By the Colorado Revised Statutes, Larimer County is allowed to collect use tax on the purchase of motor vehicles and building materials. Larimer County does not have a business property use tax. The difference between sales tax and use tax is that sales tax is collected at the point of sale; whereas, use tax is collected at a different point in time. For Larimer County the use rate is the same as the sales tax rate, .6%.
The Larimer County Motor Vehicle department collects the motor vehicle use tax at the time of registration. Motor vehicle use tax is due when:
For more information on motor vehicle registration, including requesting a refund of motor vehicle use tax, please refer to the Larimer County Motor Vehicle website.
The Larimer County Building department collects an estimated deposit of building material use tax at the time a Larimer County building permit is issued and paid for. Larimer County also has agreements with all of the Towns and Cities within the County to collect the County's estimated deposit of building material use tax upon the issuance of the building permit.More information on Building Material Use Tax
The building material use tax is considered a pre-payment of sales tax on building material used for the licensed project. To calculate the deposit of use tax due on a Larimer County building permit, building materials are estimated to be one-half of the valuation of the project given at the time of permit, multiplied by the use tax rate of .6%.
The contractor/home owner must present a copy of the County building permit to the vendor when purchasing the building materials to prevent double taxation. If no permit copy is presented, the vendor is required to collect the County sales tax. If the contractor/home owner has a building permit issued from a Town or City, only the State sales tax will be due if the permit is presented at the time of purchase.
At the end of the project a reconciliation is required to determine if the correct amount of use tax was collected on the building permit. Larimer County, along with many other taxing jurisdictions, use a form called a Project Cost Report (see below) to determine if additional taxes are due or if a refund is to be issued. Larimer County reserves the right to audit any construction project.
Many times the cost of a project changes for various reasons so at the end of the project, a Project Cost Report is used to reconcile the project. The completed Project Cost Report and any additional documentation is due within 60 (sixty) days of the Certificate of Occupancy, Finalization or Letter of Completion.More information on Project Cost Reports
The Project Cost Report takes the building material use tax plus any County sales tax paid and compares it to the sales tax that should have been paid on the actual material costs. If the contractor/home owner paid too much in a combination of sales and use tax, a refund is issued. If the contractor/home owner did not pay enough sales and use tax, additional taxes are due.
Typically, the party who filed and retained the building permit completes and submits the Project Cost Report packet. If the applicant does not complete and submit the Project Cost Report, the owner will be required to fulfill the requirements.
A complete Project Cost Report packet will include a completed Project Cost Report, copy of the building permit, and a final cost summary. Additional documentation may include copies of the subcontractor's invoices, copies of material receipts, subcontractor's affidavit, and any other back-up documentation to help support the claim. Original invoices, receipts or other documents will not be accepted.
To calculate the actual material costs, all material invoices are added to the materials from the subcontractors' invoices. It is preferred that actual material costs from the subcontractor be used when known. If not, fifty percent (50%) of the subcontractor's invoice will be used if a breakdown of material and labor cannot be provided. Actual material costs must include all taxable material used in the project, whether the materials were purchased by the contractor, subcontractors or the project owner.
There is a possibility that the sales and use tax rate will change during the construction of your project. To take advantage of the lower sales and use tax rates, dates of the purchases must be provided. The easiest way this can be done is to provide copies of all your receipts. Or you can have the purchases individually listed out on your job cost worksheet. If dates of the purchases are not documented, the sales and use tax rate when the building permit was issued will be used to determine the taxability of the material used in your project.
If sales tax was paid at the time of purchase, Larimer County will give credit for the County sales tax paid up to, but not exceeding, Larimer County's rate. Credit for additional County sales tax paid will only be given if copies of the receipts are provided.
The completed packet is to be submitted within 60 (sixty) days of the Certificate of Occupancy, Finalization or Letter of Completion. On the 61st day, a late penalty of 10% of the use tax deposit will be assessed and interest will start accruing on the penalty and any additional taxes due. If a refund is to be issued, the penalty and interest will reduce the amount owed back.
For projects applied for before or on June 30 2012, use the sales and use tax rate of 0.80%
For projects applied for after July 1st 2012, use the sales and use tax rate of 0.60%
To assist new contractors/home owners, Larimer County offers a Use Tax/Project Cost Report seminar. This will explain the background of the Project Cost Report, help you plan for the Project Cost Report at the end of your project, and offer some suggestions on how to keep organized and save money throughout the project. The 2014 dates for the seminar are:
|Thursday, April 17||11 a.m. – noon|
|Wednesday, May 14||3 p.m. – 4 p.m.|
|Friday, June 6||10 a.m. – 11 a.m.|
|Tuesday, July 15||3 p.m. – 4 p.m.|
|Wednesday, September 10||3 p.m. – 4 p.m.|
|Wednesday, October 30||11 a.m. – noon|
All seminars are held at the Financial Services Division conference rooms at 200 West Oak Street, Suite 4000 in Fort Collins. Please call (970) 498-5930 to register.
For tax exempt projects, the contractor should complete the Contractor Application for Exemption DR0172 and submit it to Department of Revenue. This form can be found by visiting: Colorado Department of Revenue – Sales Tax Forms. The prime or general contractor should obtain one certificate for the project and issues copies of the certificate to all the project's subcontractors.
Larimer County reserves the right to decline the exemption.