DALLAS—The Colorado Department of Revenue is clearing up some confusion among Colorado broadcasters about taxes on energy services being used to broadcast television programs. One Colorado station had been paying taxes on both electrical and natural gas services to operate the station from running broadcast transmitters and the control room to heating and powering the generator.
By Colorado rule, a sales tax applies to electrical and natural gas services that are used for commercial consumption. However, there is an exemption for radio communication and all industrial uses. Looking specifically at the TV station, the Department of Revenue determined that the exemption should only apply to energy use used in communication, and that broadcast was a service and not industrial. This allowed the station to take an exemption on the energy services used to power the television transmitter, but energy used for lighting, computers, heating and other non-communication purposes are subject to tax.
“This is an excellent example of identifying a rather obscure exemption that was available, which would likely not have been readily thought of for this service industry,” according to Ryan, a global tax service firm headquartered in Dallas.