Information About Construction Use Tax
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 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.
Reconciliations Expectations
| Final Contract Price | RECONCILIATION REQUIRED |
|---|---|
| Less than $75,000 | NO |
| $75,000 or more | YES- Due within 90 days from completion of the project |
How to File a Construction Use Tax Reconciliation Online
Have these 3 items ready
- The final job cost accounting record (or other accounting or billing documents) that show the actual total cost of construction;
- The project invoice(s) showing the final total project price billed to customer;
- Copies of subcontractor affidavits and purchase invoices showing any city or county taxes paid.
Go to the Boulder Online Tax System
Click on 'File a Construction Use Tax Reconciliation'
Construction & Contractors
According to the Construction and Contractors Tax Regulation, 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.
Common Problems with Reconciliation Returns
- Not including all taxable purchases (materials and other tangible personal property) in the taxable amount on line 4.
- Claiming credit for other city, state, or county tax on line 8.
- Claiming credit for all permit fees and taxes on lines 6 and 7.
- Not including the necessary documents to support the reconciliation information.