Current through Register Vol. 47, No. 5,
March 10, 2024
Basis: The statutory bases for this regulation
are 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 SMM owner elected alternate method for payment of special mobile
machinery (SMM) SOT.
1.2
"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.
1.3 "Department" means the Department of
Revenue of this state acting directly or through its duly authorized officers
and agents.
1.4 "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.
1.5 "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.
1.6 "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.
1.7 "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 owners' assigned fleet number placed upon it.
1.8 "DR 2671" means the required SMM Rental
Equipment Monthly Tab Report. The DR 2671 serves as the SMM owners' remittance
form for SMM participating in the SMM 2% Rental program and the SMM 2% Rental
Fleet program.
1.9 "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.
1.10 "Lease" for the
purpose of this regulation means the granting of use to operate SMM under an
agreement with the SMM owner.
1.11
"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.
1.12 "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.
1.13 "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.).
1.14
"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 in which the owner has not held an
interest for at least thirty days.
1.15 "Registration Period Certificate" means
the DR 2428 form completed and executed by the Colorado Department of Revenue,
Division of Motor Vehicles, Title and Registration Sections.
1.16 "Rental" for the purpose of this
regulation means the granting of use to operate SMM under an agreement with the
SMM owner.
1.17 "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.
1.18 "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.
1.19 "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.
1.20 "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
a. A SMM owner who meets all of the statutory
and regulatory requirements for participation in the SMM 2% rental program may
elect to participate in the SMM 2% Rental program. A SMM owner who meets the
statutory and regulatory requirements for both the SMM 2% Rental program and
the SMM 2% Rental Fleet program may elect to participate in either program, but
shall not be required to participate in either program.
b. SMM 2% Rental Program Eligibility
i. A SMM owner regularly engaged in the sale
or rental of SMM and who rents or leases SMM to another person 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.
c. SMM 2% Rental Fleet Program Eligibility
i. A SMM owner who meet 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
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.
2.1 A 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
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
form to the Colorado Department of Revenue Division of Taxation. Upon approval
and receipt of the DR 0160, the SMM owner shall attached 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 form with 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 of SOT for SMM to the
SMM owner. The SMM owner shall be required to 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.
i. Only SMM that is registered shall be
permitted to participate in the SMM 2% Rental program.
ii. The SMM owner shall be required to 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. A SMM rental identifying decal shall be
issued to SMM that is 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. Evidence of registration of the
SMM shall be completed by the issuance of, and 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. The SMM owner shall remit the 2% SOT
collected to the County Motor Vehicle office.
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 decal 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 SMM license plate upon
delivery of the SMM to the purchaser.
k. The DR 2671 shall be submitted to the
County Motor Vehicle office that issued the SMM rental identifying decal, and
to each County Motor Vehicle office for which the DR 2671 reflects the SMM
being operated in during that monthly reporting period.
l. No later than the twentieth day of each
month the SMM owner must submit the DR 0100 Colorado Retail Sales Tax Return
simultaneously with a copy of the DR 2671 to the Colorado Department of Revenue
Division of Taxation following the instructions on the DR 0100 for submittal
requirements.
m. No credit,
reimbursement or refund shall be granted for payment of 2% Rental
SOT.
n. Failure to submit the DR
2671 in a period of sixty days shall be grounds for the termination of such SMM
owners' 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
42-3-107(21),
C.R.S.
3.2 SMM 2% Rental
Fleet program participation and registration shall be completed as listed
below:
a. A 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. A SMM owner that meets the requirements
and elects to participate in the SMM 2% Rental Fleet program shall apply to the
Title and Registration Sections, Division of Motor Vehicles, Department of
Revenue using the DR 2428 form for assignment of a fleet number.
i. Upon validation that the SMM owner
qualifies to participate in the SMM 2% Rental Fleet program the Title and
Registration Sections will assign a 2% rental fleet number that is unique to
the approved SMM owner and all SMM registered in the SMM owners' fleet.
c. SMM registered in
the SMM 2% Rental Fleet program must be titled and registered in the SMM owners
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 owners name the
SMM owner must complete the following before participation in the SMM 2% Rental
Fleet is permitted. SMM owner shall be given up to sixty days to complete title
and registration name changes. SMM owner shall be permitted to 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
owners' 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
registrations will expire. The county in which the SMM will be registered shall
be permitted to elect, 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 owners' 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 shall be required to
furnish to the County Motor Vehicle office in which the SMM owners' principal
place of business is located a list of all SMM that the SMM owner has elected
to place into the SMM 2% Rental Fleet program with supporting ownership
documents.
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
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 owners declared fleet expiration date.
Renewal shall be completed using an annual fleet declaration in lieu of the
registration renewal post card. 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 the previously issued DR 0160
to assist in processing of SMM renewals. A newly executed DR 0160 shall 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
Ownership of SMM shall be established by submitting the document required in
Code of Colorado Regulation
1 CCR
204-10 Rule 18. Acceptable Evidence of Vehicle Proof
of Ownership.
a. A SMM owner that 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 form prior to the suspended title transaction
being performed. The suspended title transaction shall permit registration and
operation of the SMM, but 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. 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.
