Learn about taxes assessed on construction projects, including construction equipment and contractors.
Construction Use Tax is the sales/use tax paid by contractors or homeowners for construction materials used when erecting, building, remodeling or repairing real property. The payment of construction use tax is a requirement of obtaining a city permit.
Reconciliation is a process of filing a construction use tax return upon completion of a permitted construction project to determine whether there was an overpayment or underpayment of Construction Use Tax. Filing of the return is required for all construction projects where the final contract price is $75,000 or more.
A tax return must be filed/paid within 90 days of the certificate of occupancy date or the date that the city designates the project has a completed status.
After completing a permitted construction project where the use tax pre-payment option is used, the general contractor or homeowner acting in the capacity of a contractor is the person responsible for completing the Construction Project Cost Reconciliation Return to determine if the use tax due is more or less than the prepaid tax estimate.
Yes, any person that owns construction equipment with a purchase price of $2500 or more and brings it into the City of Boulder for use or storage is required to file a Construction Equipment Declaration to determine the use tax that may be owed to the City. Refer to Boulder Revised Code (BRC) 1981 section 3-2-2(a)(9)-(14) and Tax Regulations on Construction and Contractors.
No. Boulder Revised Code 3-17-6(a)(4) does not allow sales or use tax credits on construction materials when a prepayment was made. Contractors/subcontractors must present a copy of a building permit when purchasing construction materials to avoid paying city and county sales tax at the time of purchase, as the appropriate use tax has been prepaid with the building permit.
| Final Contract Price | RECONCILIATION REQUIRED |
|---|---|
| Less than $75,000 | NO |
| $75,000 or more | YES- Due within 90 days from completion of the project |
According to the Construction and Contractors Tax Compliance Guide, there are taxes assessed on construction projects, including construction equipment and contractors. In order to have these assessed, you need to find the appropriate form(s) and submit them to our office. Please refer to the Tax Regulation for specifics.
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