DR 0026N (10/25/19)
COLORADO DEPARTMENT OF REVENUE
Sales Tax Accounting Section
Denver CO 80261-0009
(303) 238-SERV (7378)
Colorado.gov/Tax
                     Tax Statement for Leased Motor Vehicle (DR 0026)
                                                   Instructions

Sales and Use Tax on Vehicles Sales                               Form Instructions

In general, auto dealers are required to collect sales tax on     Part 1. Vehicle Information
the purchase price of each motor vehicle they sell in Colorado    Enter the model year, make, model, and vehicle identification 
and prepare a Standard Sales Tax Receipt for Vehicle Sales        number for the leased vehicle.
(DR 0024) to document the collection of tax. However, 
auto dealers are not required to collect sales tax on the full    Part 2. Lessee Information
purchase price of a motor vehicle sold to a lessor who will       Enter the name and address of the lessee. Enter the name 
collect sales tax from the lessee on the lease payments. In       and address of the driver authorized for the leased vehicle.
lieu of a DR 0024, the dealer must instead complete a  Tax        Part 3. Lessor Information
Statement for Leased Motor Vehicle (DR 0026). The DR 0026         Enter the name and address of the lessor, the name and 
must be submitted to the county clerk along with the titling      address of the delivery agent, the date of the lease, the 
paperwork before title and registration can be issued.            lessor’s Colorado and city sales tax account numbers, and 
Leases of 36 Months or Less                                       the dealer number assigned by the Auto Industry Division 
If the lease term for a motor vehicle is 36 months or less,       of the Department of Revenue.
the sale of a motor vehicle to the lessor is subject to state     Part 4. Sales Tax on Amount Paid at Signing and Delivery
and state-administered sales  taxes unless the lessor             If the dealer receives any payment from the lessee at the 
has  filed  a   Lessor Registration for Sales Tax Collection      time of signing and delivery and is required to collect sales 
(DR 0440) and received permission from the Department             tax, the dealer must report the applicable state and state-
of Revenue to acquire the vehicle tax-free and collect sales      administered sales tax on the DR 0026. The sales tax is 
tax on the lease payments. If the sale of the vehicle to the      calculated on the entire amount of payment made at the 
lessor is taxable because the lease is for 36 months or less      time of signing  and delivery  including,  but not limited  to, 
and the lessor has not received permission to collect tax on      any capitalized cost reduction, first monthly payment, and 
the lease payments, the dealer must collect sales or use          refundable security deposit, except to the extent that the 
tax from the lessor, as applicable, on the full purchase price    amount due is satisfied by the trade-in of a vehicle owned 
of the vehicle and prepare a Standard Sales Tax Receipt           by the lessee.
for Vehicle Sales (DR 0024) in the same manner as any 
other motor vehicle sale. In such case, no sales tax should       If the tax is for the same city, county, and/or special district 
be collected from the lessee on the lease payments.               in which the dealership is located, the dealer must remit the 
                                                                  collected tax with its regular, monthly Colorado Retail Sales 
Amounts Paid at Signing and Delivery                              Tax Return (DR 0100) and report the tax in the applicable 
If the lease payments are taxable and the dealer receives         column in Part 4 of the DR 0026. If the tax is for a city, 
any payment from the lessee at the time of signing  and           county, and/or special district in which the dealership is not 
delivery, the dealer  must collect and report in Part 4 of        located, the dealer must remit the collected tax  with the  
the DR  0026 all applicable  state  and state-administered        DR 0026 to the county clerk and report the tax in the 
local sales taxes  based on the primary property location         applicable column in Part 4 of the DR 0026.
for the vehicle. If the dealer’s location is within the same 
                                                                  Part 5. Sales/Use Tax Payment for Home Rule City
city, county, and/or special district, the dealer must remit 
the collected  taxes with  the dealer’s monthly  Colorado         If the vehicle will be registered in a home rule city, the dealer 
Retail Sales Tax Return (DR 0100). If the dealer’s location       must calculate and report any sales or use tax imposed by 
is not within the same city, county, and/or special district      the home rule city, either on the amount paid at signing 
as the primary property location, the dealer must remit the       and delivery, the total of payments for the lease, or on such 
collected sales tax for that jurisdiction with this DR 0026.      other amount as the city requires. Enter, where required, 
                                                                  the number of months included in the lease agreement. 
Home Rule Cities
                                                                  Part 6. Total Amount Due with DR 0026
Home rule cities may have different rules regarding the tax 
treatment of leased motor vehicles, such as requiring the         Enter the sum of the amounts entered in Parts 4 and 5 
full payment of any sales or use tax they impose to the           under “Tax Remitted with DR 0026.” The dealer must remit 
county clerk prior to titling and registration or calculating the the  total  amount  due to  the  county clerk along with the  
tax due on an amount other than the full amount paid by the       DR 0026 and the titling paperwork.
lessee. If the vehicle is to be registered in a home rule city, 
the dealer must complete Part 5 to report the home rule city 
tax due, if any, prior to titling and registration.