CO HB1025

Modifies the sales tax exemption for energy used in processing, manufacturing, mining, refining, irrigation, construction, communications, transportation, and industrial uses to apply only when energy is measured by a metered machine that quantifies usage for exempt purposes.

Identifies confusion and fraud risks in the current exemption system where taxpayers struggle to determine which energy qualifies and face different compliance processes based on whether exempt energy usage exceeds 75% of total consumption.

Establishes that taxpayers with exempt energy usage under 75% of total consumption must pay sales tax upfront and apply for refunds from the Department of Revenue.

Allows taxpayers with exempt energy usage of 75% or more to file a form with their energy provider to avoid upfront tax collection, with the provider reporting exempted amounts to the Department of Revenue.

Takes effect October 1, 2020, subject to voter approval if a referendum petition is filed within 90 days after final adjournment of the general assembly.