The Building Materials Use Tax is assessed on anyone who is performing construction work which requires a building permit. This tax is estimated and paid prior to the issuance of the building permit. Building Materials Use Tax is calculated based on the contract price which includes the total cost of the project including building materials, labor, overhead expenses, and profit. Building materials are defined as materials that become permanently affixed to the building and include bricks, concrete, glass, steel, stone, and lumber.
Use Tax Rates
The Building Materials Use Tax is 3.25%, of which 3% is the village’s Use Tax and 0.25% is designated to Arapahoe County Open Space Tax. The estimated tax due is 3.25% of 60% of the cost of construction. (The first $3,500 of building materials is exempt). Tax-exempt entities such as government agencies and religious and charitable organizations are exempt from the Building Materials Use Tax.
Building Materials Use Tax Calculation Example
Step 1: Determine value of taxable materials
| Building materials cost |
$180,000 |
| Exemption |
($3,500) |
| Taxable building materials |
$176,500 |
Step 2: Calculate Use Tax due
| Tax rate (city and county) |
x 3.25% |
| Estimated Use Tax due |
$5,736.25 |
Please note that Building Materials Use Tax applies to building permits with a contract price in excess of $5,833.
Purchasing Building Materials
Contractors should provide their suppliers with a copy of the building permit as proof that the appropriate municipal taxes have been paid. No municipal sales tax shall be due on purchases of building materials when the use tax has been paid on a building permit. Purchases made without a building permit are subject to all legally imposed sales tax.
Use Tax Assistance
A member of Greenwood Village Taxpayer Services is available Monday through Friday from 8 a.m. to 5 p.m. to answer your tax questions at 303-486-8299. A taxpayer may submit a written request for refund along with all invoices associated with the construction project, if it is believed the use tax paid exceeds 3% of the purchase price paid for building materials.
Other Building Permit Fees
- Building fees generally include:
- A permit fee based on the contract price
- A plan review fee which is 65% of the permit fee
- The Building Materials Use Tax which is 3.25% of the materials cost
For questions related to building permits and plan review fees, please call the Community Development Department at 303-486-5783.