In the case where there is no business location, no local tax should be collected even if the property is delivered within the boundaries of a local taxing entity. The lease period is more than three years, or full payment of the purchase price occurs before the period ends. The lease must qualify for the investment tax credit, and that right must be passed to the lessee. When sales taxes are collected on the lease payments, all payments required to be paid by the lessee pursuant to the lease contact are sales taxable. These payments would include such things as warranties and property taxes, regardless of who receives the payments.
All amounts paid to any party to obtain uninterrupted use of leased property are lease payments.
All taxes collected on the lease are based on the lessee s location for vehicles, or place of use for non-vehicles, when the lease was entered into and remain in effect until the lease ends. If the lessee moves out of state, all Colorado taxes still apply. However, if the state into which the lessee moves requires, by its statutes, that its taxes be collected, then Colorado taxes are not required to be collected. If the lessor has a business location in Colorado and is required to collect sales taxes on lease payments, the lessor must obtain a sales tax license. Lessors of motor vehicles must always obtain a sales tax license.