Special Mobile Machinery (SMM)-2

SMM 2% Rental Program Information

The SMM 2% Rental Program is an alternative payment program allowing Colorado SMM companies who Rent or Lease SMM, for at least 30 days in a calendar year, to pay the Specific Ownership Tax on 2% of the Rental or Lease amount rather than paying the Specific Ownership Tax for a full year.

SMM 2% Rental Fleets that regularly have more than 10 pieces of SMM in the state, to register SMM with permanent decals or Fleet license plates without validation tabs.

Definition

Rental: A period of at least 30 days in a calendar year in which the owner of SMM rents that SMM to another entity for payment.

Lease: A period of more than 30 consecutive days in which the owner of SMM leases that SMM to another entity for payment.

To Participate in the SMM 2% Rental Program:

• SMM must first be registered with the SMM license plate or SMM Ownership Decal.

• The SMM Company must submit a completed DR 0440 – Permit to Collect Sales Tax on a Rental or Lease Basis to the Department of Revenue Sales Tax Division for approval.

• The SMM Company must complete the DR 2091 – SMM 2% Ownership Tax Authorization Request and submit it along with the Approved DR 0440 form to the county in which the Equipment Company is located. The county will either Approve or Reject the application.

• The DR 2091 - SMM 2% Ownership Tax Authorization Request must be remitted every year to the county office for approval.

• If the County rejects the SMM Company application, they cannot participate in the SMM 2% Rental Program.

• Once the application is approved, the SMM Company will furnish the county with a list of all their equipment. The County will assign an SMM 2% Rental Decal to each piece of equipment. These decals must be affixed to the outside of the SMM, visible to law enforcement.

• The decals are renewed every year and no renewal notice is provided. The SMM Company must provide the county with a complete list of all equipment each year.

• A DR 2671 SMM Rental Equipment Monthly Tab Report must be completed and sent by the 20th of each month to the following:

  • The county that issued the SMM 2% Rental Decals

  • Each county where the SMM was used

This report should reflect the SMM status as: Rented, Not Rented, or Sold for every SMM that has been issued a SMM 2% Rental Decal.

Applicable 2% Rental fees are remitted along with the DR 2671 SMM Rental Equipment Monthly Tab Report to each county in which the equipment was used. Any form used other than the official DR 2671 must be approved by the Department of Revenue – Registration Section.

SMM 2% Rental Fleet

SMM owner participating in the SMM 2% Rental program that regularly has more than 10 pieces of SMM in the state to register owned SMM in a SMM 2% Rental Fleet.

• SMM owner shall apply to the Title and Registration Sections using the DR 2428.

• Upon approval, the SMM will be registered in the SMM 2% Rental Fleet.

• SMM registered in an SMM 2% Rental Fleet will be issued:

  • On Highway SMM

    • Permanent SMM rental decal, and

    • Fleet license plate without validation tabs

  • Off Highway SMM

    • Permanent SMM rental decal, and

    • Permanent SMM specific ownership tax decal

• Similar to permanent fleet, SMM 2% Rental Fleets are not required to replace their decals or be issued year and month tabs annually.

• Please note that the SMM rental and specific ownership tax decals have been modified to include an area marked “PERM”. Upon issuance of the decals to SMM rental fleets the word “PERM” should be hole punched in lieu of an expire month and year.

Sold 2% Rental SMM

SMM reported as sold on the DR 2671 SMM Rental Equipment Monthly Tab Report should be checked in the Reg/Title program to verify that the new owner has registered the SMM in their name. If the new owner has registered the SMM, then no further action is necessary. If the new owner has not registered the SMM in their name, the county should send the new owner a letter notifying them of the registration requirements.

C.R.S. 42-3-107 (16)(b) states “The owner shall be required to remove any identifying decal upon the sale or change of ownership of such item of SMM.”