City and County of Denver, Colorado
Topic No. 71
SALES TO EMPLOYEES
Denver licensed retailers that sell tangible
personal property or taxable services at retail to their employees must collect
and remit sales tax on such sales. This applies even if the employer makes
sales at retail only to employees and not to the general public. The sales are
taxable whether paid for in cash or deducted from the employee's wages. The tax
is calculated on the net price to the employee after discounts.
Fairway, Inc., a supplier of golf equipment and
accessories, sells merchandise to its employees at retail less 20%. On a $1,000
set of golf clubs sold to an employee, sales tax is due on the net price paid
2. National Oil and Gas, Inc.,
purchases new furniture and computer equipment for the regional office located
in Denver. All
items being replaced are offered for sale to employees at book value. National
Oil and Gas, Inc., has been issued a consumer use tax account by the Denver
Department of Revenue. Sales tax must be collected on all sales made to
employees and remitted with the company's next monthly use tax return. A letter
describing the sale should also be included, since the total monthly remittance
will include sales tax as well as use tax.
RELATED TAX GUIDE TOPIC
Sales and Rentals
* DRMC Section 53-24(17),(19).
* DRMC Section 53-25(1).
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