts
thereof are exempt from state sales and use tax
when the machinery will be used in manufacturing.
39-26-709(1)(g), C.R.S.
To qualify the machinery must be:
	 Used in Colorado,
	Used directly and predominantly to manufacture
tangible personal property for sale or profit.
	 Of a nature that would have qualified for the federal
investment tax credit under the definition of section
38 property found in the Internal Revenue Code of
1954, as amended. This includes tangible personal
property with a useful life of one year or more and limits
qualifying purchases of used equipment to a maximum
of $150,000 annually,
	 Included on a purchase order or invoice totaling more
than $500,
	 Capitalized.
Enterprise Zones
The manufacturing exemption is expanded to exempt additional
purchases from sales and use tax when machinery is used
solely and exclusively in an enterprise zone. Equipment that is
used both within and outside an enterprise zone only qualifies
for the regular statewide exemption, as is equipment used at a
location prior to that location’s designation as an enterprise zone.
[C.R.S. 39-30-106(1)]
	 Machinery used solely and exclusively in a designated
enterprise zone may be capitalized or expensed to
qualify for the exemption.
	 Materials for construction or repair of machinery or
machine tools are exempt from the state sales and
use tax if the machinery is used exclusively in an
enterprise zone.
	Mining operations are included in the definition of
manufacturing when performed in an enterprise zone.
For further information, see FYI Sales 69, “Enterprise
Zone Exemption for Machinery and Machine Tools Used
in Mining.”

Local Taxes
Cities, counties and special districts may or may not
exempt manufacturing equipment from local sales taxes.
Refer to publication DR 1002 for a list of localities that
exempt this equipment from local tax.
Claiming The Exemption
Complete the DR 1191, Sales Tax Exemption on Purchases of
Machinery and Machine Tools. Give one copy of the completed
form to the seller of the machinery and a second copy to the
Department of Revenue. The purchaser must also keep a copy.
An exemption cannot be claimed for sales tax paid in another
state which is credited against Colorado sales or use tax.
For further information regarding the manufacturing
exemption, see FYI Sales 10 available on our
Ta x a t i o n We b s i t e a t C o l o r a d o . g o v / Ta x , o r c a l l
(303) 238-SERV (7378).

DR 1191 (10/26/17)
COLORADO DEPARTMENT OF REVENUE
Denver CO 80261-0009
Colorado.gov/Tax

*141191==19999*

Sales Tax Exemption On Purchases
Of Machinery And Machine Tools
Seller

Colorado Sales Tax Account Number

Address

City

State

Purchaser

Zip

Colorado Sales Tax Account Number

Address

City

Date of Purchase (MM/DD/YY)

State
Amount of Purchase

Description of Item(s) Including Machine Parts

Is Equipment
	
Leased 	

Zip

Purchased

How Used in Manufacturing

How Sold
	
Wholesale

End Product

Retail

New

Used

This Section is for Businesses Located in Enterprise Zones
(See Instructions on Reverse Side)

Amount of Purchase for Machinery, Machine Tools and Parts
Materials used in the construction of machinery and machine tools (after 06/07/89)

I hereby certify that __________________________________________________________________ is
(Name of Purchasing Firm or Person)

entitled to the exemption on purchases of machinery or machine tools.
Name of Person Authorizing Purchase (please print)
By (Authorized Signature of Purchasing Firm)

Title