Findings and Notice of Adoption

Emergency Regulation 39-26-102.13(Computer Software)

1 CCR 201-4

Roxy Huber, executive director of the Colorado Department of Revenue, delegated authority to Tim Weber, deputy director of the department, to make such findings and take such actions as are authorized and required by §24-35-104(6), C.R.S.regarding emergency regulations to implement HB10-1192.

Section §24-4-104(6), C.R.S. authorizes the department to issue an emergency regulation if the department finds that the immediate adoption of the regulation is imperatively necessary to comply with a state law or for the preservation of public health, safety, or welfare and compliance with the requirements of §24-4-104, C.R.S. would be contrary to the public interest.

Findings

The deputy director makes the following findings:

  1. House Bill10-1192describes the taxation of computer software and repeals Department Special Regulation 7 concerning computer software. This law became effective for sales, use, storage, or consumption of taxable computer software occurring on or after March 1, 2010.
  2. On March 2, 2010, the department issued emergency regulation 39-26-102.13, and readopted this emergency regulation on June 1, 2010, September 28, 2010 and January 10, 2011 (the latest version includes some modifications).
  3. The department has diligently pursued the drafting of a permanent regulation for HB10-1192 and held a rulemaking hearing on November 4, 2010.
  4. The emergency regulation expires on May 19, 2011. Due to the press of other high priority issues, the department has not had been able to address this regulation. The permanent regulation is to be adopted nearly simultaneously with this readoption of emergency regulation 39-26-102.13 (on January 19, 2011), to be effective March 17, 2011.
  5. Adoption of this emergency regulation is imperatively necessary in order to comply with state law and the preservation of welfare. House Bill 10-1192 will affect a significant number of taxpayers and involves substantial tax liabilities. Among other things, it introduces a concept not previously dealt with in Special Regulation 7 concerning apportionment of sales and use taxes for computer software. It is imperatively necessary that taxpayers have a correct regulation in effect on the effective date of HB10-1192 in order to avoid confusion on an important tax issue. Further, it is imperatively necessary that the regulation remain in effect continuously.
  6. Compliance with §24-4-104, C.R.S. by awaiting the effective date of the permanent regulation is contrary to the public interest for the reasons set forth herein.

Adoption and Notice of Adoption

For the reasons set forth above, the undersigned deputy director hereby adopts emergency regulation 39-26-102.13, which shall be effective for one-hundred twenty days from the date of this notice, unless sooner terminated or replaced by permanent regulations adopted in accordance with §24-4-104, C.R.S.

Adopted this 10 day of January, 2011.

For the Executive Director

Colorado Department of Revenue

Tim Weber

Deputy Director, Colorado Department of Revenue

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