Use Tax - Building Materials

FAQs

1. If I paid use tax on my building permit, how do I get exempt from paying sales tax?

   When a contractor/homeowner purchases building material for a licensed project, a copy of the building permit should be presented to the vendor showing that a tax has already been paid. The location of the project and the type of permit received will determine what tax the material is exempt from. State sales tax should always be paid since it is never collected on a building permit.

2. We are a contractor for an exempt organization, how do I prove the exemption?

   If you are a contractor building for an exempt organization, you should submit a Contractor Application for Exemption Certificate - DR0172 to the Department of Revenue. Once you receive the certificate from the State, present a copy to the Larimer County Building department when submitting the building permit, so no use tax is assessed. Also, when purchasing materials, give a copy to the vendor to exempt the purchase. The Exemption Certificate from the Department of Revenue is only valid for State and County taxes. If building or purchasing materials within a Town or City, please contact the jurisdiction to determine their exemption requirements.

3. If I have a Larimer County building permit, can I use it to purchase materials in other counties?

   Yes.  The exemption given with the building permit is valid for all counties in Colorado except the City & County of Denver and the City & County of Broomfield. If you present a copy of your building permit at the time of purchase, you will be exempt from any county sales tax.

4. If I paid use tax on my permit and sales tax when I purchased my materials, how do I get a refund?

   A project cost report must be completed for refunds of Building Material Use Tax or additional sales tax paid.  The form and instructions are on the Forms and Links page under the Larimer County Sales Tax Forms section. Larimer County Sales Tax Forms Section

5. Why do we have to pay use tax on the building permit? Why can't we just pay sales tax on the materials at the time of purchase?

   The use tax was put into place to help even the playing field between large contractors, who could ship their materials in from a jurisdiction with a lower (or no) sales tax, and the smaller contractors that purchase locally. With the use tax process, everyone has to pay the same rate of tax on the materials.