Form Dr 1191 - Sales Tax Exemption On Purchases Of Machinery And Machine Tools - 2013 Page 2
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2DR 1191 Instructions
General Information
Local Taxes
Purchases of machinery or machine tools and parts
Cities, counties and special districts may or may not
thereof are exempt from state sales and use tax when the
exempt manufacturing equipment from local sales taxes.
machinery will be used in manufacturing.
Refer to publication DR 1002 for a list of localities that
39-26-709(1)(g), C.R.S.
exempt this equipment from local tax.
To qualify the machinery must:
Claiming The Exemption
Be used in Colorado,
Complete form DR 1191 Sales Tax Exemption on
Be used directly and predominantly to manufacture
Purchases of Machinery and Machine Tools. Give one copy
tangible personal property for sale or profit.
of the completed form to the seller of the machinery and a
Be of a nature that would have qualified for the
second copy to the Department of Revenue. The purchaser
federal investment tax credit under the definition of
must also keep a copy. An exemption cannot be claimed
section 38 property found in the Internal Revenue
for sales tax paid in another state which is credited against
Code of 1954, as amended. This includes tangible
Colorado sales or use tax.
personal property with a useful life of one year
or more and limits qualifying purchases of used
Note: Acceptance of this certificate by the seller removes
equipment to a maximum of $150,000 annually,
any sales tax liability from the seller and the purchaser is
Be included on a purchase order or invoice totaling
liable for any subsequent sales or use tax liability for the
more than $500,
purchase.
Be capitalized.
For further information regarding the manufacturing
exemption, see FYI Sales 10 available on our Taxation
Enterprise Zones
Web site at , or call
The manufacturing exemption is expanded to exempt
(303) 238-SERV (7378).
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.”
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