All of the current law sections presented in the act provide sales tax exemptions for specific items. None of the sales tax exemptions in the act authorize corresponding use tax exemptions. As a result, an item could conceivably become subject to use tax the instant the tax-exempt sale occurs. Most statutory sales tax exemptions have corresponding use tax exemptions to prevent this. Consequently, the act addresses defects in statute by clarifying that an item that is subject to a sales tax exemption is actually exempt from both sales and use tax and makes those statutory sections compatible with the fundamental principles of use tax and Colorado supreme court decisions on the subject.
(Note: This summary applies to this bill as enacted.)