Current through Register Vol. 47, No. 17, September 10, 2024
Basis: The statutory bases for this regulation
are sections
42-1-204 and
42-3-107(16),
C.R.S.
Purpose: The purpose of this regulation is to
provide guidelines, clarify documents required and provide processes to SMM
Owners for the collection of specific ownership tax for special mobile
machinery that is rented or leased.
1.1 "2% Rental Specific Ownership Tax (SOT)"
means the owner-elected, alternate method for payment of special mobile
machinery SOT.
1.2 "Authorized
System" means the Department approved web-based portal and its infrastructure
allowing SMM Owners to perform 2% Rental reporting and additional functions for
the SMM 2% Rental Registration Exempt Program.
1.3 "Commercial Fleet License Plate" means
the Colorado red and white graphic license plate that contains the stacked
letters "FLT". Commercial Fleet license plates do not display validation year
and month tabs.
1.4 "Department"
means the Department of Revenue of this state acting directly or through its
duly authorized officers and agents.
1.5 "DR 0160" means the document issued by
the Department of Revenue Division of Taxation approving the collection of
sales tax on rentals or leases for the SMM Owner.
1.6 "DR 0440" means the form used to apply to
the Department of Revenue Division of Taxation for approval to collect sales
tax on rentals or leases.
1.7 "DR
2091" means the required authorization request provided to the County Motor
Vehicle office for the SMM Owner to participate in the SMM 2% Rental
program.
1.8 "DR 2101" means the
required authorization request provided to the Department of Revenue for an SMM
2% Rental company to authorize electronic filing access.
1.9 "DR 2428" means the form requesting
participation, and upon execution, authorization to participate in the SMM 2%
Rental Fleet program. Upon approval, the DR 2428 shall have the SMM Owner's
assigned fleet number placed upon it.
1.10 "DR 2671" means the required SMM Rental
Equipment Monthly Tab Report. The DR 2671 serves as the SMM Owner's remittance
form for SMM participating in the SMM 2% Rental program, the SMM 2% Rental
Fleet program, and the SMM 2% Rental Registration Exempt program.
1.11 "DR 2689" means the application
completed by the SMM Owner to provide information required to title, register,
or perform a suspended title transaction by the County Motor Vehicle
office.
1.12 "DR 2192" means the
required authorization request to participate in the SMM 2% Rental Registration
Exempt program provided to the Department of Revenue
1.13 "DR 2851" means the required SMM Annual
Statement for SMM Owners participating in the SMM 2% Rental Registration Exempt
program. The DR 2851 serves as the SMM Owner's inventory of equipment, and
calculates annual fees due upon initial application or annual renewal for the
SMM 2% Rental Registration Exempt Program.
1.14 "Lease" for the purpose of this
regulation means the granting of use to operate SMM under an agreement with the
SMM Owner.
1.15 "Mounted Equipment"
means any item weighing more than five hundred pounds that is permanently
mounted on a vehicle including mounting by means such as welding or bolting the
equipment to a vehicle.
1.16 "New
Special Mobile Machinery (SMM)" means SMM that has not been previously titled
or Registered to the current SMM Owner in the State of Colorado.
1.17 "Operate" means to pull, haul, or drive
SMM over the highways or the use of SMM for its intended purpose (e.g. digging
ditches, road repairs, etc.).
1.18
"Owner" for the purpose of this regulation means an equipment dealer regularly
engaged in the sale or rental of special mobile machinery and who rents or
leases such equipment to another person or business in which the owner has not
held an interest for at least thirty days.
1.19 "Registration Period Certificate" means
the DR 2428 form completed and executed by the Colorado Department of Revenue,
Division of Motor Vehicles, Vehicle Services Section.
1.20 "Rental" for the purpose of this
regulation means the granting of use to operate SMM under an agreement with the
SMM Owner.
1.21 "Registered" means
the SMM has been issued a number plate(s), validating tab or sticker,
certificates, or identifying decal or a combination of number plate(s),
validating tab or sticker, certificates, or identifying decal as determined by
the Department evidencing the annual SMM requirements have been met pursuant to
section 3 of title 42 of the Colorado Revised Statutes.
1.22 "SMM License Plate" means the Colorado
green and white graphic license plate that contains the stacked letters "SMM".
SMM license plates shall display validation year and month tabs.
1.23 "SMM Registration Exempt Certificate"
means the certificate issued by the Department showing the Owner is
participating in the SMM 2% Rental Registration Exempt program.
1.24 "Special Mobile Machinery (SMM)" means
machinery that is pulled, hauled, or driven over a highway and is either:
a. A vehicle or equipment that is not
designed primarily for the transportation of persons or cargo over the public
highways; or
b. A motor vehicle
that may have been originally designed for the transportation of persons or
cargo over the public highways, and has been redesigned or modified by the
addition of mounted equipment or machinery, and is only incidentally operated
or moved over the public highways.
c. SMM includes vehicles commonly used in the
construction, maintenance, and repair of roadways, the drilling of wells, and
the digging of ditches.
1.25 "Specific Ownership Tax (SOT)" means the
annual tax, in lieu of ad valorem taxes, imposed on personal property by
section 6 of article X of the State Constitution.
2.0
SMM 2% Rental
Programs
2.1 An SMM Owner
who meets all the statutory and regulatory requirements for participation in
the SMM 2% rental program may elect to participate in the SMM 2% Rental
program. An SMM Owner who meets the statutory and regulatory requirements for
the SMM 2% Rental program, the SMM 2% Rental Fleet program, or the SMM 2%
Rental Registration Exempt program, may elect to participate in any program,
but shall not be required to participate in any program.
a. SMM 2% Rental Program Eligibility
i. An SMM Owner regularly engaged in the sale
or rental of SMM and who rents or leases SMM to another person, or business in
which the SMM Owner has not held an interest for at least thirty days may elect
to participate in the SMM 2% Rental program.
b. SMM 2% Rental Fleet Program Eligibility
i. An SMM Owner who meets the requirements to
participate in the SMM 2% Rental program and also meets the below criteria may
elect to participate in the SMM 2% Rental Fleet program.
A. SMM Owner is paying specific ownership tax
(SOT) under section
42-3-107(16),
C.R.S.; and
B. The SMM Owner
regularly has more than ten pieces of SMM in the State of Colorado;
and
C. The SMM Owner has applied
for and received the approved and executed DR 2428.
c. SMM 2% Rental Registration
Exempt Program Eligibility
i. An SMM Owner who
meets the requirements to participate in the SMM 2% Rental program and meets
the below criteria may elect to participate in the SMM 2% Rental Registration
Exempt program.
A. SMM Owner meets the
requirements in section
42-3-107, C.R.S., for
participating in the SMM 2% Rental Registration Exempt program; and
B. The SMM Owner has applied for and received
the approved and executed DR 2192; and
C. The SMM Owner has applied for and received
the approved and executed DR 2101.
2.2 An SMM Owner qualifying and electing to
participate in either the SMM 2% Rental program or the SMM 2% Rental Fleet
program must meet all the requirements for that program in section 3.0 of this
regulation before payment of SOT under section
42-3-107(16),
C.R.S., is granted.
3.0
SMM
Rental Programs Participation and Processes
3.1 SMM 2% Rental program participation and
registration shall be completed as listed below:
a. The SMM Owner shall submit the DR 0440 to
the Colorado Department of Revenue Division of Taxation. Upon approval and
receipt of the DR 0160 from the Division of Taxation, the SMM Owner shall
attach a copy of the DR 0160 to the DR 2091 and complete the processes
below.
b. The SMM Owner shall apply
to the County Motor Vehicle office in the county where the SMM Owners principal
place of business is located by submitting a DR 2091 with a copy of the DR 0160
attached.
c. Upon county approval
to participate in the SMM 2% Rental program, the County Motor Vehicle office
shall provide instructions for reporting and submitting SOT for SMM to the SMM
Owner. The SMM Owner must furnish the County Motor Vehicle office with a list
of all SMM that the SMM Owner has elected to place into the SMM 2% Rental
program with supporting ownership documents, unless ownership documents were
previously presented.
i. Only SMM that are
Registered may participate in the SMM 2% Rental program.
ii. The SMM Owner must pay all statutorily
required fees in Title 42 of the Colorado Revised Statutes upon approval and
issuance of the SMM rental identifying decal. Participation in the SMM 2%
Rental program does not exempt the payment of, or provide an alternate means
for payment of, other statutorily required fees.
d. An SMM rental identifying decal shall be
issued to SMM that are Registered and participating in the SMM 2% Rental
program. The SMM rental identifying decal shall expire concurrently with the
registration of the SMM. The SMM rental identifying decal shall only denote
participation in the SMM 2% Rental program and shall not be evidence of
registration, or permit operation of, the SMM. An SMM Owner shall demonstrate
registration by affixing to the SMM the below:
i. SMM designed to be operated on the highway
shall be issued an SMM license plate with validation month and year
tabs.
ii. SMM not designed to be
operated on the highway shall be issued an SMM ownership identifying decal with
registration expiration month and year indicated on the decal by hole punching
the appropriate areas.
e. The County Motor Vehicle office will issue
an SMM Rental identifying decal and SMM license plate or SMM ownership
identifying decal for each item of SMM placed into the SMM 2% Rental program by
the SMM Owner. The SMM rental identifying decal shall be hole punched in the
appropriate areas to indicate the month and year of expiration. The SMM rental
identifying decal shall be valid in every Colorado county where the SMM is
operated.
f. The SMM rental
identifying decal shall be affixed to each item of SMM in a clearly visible
location.
g. The SMM Owner shall
collect the 2% SOT upon the rental or lease of the SMM from the person or
entity that is renting or leasing the SMM, in the State of Colorado.
h. No later than the twentieth day of each
month the SMM Owner must submit the DR 2671 together with taxes collected for
the preceding month to each county where the SMM was being operated and to the
county where the SMM is Registered in for the month or portion of the month the
DR 2671 is being reported.
i. The
SMM Owner shall include on the DR 2671 all SMM with assigned SMM rental
identifying decals that were not rented or leased during the reporting
period.
j. The SMM Owner shall
include on the DR 2671 any SMM authorized to participate in the SMM 2% Rental
program that were sold, and indicate the name and address, if the address is
available, of the purchaser. The SMM Owner shall remove the SMM rental
identifying decal, SMM ownership identifying decal, and/or SMM license plate
upon delivery of the SMM to the purchaser.
k. No later than the twentieth day of each
month the SMM Owner must submit the DR 0100 Colorado Retail Sales Tax Return to
the Colorado Department of Revenue Division of Taxation following the
instructions on the DR 0100 for submittal requirements.
l. No credit, reimbursement, or refund shall
be granted for payment of 2% Rental SOT.
m. Failure to submit the DR 2671 in a period
of sixty days shall be grounds for the termination of such SMM Owner's right to
participate in the SMM 2% Rental program. If the SMM Owner fails to remit SOT
received from a renter or lessee during such sixty-day period the county may
collect such delinquent taxes in the manner authorized in section
42-3-107(21),
C.R.S.
3.2 SMM 2% Rental
Fleet program participation and registration shall be completed as listed
below:
a. An SMM Owner that meets the
requirements and elects to participate in the SMM 2% Rental Fleet program must
first be approved to participate in the SMM 2% Rental program as detailed above
in section 3.1 of this regulation.
b. An SMM Owner that meets the requirements
and elects to participate in the SMM 2% Rental Fleet program shall apply to the
Vehicle Services Section, Division of Motor Vehicles, Department of Revenue
using the DR 2428 for assignment of a fleet number.
i. Upon validation that the SMM Owner
qualifies to participate in the SMM 2% Rental Fleet program, the Vehicle
Services Section will assign a 2% rental fleet number that is unique to the
approved SMM Owner and all SMM Registered in the SMM Owner's fleet.
c. SMM Registered in the SMM 2%
Rental Fleet program must be titled and Registered in the SMM Owner's name as
declared on the DR 2428.
i. In the event of a
legal name change or if the SMM being Registered in the SMM 2% Rental Fleet
program are not titled and Registered in the SMM Owner's name, the SMM Owner
must complete the following before participation in the SMM 2% Rental Fleet is
permitted. SMM Owners must complete title and registration name changes within
sixty days. The SMM Owner may rent, lease, and operate the SMM during these
sixty days.
A. All SMM Registered in the SMM
2% Rental Fleet program associated with the SMM Owner's assigned fleet number
must have their titles and registrations properly transferred to the new name;
and
B. The SMM Owner shall complete
the SMM 2% Rental Fleet approval processes in section 3.2b above in the
regulation.
d. The SMM Owner must declare one common
expiration month, and alternate expiration months, during which the
registrations for all SMM Registered in the SMM Owner SMM 2% Rental Fleet will
expire. The State or its authorized agent will determine, from the months
declared by the SMM Owner, the month during which SMM registrations
expire.
e. SMM 2% Rental Fleet
program registration:
i. Registration of SMM
into the SMM 2% Rental Fleet program is completed in the county in which the
SMM Owner's principal place of business is located. Payment of taxes and
registration fees due shall be required at the time of the 2% Rental Fleet
registration.
ii. The SMM Owner
must furnish a list of all SMM that the SMM Owner has elected to place into the
SMM 2% Rental Fleet program with supporting ownership documents, unless already
presented, to the County Motor Vehicle office in which the SMM Owner's
principal place of business is located.
iii. SMM initially being Registered in the
SMM 2% Rental Fleet program shall have taxes and registration fees prorated by
the remainder of the time remaining from the month of registration to the
expiration month.
iv. The SMM Owner
will be issued and shall affix to the SMM being Registered in the SMM 2% Rental
Fleet program:
A. For SMM designed to be
operated on the highway.
1) A permanent
commercial fleet license plate without validation month or year tab;
and
2) A permanent SMM rental
identifying decal hole punched to indicate the fleet expiration month and that
the decal is a permanent decal.
B. For SMM not designed to be operated on the
highway.
1) A permanent SMM SOT identifying
decal hole punched to indicate the fleet expire month and in an area on the
decal indicating it is a permanent decal; and
2) A permanent SMM rental identifying decal
hole punched to indicate the fleet expiration month and that the decal is a
permanent decal.
v. Upon registration of the SMM in the SMM 2%
Rental Fleet the SMM Owner shall collect, report, and remit specific ownership
tax pursuant to section
42-3-107(16)(c) and
(d), C.R.S., and sections 3.1 of this
regulation.
vi. Renewal of SMM 2%
Rental Fleet
A. Annual renewal of SMM
Registered in the SMM 2% Rental Fleet program shall be completed for all SMM
Registered in the fleet on the SMM Owner's declared fleet expiration date.
Renewal shall be completed using an annual fleet declaration in lieu of the
registration renewal postcard. The fleet declaration shall be completed by the
SMM Owner and submitted to the County Motor Vehicle office together with the DR
2091. If available, the SMM Owner should attach a copy of the previously issued
DR 0160 to assist in processing of SMM renewals. A newly executed DR 0160 will
not be required annually.
B.
Renewals are complete upon payment of annual taxes and registrations fees
required and issuance of a registration receipt for the permanent Commercial
Fleet license plate or permanent SMM SOT identifying decal. An annual
registration receipt for the permanent SMM rental identifying decal will also
be issued.
C. Replacement of the
permanent SMM SOT identifying decal or permanent SMM rental identifying decal
is not required. Damaged, unreadable, or lost identifying decals shall be
replaced.
3.3 SMM 2% Rental Registration Exempt program
participation and registration shall be completed as listed below:
a. SMM 2% Rental program participants must
apply for acceptance into the SMM 2% Rental Registration Exempt Program.
i. The SMM Owner shall submit the initial
application DR 2192, DR 2851, and DR 2101 Request for Access to the Colorado
Department of Revenue State Office by email (at the email listed on the DR
2192).
ii. Upon approval of the
application, the SMM Owner must pay all annual fees described in section
42-3-107, C.R.S.
A. The Owner must log in to the Authorized
System to pay annual fees.
B. Upon
approval of the application and payment of all annual fees described in section
42-3-107, C.R.S., a Registration
Exemption Certificate will be issued by the Department. The certificate will be
valid for a period of one year from the month the described payment was made.
This certificate must be available for review by Department representatives,
law enforcement, those renting equipment, and other interested
parties.
iii. No credit,
reimbursement, or refund shall be granted for any equipment entering or exiting
the SMM 2% Rental Registration Exempt program.
iv. SMM participating in this program will
not be required by the Department to be Registered. The Department will not
issue any identifying decals or plates (for both on-highway or off-highway).
A. If SMM has a decal or plate that was
associated with a previous registration as part of the SMM 2% Rental program or
SMM 2% Rental Fleet program, the Owner shall remove and destroy, or return to
the county of issuance, the SMM rental identifying decal, SMM ownership
identifying decal, and SMM license plate upon entering the SMM 2% Rental
Registration Exempt program.
b. SMM 2% Rental Registration Exempt program
participants must collect, report, and remit specific ownership tax pursuant to
section 42-3-107(16)(c) and
(d), C.R.S., and sections 3.1 of this
regulation.
i. The SMM Owner shall collect
the 2% SOT upon the rental or lease of the SMM from the person or entity that
is renting or leasing the SMM, in the State of Colorado. The SMM Owner shall
remit the 2% SOT collected to the Department.
A. No later than the twentieth day of each
month the SMM Owner must submit the DR 2671 for the preceding month using the
Department Authorized System.
B.
The SMM Owner will use the Department Authorized System to pay the monthly 2%
SOT within 5 business days after the DR 2671 has been reviewed and approved by
the Department.
ii. No
credit, reimbursement or refund shall be granted for payment of 2% Rental
SOT.
c. Annual renewal
of SMM in the SMM 2% Rental Registration Exempt program shall be required for
all SMM in the 2% Rental Registration Exempt program prior to the expiration of
the SMM Registration Exempt Certificate.
i.
Renewal shall be completed using the DR 2851. The form shall be completed by
the SMM Owner and submitted to the Department using the Authorized System, no
sooner than 30 calendar days prior to the expiration of the SMM Registration
Exempt Certificate, but no later than 10 calendar days after the expiration of
the SMM Registration Exempt Certificate.
A.
Renewals are complete upon payment of Registration fees, calculated for both
the new annual report, and pro-rated for equipment added during the previous
certification cycle, using the Department Authorized System.
B. An SMM Registration Exempt Certificate
will be issued with a new expiration date, one year from the date of the
previous expiration date.
C. The DR
2851 SMM Annual Pro-Rated section will be completed to identify and calculate
fees due for items of equipment that were added during the period covering the
expiring Registration Exempt Certificate, not previously indicated in the SMM
Exempt Annual Report section of the DR 2851. The DR 2851 Annual Report section
will identify and document all items of equipment currently in Colorado to
begin a new Registration Exempt Cycle.
d. An SMM Owner with an existing SMM
Registration Exempt Certificate, exiting the SMM Registration Exempt Program,
must complete the following:
i. The DR 2851
SMM Annual Pro-Rated section will be due within 20 calendar days of exiting the
program. This report will identify and calculate fees due for any item of SMM
equipment added during the time between the previous SMM Annual Report and the
date of exit.
ii. Items of
equipment will be subject to registration requirements beginning on the date of
exit from the program.
e. Participation in the SMM 2% Rental
Registration Exempt program shall require SMM Owners to comply with the
following requirements.
i. The Department may
require that files containing evidence of compliance and proper use be provided
using the Department's Authorized System, at the request of the Department.
A. These files may include, but not be
limited to, images, weight slips, forms, evidence of ownership, and rental
receipts.
ii. The
Department may verify requirements of the program and ensure integrity of the
information provided by the SMM Owner on a monthly or annual basis via on-site
visits.
iii. SMM in the SMM 2%
Rental Registration Exempt program, that are required to be titled pursuant to
section 42-1-102, C.R.S., must be properly
titled to achieve compliance in this program.
iv. SMM in the SMM 2% Rental Registration
Exempt program that are used on-highway and utilize toll roads or lanes, are
required to submit payment to tolling authorities pursuant to section
43-3-302, C.R.S.
v. SMM Owners are prohibited from using any
registration credit that may generate for previously registered SMM, as a
result of entering the SMM 2% Rental Registration Exempt program, per section
42-3-107(25)(a)(I),
C.R.S.
vi. Refunds will not be
issued by the Department or Counties, for SMM renewed or registered in error
for SMM covered in the SMM 2% Rental Registration Exempt program.
f. Failure to comply with any
regulation set forth in these rules and/or Colorado Revised Statutes may result
in a permanent or temporary suspension from the SMM 2% Rental Registration
Exempt program.
3.4
Ownership of SMM shall be established by submitting documentation that meets
the requirements in Code of Colorado Regulations 1 CCR 204-10 Rule 18.
Acceptable Evidence of Vehicle Proof of Ownership.
a. An SMM Owner who is unable to provide
acceptable evidence of vehicle proof of ownership should be permitted to
register the SMM by completing a suspended title transaction with the County
Motor Vehicle office. The SMM Owner shall complete and provide to the County
Motor Vehicle Office the DR 2689 prior to the suspended title transaction being
performed. The suspended title transaction shall permit registration and
operation of the SMM, but the county shall not issue a Colorado Certificate of
Title to the SMM Owner until such time the SMM Owner provides acceptable
evidence of vehicle proof of ownership. An SMM Owner with a registration
created from a suspended title transaction has one (1) year from the date of
application, or rule adoption (whichever occurs later), to provide the County
Motor Vehicle Office with acceptable Evidence of Vehicle Proof of Ownership.
Agents of the Department may add a registration hold at their discretion after
SMM has been issued a registration in suspense in order to comply with these
requirements. The suspended title transaction shall be completed using the DR
2689. Additional documents, forms, or a VIN verification shall not be
required.
b. Upon successful
completion of the suspended title transaction, the County Motor Vehicle Office
shall register the SMM and issue to the SMM Owner a registration receipt and
identifying decals and/or license plates.
3.5 Appeals
a. If an SMM 2% Rental Registration Exempt
application has been denied, the SMM Owner may request a hearing in writing,
within 60 days after the date of notice of denial. Written hearing requests
shall be submitted to the Department of Revenue, Hearing Section, via email at
dor_regulatoryhearings@state.co.us or by mail at PO
Box 17087, Denver, CO 80217-0087.
b. The hearing shall be held virtually with
the Department of Revenue, Hearings Division. The presiding hearing officer
shall be an authorized representative designated by the Executive Director. The
department's representative need not be present at the hearing unless the
presiding hearing officer requires his or her presence in writing. If the
Department's representation is not present at the hearing, the hearing officer
has the discretion to consider any written documents and affidavits submitted
by the Department.
