Sales and Use Tax Common Questions
For sales or use tax questions not addressed on this page, you may call (970) 498-5930 or email the Sales Tax Administrator.
Sales/Use Tax Change
- As a vendor, what does the rate change mean to me?
As a vendor, starting Sunday, July 1st , you should start collecting and remitting the lower County sales tax rate of 0.60%. This is in addition to the State sales tax rate of 2.9% and any applicable city/town rate.
See the County and Municipality Sales Tax Table with Contact Information
page for the total sales tax rates within the different taxing jurisdictions.
- What should I do if I erroneously collect the wrong sales tax amount?
By state statute, any additional sales tax collect needs to be refunded to the purchaser, or if unable to remitted to the taxing jurisdiction. Any additional sales tax collected should be entered on Line 6, Excess tax collected, on the Colorado Department of Revenue remittance form DR0100.
- If a lease contract states the higher rate of 0.80%, what sales tax should be collected?
On a lease contract, the sales tax stated in the contract should be collected and remitted until the end of the contract. Any additional sales tax collected should be entered on Line 6, Excess tax collected, on the Colorado Department of Revenue remittance form DR0100.
Sales Tax - Consumer
- When do I need to pay Larimer County sales tax?
Whenever there is a transfer of tangible personal property and both the vendor and purchaser are located within Larimer County.
- Are there any exemptions for collecting the County sales tax?
Since Larimer County is state collected, we follow all state exemptions. Please refer to the Sales Tax FYI Publications
for specific items.
- Is there sales tax on food items?
If the food items are purchased for home consumption, no Larimer County sales tax is collected. Ready made food items for immediate consumption, such as food served at restaurants, convenience store, catered events or grocery prepared deli meals, are taxable. Please refer to the Sales Tax FYI Publications - Sales 4
for more details.
- Is there sales tax on delivery of items?
If the delivery cost is separated on the invoice AND there was a choice of the delivery method, delivery is non-taxable. If the delivery is included in the overall costs, and not separated on the invoice, or there was no choice of delivery, delivery is taxable.
- I believe that I overpaid my county sales tax. How do I request a refund?
All Larimer County sales tax refund are processed through the Colorado Department of Revenue. Complete the DR0137
, Claim for Refund. The form and all back-up documentation should be sent to the Department of Revenue, Business Tax Accounting, 1375 Sherman St., Room 208, Denver CO 80261.
- Is there a deadline on how long I can request a refund?
By State Statue, all requests for refunds have a deadline of three years. This deadline is for both sales and use tax.
- I need a letter stating I am not in any city limits.
If you call (970) 498-5930 with the delivery address, we can verify the address is not in a city limits and send a letter giving the tax rate for items delivered to that address.
- How do I prove that our organization is exempt from County sales tax?
If you are State exempt because you are a government or charitable organization and the items you want to purchase are for the organization's own use, present a copy of the exemption certificate at the time of purchase.
Sales Tax - Vendor
- Why do I need a State sales tax number to apply for the County's sales tax license?
Because the County is "Statutory" or "State Collected", all Larimer County sales tax is remitted to the State and then passed on to the County under the State's sales tax number. The State's sales tax number is used as a reference whenever issues arise with the State.
- When starting a business, where do I start?
- As a vendor, am I allowed to retain a vendor fee when I submit the sales tax?
The Larimer County Service Fee, also known as the Vendor's Fee, is two and twenty-two one hundredths percent (2.22%) for all Larimer County sales tax filers who submit timely filed returns. It is not allowed on a delinquent return.
- I purchased a business in Larimer County. Is there any sales tax due?
When a business is purchased within Larimer County, sales tax is due on the tangible personal property that transferred in the purchase. Items such as desks, tables, tableware, equipment, and computers are some examples of taxable tangible property. To determine the value of the tangible personal property, refer to the sale contract.
- I purchased a business in Larimer County. Can I continue to use the existing license?
When a business has a change of ownership, new State and County licenses must be applied for.
- If I am purchasing items for resale, do I pay sales tax?
If the tangible personal property is inventory for resale it is exempt from sales tax. However, at the time of purchase, a copy of your State and Town or City (when applicable) sales tax licenses must be presented.
- Does receiving a Larimer County sales tax license imply that a business has permission to open?
No. The purpose of the Larimer County sales tax license is to show the public that the business has the authority to collect and remit Larimer County sales tax. It does not imply that a business has permission from Larimer County to operate. It is the owner's responsibility to contact the various County departments or other taxing jurisdictions to determine the legality of doing business.
- Does a vendor located in Greeley (or Boulder, etc.) who delivers to locations in Larimer County need a Larimer County license, or collect Larimer County sales tax?
If the business is delivering items into Larimer County and has no physical presence (store front, office, warehouse, etc.) within Larimer County, no county sales tax would be collected.
- If my business is located within Larimer County and I deliver to a location outside of Larimer County, do I collect county sales tax?
For deliveries outside of Larimer County, no County sales tax is collected.
- When does my Larimer County sales tax license expire?
The Larimer County sales tax license does not expire. However, it does become invalid if the business closes or ownership changes.
- How do I request a change of mailing or location address?
The easiest way to change an address is to call the office at (970) 498-5930. You will need to provide your Larimer County or State sales tax number, your name and phone number, name of the business, and new address. A new license will be sent out with no fee the next time licenses are processed. Be advised, we can only change the address in the Larimer County sales tax system. The Colorado Department of Revenue, other taxing jurisdictions or other County departments, do not get this change and will have to be contacted separately.
- Are there any fees associated with the license?
There is no fee for submitting and processing of the first license. If you would like a stamped copy of receipt of the application, there is a $ 0.25 per copy fee. If you need a second license and it is processed during Larimer County's regular process period, no fee is due. However, if you need an immediate second license, a processing fee of $5.00 will be due.
Use Tax - Motor Vehicle
- Why do I pay a use tax on motor vehicles?
A use tax is due at the time of registration because sales tax was not collected at the time of purchase. State Statues give counties the authority to collect motor vehicle use tax.
- How can I get a refund of Motor Vehicle use tax?
All refunds of Motor Vehicle use tax have to go through the Larimer County Motor Vehicle
department. Complete the refund form and submit all documentation that supports your claim. Lack of documentation can delay the process and your refund.
Use Tax - Building Materials
- If I paid use tax on my building permit, how do I get exempt from paying sales tax?
When a contractor/home owner purchases building material to be used in 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 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.
- We are a contractor for a exempt organization, how do I prove the exemption?
If you 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.
- If I have a County building permit, can I use it to purchase materials in other counties?
The exemption given with the building permit is valid for all counties in Colorado. If you present a copy of your building permit at the time of purchase, you will be exempt from any county sales tax.
- If I paid use tax on my permit and sales tax when I purchased my materials, how do I get a refund?
For a refund of use/sales tax with regard to a building permit, a Project Cost Report
(see below) must be completed.
- 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.
Project Cost Reports (PCR)
- Why is a Project Cost Report (PCR) required?
A Project Cost Report is the tool used to compare the estimated building material costs to the actual building material costs to ensure the correct tax was collected.
- What is needed to submit a PCR packet?
A complete PCR packet will include a complete PCR form, a copy of the permit showing how much use tax was paid and a final job cost summary at a minimum. Additional documentation, such as copies of receipts, invoice and subcontractor's affidavits can also be included and give a clearer picture of the project. Usually this results in a higher refund or less additional taxes due.
- When is the PCR packet due?
The completed PCR packet is due 60 days after the issuance of either a Certificate of Occupancy (CO), letter of completion, or finalization of the project. A penalty of 10% of the use tax deposit and interest will be assessed on the 61st day even if a refund is requested.
- As a homeowner doing the work as a contractor, I do not have a final cost summary. What documentation can I use instead?
Any worksheets showing the total cost of the project as accepted. Bank draw records are also another was to show the total cost. (Hint: if you ask the bank for a copy of your file after the project is completed, you have an organized packet that shows the total cost and copies of all the receipts and invoice)
- I purchased materials and paid sales tax because I did not have my building permit. How do I get credit for the sales tax?
Since there is a mechanism in place to exempt the sales tax, a copy of the receipt needs to be provided with the PCR packet to receive credit for the sales tax.
- I purchased materials and paid sales tax in another county because I did not have my building permit. How much sales tax credit will I get?
If you provide copies of the receipts with the PCR packet, you will get credit for the amount of sales tax paid, not to exceed the Larimer County rate. So if you purchase and pay sales tax on material in Boulder, you will get credit for the .65% Boulder County sales tax. Since this is lower than the Larimer County sales tax of .8% additional taxes are due on the materials. By the way, Weld County does not have a county sales tax, so no county sales tax credit is given for purchases made there. If you purchase and pay sales tax on materials in Alamosa, even though the county tax rate is 2.0%, only .8% credit would be given since it is the amount that you prepaid. Policy on credit of sales tax paid is dictated by Colorado State Statues.
- How long does it take to get my refund?
We audit/review every Project Cost Report submitted for projects located in Larimer County and the Cities and Towns within Larimer County. It is our goal to complete the review and process the payment within 90 days of receiving the PCR packet. Incomplete reports and missing receipts may add processing time.
- Instead of submitting copies of receipts and invoices, can I give the originals and get them back after the audit?
We are unable to return any documentation after the review/audit. By State Statue, the Larimer County Sales Tax department is required to keep records of refunds and the backup documentation for three years.
- Is labor taxable?
Most labor is not taxable. Some samples of non-taxable labor would be grading, supervision, observation, and installation. Fabrication labor is taxable. Fabrication labor is usually found in cabinetry or iron work, where the raw material is created into a taxable product.
- I had a subcontractor that gave one price for both labor and materials. How do I determine the material cost?
With a lump sum contractor, where there is no breakdown of labor and material, use a 50-50 breakdown. You can ask you subcontractor to complete a Subcontractor Affidavit which would provide the actual breakdown. If the subcontractor wants, they can mail or fax it directly to the Sales Tax office.
- I disagree with the assessment of additional taxes due. How do I dispute the assessment?
Larimer County must follow the Colorado Revised Statues with regard to assessed tax disputes. Please refer to Section 29-2-106.1 C.R.S.
for the dispute procedure. Hearings will only be schedule for disputes regarding legal interpretation. A hearing is not allowable for argument over valuation or assessment amounts.