Colorado Form DR 0511
Individuals with specific types of income and deductions must report them accurately to comply with tax regulations. For this purpose, they need to complete DR 0511. This form is used to declare sales tax exemption on farm equipment. It is valid for both state and special district sales and use taxes.
The state of Colorado allows farmers and agricultural operators to make tax-exempt purchases on certain items of equipment. To qualify for the exemption, a purchaser must provide a completed and signed Colorado Form DR 0511 to the vendor before making a purchase. The affidavit affirms that the purchased item will be used or consumed in farming. To qualify for the Colorado sales tax exemption on farm machinery, you must be a resident of Colorado and own land used for agricultural purposes. In addition, you must be engaged in an agricultural business that produces crops or livestock for sale in the state. You must also provide a valid government-issued ID.
How to Complete DR 0511?
To complete this form, start by providing your business information in Section 1. This includes your legal name, trade name (if applicable), and physical and mailing addresses. You should also provide your Federal Employer Identification Number or Social Security Number. In Section 2, describe the type of agricultural activity that you engage in. This can include farming, ranching, agriculture, or horticulture.
In Section 3, the purchaser must provide their sales and use tax account or exemption certificate numbers if they have one. They must also check the box to indicate whether the purchase is for resale, manufacturing, or ingredients and component parts. If the item is being used to manufacture tangible personal property in Colorado, the purchaser must also mark the appropriate box and complete the manufacturing instructions.
Finally, the affidavit must be signed and dated. If the affidavit is not signed, it will be considered invalid. To ensure that the signature is authentic, the affidavit must include the date and name of the person signing it.
Key Points for Colorado Form DR 0511
- The buyer completes and signs the DR 0511 form, affirming that the equipment will be used primarily and directly in their farm operation.
- The seller retains the completed form for their records.
- This exempts only state and state-administered special district sales and use taxes. Home-rule cities may have their own regulations.
- The exemption applies to equipment used for planting, growing, harvesting, or raising/breeding livestock for profit.
- The buyer remains liable for taxes, penalties, and interest if the equipment isn’t used as claimed.
