Pro guide
Colorado sales and use tax for contractors
General info only. Check with a licensed pro and your local building department.
Your tax treatment depends on the contract type. From Colorado DOR publication FYI Sales 6.
What the sources say
| Topic | What the source says | Source |
|---|---|---|
| Lump-sum contracts | A contractor does not need a sales tax license for lump-sum contracts and pays tax on construction and building materials it buys. | Source page checked 2026-11-02 |
| Time-and-materials | A contractor with time-and-materials contracts must have a sales tax license, may buy materials tax-free for resale, and collects sales tax on the marked-up price charged. | Source page checked 2026-11-02 |
| Non-building materials | Items like stoves, furnaces, air conditioners, carpet, ready-made cabinets, garage doors and sod are not construction materials; the contractor collects sales tax on them as a retailer. | Source page checked 2026-11-02 |
| Equipment and supplies | Contractors pay sales tax on equipment and supplies they use. | Source page checked 2026-11-02 |
| Building permits | Materials can be exempt from state-administered city or county sales tax if you show the seller a building permit showing local use tax is paid or required. State and special-district taxes still apply. | Source page checked 2026-11-02 |
| Home-rule cities | Denver and other home-rule cities run their own sales and use taxes — contact the city directly. | Source page checked 2026-11-02 |
Not confirmed yet
- Unknown Denver's own contractor use-tax rules and rates — not reviewed here.
Checked 2026-11-02. General information, not legal advice.