City and County of Denver, Colorado
Topic No. 23
The DRMC imposes tax on entertainment services wherein the relay or transmission of electromagnetic waves is necessary for the service to be received.
Taxable "entertainment services" include purchased television programming not for re-broadcast, movies in hotel rooms for which there is a charge, and other purchased entertainment received via electromagnetic waves.
Background music is not considered "entertainment services" and is not subject to tax.
The provider of the service is subject to a sales/use tax on equipment used to provide the service.
1. A cable TV subscriber has the basic service, one movie channel service and three pay-per-view charges for two movies and one boxing match on her monthly bill. All of these charges are taxable. A neighbor subscribes to a new company that transmits the same services from Lookout Mountain. This subscriber receives the broadcasts via a small dish antenna supplied by the company. These charges are also taxable. An installation charge, if separately stated on the invoice, is not subject to the tax.
2. An office building subscribes to a service to provide background music to the elevators, hallways and common lobby areas of the building. In order to provide the service, the music company installs equipment, wiring, and speakers in the building. The monthly fee for the music is not subject to sales tax. The sales or rental charge to the office building for the equipment is subject to tax. If the equipment is included in the cost of the service, the provider of the service is subject to use tax on the equipment.
NOTE: In each example, the provider of the service is liable for sales or use tax on the equipment used to provide the service, whether or not the service is taxable, if the equipment charge is not separately stated and taxed to the customer.
* DRMC Section 53-25(6). Imposition of tax.
* DRMC Section 53-96(5). Imposition of tax.
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.