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Colorado rule applies sales tax to digital media, streaming services

January 2021


The Colorado Department of Revenue has adopted final rule changes that treat electronic downloads and internet streaming of digital media as taxable purchases of tangible personal property. The rule changes are effective January 30, 2021. [Rule 39-26-102(15), 1 CCR 201-4, published 1/10/21]

The takeaway

The rule changes reflect the Department of Revenue’s position on the taxability of ‘digital equivalents’ of tangible personal property. However, the rule does not explain the basis for determining such ‘digital equivalent’ status, which is particularly difficult when considering the nature of digital libraries and streaming services.

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Peter Michalowski

Partner, State and Local Tax Consulting Leader, PwC US

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