City and County of Denver, Colorado

TAX GUIDE

Topic No. 27

FARM MACHINERY

 

Sales and purchases of farm machinery are exempt from Denver tax. For equipment to meet the meaning of farm machinery, it must be used for farming activities on agricultural land. Equipment used for gardening does not meet the exemption.

 

Farm machinery, for purposes of this article, is defined as self- propelled or power-drawn equipment used directly for plowing, planting, cultivating and harvesting of crops. Equipment which does not meet this definition of farm machinery is not exempt under the ordinance.

 

EXAMPLES

 

1.     ABC Heavy Equipment, a Denver vendor, deals exclusively in farm machinery and equipment. Farmer Jones purchases all of his combines, tractors, plows, discs, planters, and rakes from this Denver vendor. Farmer Jones uses this machinery strictly for plowing, planting, cultivating and harvesting of crops on his land which is zoned for farming. All of the above items that Farmer Jones purchases are considered farm equipment and are therefore exempt from sales and use tax.

 

2.     XYZ Landscaping, a commercial landscaping construction contractor, buys three tractors from ABC Heavy Equipment and takes delivery of the equipment in Denver. XYZ's equipment purchases do not qualify for the farm machinery exemption and are therefore taxable.

 

 

* DRMC Section 53-24(7). Definitions.

* DRMC Section 53-26(12). Exemptions.

* DRMC Section 53-95(8). Definitions.

* DRMC Section 53-97(13). Exemptions.

 

 

 

THE ABOVE INFORMATION IS A SUMMARY IN LAYMAN'S TERMS OF THE RELEVANT DENVER TAX LAW FOR THIS INDUSTRY OR BUSINESS SEGMENT. IT IS NOT INTENDED FOR LEGAL PURPOSES TO BE SUBSTITUTED FOR THE FULL TEXT OF THE DRMC AND APPLICABLE RULES AND REGULATIONS.

 

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