Permit Packet Info Sheet
Project Valuation - Fees and Estimated Taxes (Focus is on Scope of Work)
Project valuation is determined based on the labor and material costs for the scope of permitted work and is used to calculate:
- Building permit fees that are collected to recover the cost of building permit plan review, permit issuance and building inspection services.
- Prepayment of estimated Construction Use Taxes.
- Work that is exempt from a permit should not be included in the project valuation. Please reference B.R.C 10-5-2 (h) for the entire list.
Additional Payment of Construction Use Tax
Because the valuation calculated for permit fees may exclude certain construction materials and other taxable items, a contractor or homeowner may prefer to prepay additional use taxes above those calculated using 50 percent of the permit valuation.
The building department will accept additional prepayments of use taxes at any time prior to the completion of the project. These use tax payments do not affect permit fee calculations.
Permit Placard (Applies to ALL Construction Materials Related to the Project )
It is important to provide a copy of the building permit placard to all vendors when purchasing construction materials in order to avoid paying taxes twice. This is evidence that a local use tax has been paid or is required to be paid.
Because a pre-payment estimate was made at the time the permit was issued, construction materials may be purchased exempt from city and county tax only for the project to which the permit applies.
State and other non-municipal taxes, such as RTD, still apply. The exemption from sales tax applies only to construction materials (tangible personal property that becomes an integral and inseparable part of real property).
General contractors should provide a copy of their permit (showing tax pre-payment) to all subcontractors that purchase construction materials so they too can purchase materials without paying the city and county tax.
Taxes on Construction Materials
Taxes on all construction materials must be paid to the City of Boulder as follows:
- Through estimated tax deposit when the permit is issued
- Through the construction use tax reconciliation process
- Some city taxes may be paid directly to a vendor located in Boulder or that is licensed to collect Boulder tax at the time of purchase, but this should be avoided by presenting the permit placard to all vendors. Otherwise double taxation may occur.
Taxes on Non - Construction Materials
Taxes on non-construction materials, supplies and rental equipment can be paid as follows:
- Directly to the vendor in the city where the materials, supplies or equipment are picked up.
- Directly to a vendor that has a Boulder Sales/Use tax license when the items are delivered to the Boulder job site.
- By the contractor through the reconciliation.
Reconciliation on ALL Taxable Costs of Construction
Once the project is completed, if the final contract price or final project cost is $20,000 or more, reconciliation of all taxable costs of construction vs. prepayment of estimated tax is required within 90 days from the completion of the project.
Owners of construction equipment are subject to the equipment declaration and tax reporting provisions of B.R.C. 3-2-2(a). Please visit: www.bouldercolorado.gov/constructionusetax