Colorado Form Dr1778: A Guide To Sales Tax Exemption

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The state of Colorado provides several exemptions from sales tax to individuals and businesses that meet specific requirements. One of the most common exemptions is the exemption for sales tax on tangible personal property, which can be claimed by completing and submitting Form DR 1778. In this article, we will delve into the details of Form DR 1778, including its purpose, eligibility requirements, and the steps to complete and submit it.

What is Form DR 1778?

Form DR 1778 is a certification form used by the Colorado Department of Revenue to document a buyer's exemption from sales tax on tangible personal property. The form is used to verify that the buyer is eligible for a sales tax exemption, and it must be completed and signed by the buyer or their authorized representative.

Who is Eligible for Sales Tax Exemption?

To be eligible for sales tax exemption in Colorado, the buyer must meet one of the following requirements:

• Be a non-profit organization exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code
• Be a government agency or instrumentality of the state of Colorado or the United States government
• Be a public school or educational institution
• Be a church or other religious organization
• Be a charitable organization that provides assistance to low-income individuals or families

In addition to these requirements, the buyer must also use the tangible personal property for a purpose that is exempt from sales tax. For example, a non-profit organization that purchases office supplies for use in its exempt activities may be eligible for a sales tax exemption.

How to Complete Form DR 1778

To complete Form DR 1778, the buyer will need to provide the following information:

• The buyer's name and address
• The buyer's federal tax identification number (FEIN) or Social Security number
• A description of the tangible personal property being purchased
• The total purchase price of the property
• The date of the purchase

The buyer will also need to certify that they are eligible for a sales tax exemption and that the property is being purchased for an exempt purpose.

Steps to Complete and Submit Form DR 1778

To complete and submit Form DR 1778, follow these steps:

1. Download and print Form DR 1778 from the Colorado Department of Revenue's website or obtain a copy from the seller.
2. Complete the form in its entirety, providing all required information.
3. Sign and date the form.
4. Give the completed form to the seller, who will use it to verify the buyer's exemption from sales tax.
5. Keep a copy of the completed form for your records.

Benefits of Using Form DR 1778

Using Form DR 1778 can provide several benefits to buyers who are eligible for sales tax exemption. These benefits include:

• Saving money on sales tax
• Simplifying the purchasing process
• Providing documentation of the buyer's exemption from sales tax

Common Mistakes to Avoid

When completing Form DR 1778, there are several common mistakes to avoid:

• Failing to provide all required information
• Signing and dating the form incorrectly
• Using an outdated version of the form
• Failing to keep a copy of the completed form for your records

Additional Resources

For more information about Form DR 1778 and sales tax exemptions in Colorado, the following resources may be helpful:

• Colorado Department of Revenue's website:
• Colorado Sales Tax Exemption Guide: .pdf)

Conclusion

In conclusion, Form DR 1778 is an important document that can help buyers who are eligible for sales tax exemption in Colorado. By understanding the purpose and requirements of the form, buyers can take advantage of the benefits of sales tax exemption and simplify their purchasing process. We hope this guide has been helpful in explaining the details of Form DR 1778 and the sales tax exemption process in Colorado.