Court Opinion

ID: 9610092
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:36:34.897697+00
Date Added: 2024-06-11T12:26:42.623349
License: Public Domain

Justice ERICKSON
dissenting:
I would affirm the court of appeals. Investment Hotel Properties, Ltd. v. City of Colorado Springs, 781 P.2d 113 (Colo.App.1989). The court of appeals, in my view, properly concluded that Investment Properties’ purchase of tangible personal property for the exclusive purpose of furnishing private guest rooms in a hotel owned and operated by Investment Properties was not taxable under the Colorado Springs Sales and Use Tax Ordinance. City Code § 7-2-101 to -1302. The issue in this case is whether property purchased at wholesale and used to furnish hotel guest rooms is exempt from use tax under the purchase for taxable resale exception.
I
The Colorado Springs city code declares that
every person who stores, uses, distributes or consumes in the City any article of tangible personal property, or taxable services purchased, leased or rented at retail, as herein defined, is exercising a taxable privilege.
City Code § 7-2-102(A) (emphasis added). The city may therefore levy a use tax on “the privilege of using, storing, distributing or otherwise consuming tangible personal property and taxable services in the City....” City Code § 7-2-103(B).
The authority to impose a use tax is dependent on the threshold question whether the item of personal property is purchased at retail. If the item of personal property is not purchased at retail, then Colorado Springs does not have the authority to impose a use tax regardless of the extent of use, storage, or distribution of that property.
The city defines “retail sale” or “purchased at retail” as: “Any sale, purchase, lease, rental or grant of license to use tangible personal property, or taxable services within the City except a wholesale sale or purchase for taxable resale.” City Code § 7-2-104 (emphasis added). The code then defines wholesale sale as:
A sale by wholesalers or retailers to retail merchants, jobbers, dealers, vendors or other wholesalers for taxable resale. It does not include a sale by a wholesaler or retailer to users, consumers, purchasers or customers not for taxable resale, which sales shall be deemed retail sales and subject to the provisions of this Article.
City Code § 7-2-104 (emphasis added).
Under the code, if an item of tangible personal property is purchased for the purpose of taxable resale, then it is a wholesale purchase and not subject to the use tax. Although the code does not specifically articulate a definition of taxable resale, the provisions of the code provide ample guidance regarding the legislative intent of the city.
A “sale” is defined by City Code § 7-2-104 to include all sales, leases and, rentals of personal property. A resale would therefore occur when the purchaser of the property sells, leases, or rents that property to another party or individual. City Code § 7-2-310 provides that the furnishing of tangible personal property is a taxable event,1 and City Code § 7-2-311 provides that the furnishing of rooms in a hotel is also a taxable event.2 The rental of a room and accompanying personal property is thus a taxable resale. Because Investment Properties purchased the personal property for taxable resale, Colorado Springs does not have authority under the *381code to impose a use tax upon that property.
II
The imposition of a use tax on the purchase of hotel room furnishings in addition to the imposition of a sales tax when a furnished room is rented is inapposite to both the code, and Colorado case law.
City Code § 7-2-103(C)(2) provides:
The sales tax and use tax complement each other in the City revenue plan, and together provide a uniform tax of two and one-half percent upon either the sale, purchase, use, storage, distribution or consumption of all tangible personal property and specific taxable services purchased, leased or rented at retail, as herein defined.
(Emphasis added.) The purpose of a use tax is to supplement the sales tax, and therefore should not apply to property subject to sales tax. State Dep’t of Rev. v. Adolph Coors Co., 724 P.2d 1341, 1344 (Colo.1986). The imposition of a use tax on personal property purchased to furnish a private guest room, in addition to a sales tax on the rental of that room is, therefore, improper as double taxation. See IBM v. Charnes, 198 Colo. 374, 376, 601 P.2d 622, 625 (1979) (exemption of intermediate sales from use tax is designed to avoid multiple taxation, the goal being to impose the sales or use tax on the final consumptive transaction).
III
The majority applies the primary purpose test and accompanying factors that were articulated in Regional Transportation District v. Martin Marietta Corp., 805 P.2d 1102 (Colo.1991), and A.B. Hirschfeld Press, Inc. v. City and County of Denver, 806 P.2d 917 (Colo.1991). This court need not apply the four-factor analysis since the primary purpose of Investment Properties’ purchase is clear.
According to the majority, a purchase is a purchase for resale, and not a taxable purchase at retail, if the primary purpose of the transaction is the acquisition of tangible personal property for resale in an unaltered and basically unused condition. Investment Properties purchased the personal property at issue for no other reason than to furnish private guest rooms, which it intended to rent (resell) to its patrons. The personal property was then rented to Investment Properties’ patrons in an unaltered and unused condition.
Thus, even applying the primary purpose test, I would hold that the personal property purchased by Investment Properties for the purpose of furnishing private guest rooms should not be subject to a use tax by the City of Colorado Springs.

. The sales or use tax is imposed on the purchase price paid or charged or for any consideration for the furnishing of tangible personal property, together with the services of an operator thereof, for any person, shall be taxable hereunder as a rental of such personal property, irrespective of the fact that during all times that the said property is so furnished, the control of the operation of the same remains in the person so providing the said property.
City Code § 7-2-310.

. The sales or use tax is imposed on the entire price paid or charged on the transaction of furnishing rooms or other accommodations to *381any person who for a consideration uses, possesses or has the right to use or possess, any room or rooms in any hotel, apartment hotel, guest house, guest ranch, motel, mobile home, auto camp, trailer court or park, under any concession, permit right or access, license to use or other agreement, or otherwise.
City Code § 7-2-311.