CO Code § 39-26-205 (2021)
2021 Colorado Code|Title 39 - Taxation|Article 26 - Sales and Use Tax|Part 2 - Use Tax|§ 39-26-205. Tax Constitutes Lien - Exemption From Lien

  The tax imposed by section 39-26-202 shall be a first and prior lien on the tangible personal property stored, used, or consumed, subject only to any valid mortgage or other liens of record on and prior to the recording of notice as required by section 39-26-118 (3), and, when such tax is collected by retailers or agents, shall be a first and prior lien on all the stock of goods or business fixtures of or used by such retailer, excepting goods sold in the ordinary course of business, which lien shall have precedence over all other liens of whatsoever kind or nature, except as to preexisting claims or liens of a bona fide mortgagee, pledgee, judgment creditor, or purchaser whose rights have attached prior to the filing of the notice on property of the taxpayer, other than the goods, stock in trade, and business fixtures of such taxpayer.    Upon default of payment thereof, the executive director of the department of revenue, after demand upon the person owing such tax, may bring an action in his name as executive director in attachment and seize property as authorized by this section to secure the payment of said tax, interest, and penalties. In any such proceeding, no bond shall be required of the executive director, nor shall any sheriff require from the executive director an indemnifying bond for executing the writ of attachment or levy, and no sheriff shall be liable in damages when acting in accordance with such writs. The remedies provided in this section shall be in addition to all other remedies.    Any taxpayer or person in possession shall provide a copy of any lease pertaining to the assets and property described in subsection (1) of this section to the department of revenue within ten days after seizure by the department of such assets and property. The department shall verify that such lease is bona fide and notify the owner that such lease has been received by the department. The department shall use its best efforts to notify the owner of the real or personal property which might be subject to the lien created in subsection (1) of this section. The real or personal property of an owner who has made a bona fide lease to any taxpayer described in subsection (1) of this section shall be exempt from the lien created therein if such property can reasonably be identified from the lease description or if the lessee is given an option to purchase in such lease and has not exercised such option to become the owner of the property leased. This exemption shall be effective from the date of the execution of the lease. Such exemption shall also apply if the lease is recorded with the county clerk and recorder of the county where the property is located or based or a memorandum of the lease is filed with the department of revenue on such forms as may be prescribed by said department after the execution of the lease at a cost for such filing of two dollars and fifty cents per document. Motor vehicles which are properly registered in this state, showing the lessor as owner thereof, shall be exempt from the lien created in subsection (1) of this section; except that said lien shall apply to the extent that the lessee has an earned reserve, allowance for depreciation not to exceed fair market value, or similar interest which is or may be credited to the lessee. Where the lessor and lessee are blood relatives or relatives by law or have twenty-five percent or more common ownership, a lease between such lessee and such lessor shall not be considered as bona fide for purposes of this section. (3.5) Any coin-operated vending machine or video or other game machine shall be exempt from the lien created in subsection (1) of this section if:   The machine is placed on the retailer's premises under the terms of a lease or other agreement under which the retailer is given no right to become the owner of the machine;    The machine is plainly marked in a location accessible to agents of the department of revenue with information sufficient to permit identification of the owner of said property; and    The owner of the machine has filed with the department of revenue a schedule listing the machine by serial number and including thereon the owner's full name and the address of his business and such other information as the executive director of the department of revenue may require. To protect the anonymity of owners of property, the executive director of the department of revenue may permit the marking of property covered by this subsection (3.5) to be marked using numbers or other coded identification.       Any retailer who is in possession of property under the terms of a lease, which property is exempt from the lien as provided in this section, may be required by the executive director to remit tax funds due at more frequent intervals than monthly, but no more frequently than semimonthly, or may be required to furnish security for the proper payment of taxes whenever the collection of taxes appears to be in jeopardy.     History. Source: L. 37: P. 1100, § 1. CSA: C. 144, § 37. L. 39: P. 508, § 5. CRS 53: § 138-6-36. C.R.S. 1963: § 138-5-36. L. 64: P. 327, § 316. L. 69: P. 1138, § 4. L. 77: (3) amended, p. 1803, § 3, effective June 19. L. 89: (3.5) added, p. 1510, § 3, effective April 6. L. 92: (3) amended, p. 2202, § 5, effective April 16. History. Source: L. 37: P. 1100, § 1. CSA: C. 144, § 37. L. 39: P. 508, § 5. CRS 53: § 138-6-36. C.R.S. 1963: § 138-5-36. L. 64: P. 327, § 316. L. 69: P. 1138, § 4. L. 77: (3) amended, p. 1803, § 3, effective June 19. L. 89: (3.5) added, p. 1510, § 3, effective April 6. L. 92: (3) amended, p. 2202, § 5, effective April 16.    ANNOTATION   Law reviews. For article, “An Introduction to Tax Liens”, see 13 Colo. Law. 399 (1984).   Federal lien possesses priority over inchoate state tax lien. Federal liens take priority over all competing liens except those which are both earlier in time and choate. State taxes, until due, are uncertain in amount, hence lacking in choateness. Dir. of Rev. v. United States, 392 F.2d 307 (10th Cir. 1968).   Lien survives incorporation of sole proprietorship. The department's lien on tangible personal property on which use taxes are due and unpaid may survive the incorporation of a sole proprietorship. Dye Constr. Co. v. Dolan, 41 Colo. App. 293, 589 P.2d 497 (1978).