DEPARTMENT OF REVENUE
Division of Motor Vehicles – Title and Registration Sections
1 CCR-204-10
RULE 23. Payment of Specific Ownership Taxes on Special MobileMachinery Rentals
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 to special mobile machinery dealerson the collection of specific ownership tax for special mobile machinery which is rented or leased to persons or entities and paid for using the 2% Rental SOT program.
1.0Definitions
1.1“2% Rental Specific Ownership Tax (SOT)” means the dealer elected alternate method for payment of special mobile machinery specific ownership taxes.
1.2“Dealer”means any special mobile machinery dealer regularly engaged in the sale, lease or rental of special mobile machinery.
1.3“Department” means the Department of Revenue of this state acting directly or through its duly authorized officers and agents.
1.4“Dual Rented” means either;
A. The renting of special mobile machinery from one dealer to another dealer who in turn rents that special mobile machinery to a person or entity; or
B. Multiple renting of the same special mobile machinery to persons or entities (either the same or different person or entity) that when combinedequals to at least a total of thirty days rented in a calendar year.
1.5“Lease” means the granting of use of special mobile machinery by another person or entity by the dealer for a period of more than thirty days.
1.6“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.
1.7“Rental” means special mobile machinery that is rented for a period of at least thirty days in a calendar year in which the dealer rents that special mobile machinery to another person or entity for payment.
1.8“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. Special mobile machinery includes vehicles commonly used in the construction, maintenance, and repair of roadways, the drilling of wells, and the digging of ditches.
Requirements
1.A dealer who owns special mobile machinery, that is 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 may elect to pay specific ownership tax using the 2% Rental SOT program. Dealers who rent special mobile machinery that is rented for less than thirty days in any calendar year shall not be eligible to participate in the 2% Rental SOT program and shall be required to pay specific ownership tax according to a standard twelve month registration period.
2.A dealer that desires to participate in the 2% Rental SOT programshall submitto the CountyMotor Vehicle office for authorization to participate in the 2% Rental SOT program on the forms required by the Department.
3.The dealer shall include with his/her request for participation in the 2% Rental SOT programthe sales tax number of any companies in which the dealer may have an interestor owns a share of.
4.Upon approval the CountyMotor Vehicle office shall provide instructions for reporting and submitting of specific ownership taxes for special mobile machinery participating in the 2% Rental SOT program. The dealer shall be required to furnish the CountyMotor Vehicle office with a list of all special mobile machinery that the dealer has elected to place into the 2% Rental SOT program. Only special mobile machinery that is registered shall be permitted to participate in the 2% Rental SOT program.
5.A SMM rental tab shall be issued to special mobile machinery that is registered. The SMM rentaltab shall expire concurrently with the registration of the special mobile machinery. The SMM rental tab shall only denote participation in the 2% Rental SOT program and shall not evidence registration of the special mobile machinery.
6.The County Motor Vehicle office will issue a SMM rentaltabfor each item of special mobile machinery listed on the dealer supplied list. The SMM rentaltab shall be hole punched in the appropriate areas to indicate the month and year of expiration. The dealer shall be required to pay all statutorily required fees in Title 42 of the Colorado Revised Statute upon issuance of the rental tab. Participation in the 2% Rental SOT program does not exempt the payment of, or offer an alternate means for payment of, statutorily required fees.
7.The SMM rentaltab shall be affixed to each item of special mobile machinery in a clearly visible location. The issuance of a number plate(s), validating tab or sticker, tags or certificates or a combination of a number plate(s), validating tab or sticker, tags or certificate as determined by the Department shall evidence the SMM registration.
8.Pre-issuance (commonly referred to as “Emergency 2% Rental Tab”) of SMM rental tabsis not authorized.
9.The dealer shall collect the 2% specific ownership tax upon the rental or lease of the special mobile machinery. The dealer shall collect and retain for remittance to the CountyMotor Vehicle office 2%of the rental or lease amount. Dealer shall be permitted to recover this amount from the person and/or entity that is renting or leasing the special mobile machinery.
10.The dealer shall no later than the twentieth day of each month submit on forms required by the Department a report of all special mobile machinery rentals and leases participating in the 2% Rental SOT program together with the remittance of all taxes collected for the preceding month, to each county where the special mobile machinery is or was being used. If a report was not submitted to the county where the tabs were obtained, an additional copy of the report shall be transmitted to said county. In addition, the dealer shall submit a copy of theDR2671 SMM RentalEquipment Monthly Tab Report and the combined DR0100 Colorado Retail Sales Tax Return to the Colorado Department of Revenue, Taxpayer Service Division, 1375 Sherman St.Denver, CO. 80261.
11.The dealer shallinclude on theDR 2671 all special mobile machinery with assigned SMM rental tabswhich was not rented or leased during the reporting period.
12.The dealer shall include on the monthly report all special mobile machinery with an assigned SMM Rental Tabthat was sold, and indicate the name and address of the purchaser. Before transporting or delivering any special mobile machinery which has been sold, the dealer shall remove all SMM Rental tabs.
13.Special mobile machinery that is dual rented during the same time period by two dealers who are both authorized to participate in the 2% Rental SOT program shall require the collection, remittance and reporting of the 2% Rental SOT on both rentals. Special mobile machinery that is dual rented for periods that total up to at least thirty days in a reporting period shall require the collections, remittance and reporting of the 2% Rental SOT on each rental period.
14.The payment of 2% Rental SOT shall not be authorized for the dealerof special mobile machinery that is rented or leased to another entity for which the dealer has an interest in or owns a share of.
15.No credit, reimbursement or refund shall begranted for payment or pre-paymentof 2% Rental SOT.
16.Failure to comply with these rules and regulations mayresult in cancellation of the dealer’s authorization to participate in the 2% RentalSOT program.