Construction Use Tax
Use Tax on Permits
Use tax is due on any building materials and supplies a.k.a “construction materials” for construction within the City of Lafayette. Any person obtaining a building permit must pay a use tax of 3.87% on 60% of the value of the permit.
All change orders are subject to 60% use tax fee throughout the project.
If the total use tax paid through the permit exceeds the value of the construction materials purchased and used in the project, then the business may file a claim for refund with the Sales Tax Division.
The Sales Tax Division may elect to determine through an audit the actual amount of use tax due on any project for any permit and/or claim for refund filed.
Construction materials (Sec. 110-37 Municipal Code)
Tangible personal property which, when combined with other tangible personal property, loses its identity to become an integral and inseparable part of a structure or project including public and private improvements may be deemed as construction materials.
Construction materials include but are not limited to, such things as:
asphalt, bricks, builders' hardware, caulking material, cement, concrete, conduit, electric wiring and connections, fireplace inserts, electrical heating and cooling equipment, flooring, glass, gravel, insulation, lath, lead, lime, lumber, macadam, millwork, mortar, oil, paint, piping, pipe valves and pipe fittings, plaster, plumbing fixtures, putty, reinforcing mesh, road base, roofing, sand, sanitary sewer pipe, sheet metal, site lighting, steel, stone, stucco, tile, trees, shrubs and other landscaping materials, wall board, wall coping, wallpaper, weather stripping, wire netting and screen, water mains and meters, and wood preserver.
The above materials, when used for forms, or other items which do not remain as an integral and inseparable part of completed structure or project are not construction materials.
Sales and use tax is also due on any building materials purchased and used in the city for any work that doesn’t require a building permit as normal retail sales.
A reconciliation process may be requested when the construction materials are more or less than the 60% pre-payment made through the permit.
Please note, regardless of whether a reconciliation is made, the City has the right to audit the construction permits to determine proper taxes paid. Documentation should be maintained by the contractor holding permit to support all job costs for the statute of limitations or up to the closure of a tax audit on the projects, whichever is later.
Construction Equipment located within the City is subject to tax. A declaration regarding the equipment to be used should be filed on or before the date the equipment is to be used in the boundaries of the City.
Please contact the Finance Department for construction tax reconciliation and equipment declarations.
Please see the Planning and Building Department for additional permit and other fee information.
Use Tax Liens (Sec. 110-150 (b) Municipal Code)
The full amount of any use tax due and not paid, together with penalties and interest as provided in this article, shall constitute a lien upon the real property benefited by the construction or improvement and the city treasurer is hereby authorized to file a notice of such lien with the Boulder County Clerk and Recorder's Office.