Prepaid Tax Estimate for Contractors Working on Construction Projects Not Requiring a City Permit

To all Contractors working within the City of Boulder:

Under Boulder’s Revised Code, the contractor is deemed to be the consumer of materials used in the construction project. Contractors may not avoid payment of the City of Boulder sales or use tax by placing provisions in a construction agreement or by using the name of a tax-exempt entity on an invoice or purchase order, regardless that the contractor is indicated thereon as the agent of a tax-exempt entity. No exemption certificate issued by the Colorado Department of Revenue or any other taxing authority shall be recognized as a basis for exemption from City of Boulder sales or use taxes.

Estimated use tax must be remitted to the City of Boulder prior to the start of the project. The tax is computed on the full contract price of the project. Follow these steps to compute and remit the sales/use tax to the City:

1. Multiply the full contract price by 0.5 (or 0.3 if construction in the City's right-of-way; sewer or water line installation or rehabilitation) and then multiply this result by the tax rate of 3.86% (0.0386). This is the tax that is due to the City prior to the start of the project.
   
   
2. Remit the tax to the attention of Sales Tax Department, P.O. Box 791, Boulder, CO 80306 along with a signed copy of this completed form. (A copy of this completed form will be emailed to you.)
   
   
3. At the completion of the project the contractor is required to file a construction use tax reconciliation return.
   

Contact the city by emailing CUT@bouldercolorado.gov or calling 303-441-3288 with any questions.