The Colorado Department of Revenue issued guidance to a taxpayer operating a colocation and hosting facility, which provided customers a place to securely store computer servers, on whether certain charges imposed by the taxpayer were subject to sales and use tax. Specifically, the taxpayer requested guidance on the applicability of sales and use tax to charges for: (1) providing cross connects (i.e., cables) for customer use; (2) private lines purchased from telecommunications providers and passed on to customers at a marked-up rate; and (3) licenses to use the taxpayer’s remote access software programs. The Department declined to make any specific determinations, but stated that whether the taxpayer was providing a service or renting cables depended on the true object of the transaction and that when addressing computer software and related hardware the Department considers a number of factors, including the degree of control exercised by the customer over the property. The Department also noted if the taxpayer’s customers used the private lines to make intrastate telephone calls or telegraphs, the taxpayer must collect sales tax on the entire charge, including the mark-up. Finally, the Department observed that software licenses for application service provider (ASP) software are not taxable; the taxpayer, however, had provided insufficient information for the Department to determine whether the taxpayer’s software was ASP software. Colo. Gen. Inf. Ltr. GIL-14-018, 07/28/2014 (released 10/07/2014).