Colorado DOR Proposes Sales, Use Tax Rule on Tangible Personal Property Leases

The Colorado Department of Revenue (DOR) proposed a special rule regarding sales and use tax on leases of tangible personal property. The proposed regulation establishes guidelines for determining tax liability for lease transactions, distinguishing between long-term and short-term leases, and specifying when lessors may purchase property tax-free and when they must collect sales tax on lease payments. [Colo. Dep’t of Revenue, Proposed Reg. Section 1 CCR 201-5, Special Rule 46, 04/27/26]