DENVER—The Colorado Court of Appeals has ruled that power producers are exempt from the state’s sales and use tax.
The court ruled Thursday that taxing the machinery would amount to a double tax on consumers because they also pay a retail tax on the power they use.
Xcel, one of the state’s largest providers, filed a lawsuit in 2006 after the Colorado Department of Revenue rejected an Xcel request for a refund on sales taxes it paid on machinery used to generate electricity.
According to the Grand Junction Daily Sentinel ( ), the district court ruled in Xcel’s favor, saying state law bars imposing sales and use taxes on tools and equipment that is used to manufacture a retail product.
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Information from: The Daily Sentinel,
