Construction Use Tax

Overview


When a building permit is issued, the City's use tax is collected in advance on materials and construction supply items. The amount of tax is based on an assumption that 60% of the project valuation is for materials and supplies. The tax rate is the same as the sales tax rate in effect at the time that the permit is issued.

When you buy materials and supplies for the job, the retailer may allow an exemption of the local sales tax, but not of state and district taxes. After the job is done, you may be entitled to a refund of excess City tax on materials and supplies, especially if the job was accurately valued and the permit was updated for change orders. A retailer or supplier is not required under state or local law to honor any exemption.  If this happens, please contact the Tax Division about a refund of any Wheat Ridge tax that was paid to a retailer or supplier. 


How to Use the Permit

  • Make copies of the permit.
  • Keep permit copies with you and give them to sub-contractors as needed.
  • Present a permit copy to each retailer for every purchase of job materials and supplies.
  • The prepaid tax is shown on the face of the permit.
  • By state law, the retailer has the right to deny any exemption.
  • If the retailer charges tax, or if you forget to use the permit, contact the city where the retailer is located, or the city where the items were delivered (if applicable), to get a refund. You'll need:
    • A clear copy of the invoice or receipt
    • A clear copy of the permit

Refunds of Excess Tax


Use Tax on Construction Equipment


Construction equipment used on-site for less than 30 days is subject to pro-rated City tax, with credit for tax paid elsewhere. Construction equipment used on-site for 30 days or more is subject to tax on the full purchase price of the equipment, with credit for local tax paid elsewhere.
Construction Equipment Use Tax Info and Form


Where to Get Answers


If you have questions about what work requires a building permit or would like to obtain any forms for getting one, visit the Building Division.

Please contact tax staff with any questions about the tax or refunds of the tax.

See Code Section 22-68 (Part II-Code of Laws, Chapter 22-Taxation, Article 1-Sales and Use Tax, Division 3-Use Tax) for the text of the law.