The City of Lakewood requires that use tax be paid on construction and building materials used or consumed in Lakewood. Use tax may be paid in one of the two ways:

· Use tax can be paid at the time a permit is obtained. Use tax is calculated based on fifty percent (50%) of the general contract and/or mechanical contract costs. The use tax paid on a permit is an estimate and/or a deposit.

· A sales/use tax return based on actual construction materials used or consumed in Lakewood must be filed each month following the start of construction. The return must include a summary of all invoices and statements for purchases. The return is to be filed and paid on or before the tenth (10th) day of each succeeding month. To use this method, a use tax license must be obtained from the Revenue Division.

If a contractor elects to pay the use tax at the time of obtaining a permit, no other city taxes should be paid when materials are purchased. The City of Lakewood building permit should be presented to the supplier to avoid the imposition of a city sales tax on materials purchased. State, Regional Transportation District, County (if applicable), and other special district taxes will still be collected.

Who is responsible for paying use tax to the City of Lakewood?

Generally, the general contractor will pay a use tax deposit at the time the permit is issued. However, the property owner is ultimately responsible for any use tax liability that may be incurred.

What does the process look like?

A permit is required for all residential and commercial structures built in the City of Lakewood. At the time the permit is issued, the General Contractor will receive information relating to the reporting and remittance of use tax. A deposit toward the total use tax due is remitted at that time.

Upon completion of the project, a Certificate of Occupancy (CO) will be issued for the property. Upon issuance of the CO, the general contractor will receive a reminder, from the City, to reconcile the use tax deposit paid, with the tax due on the actual cost of materials and taxable services incurred.

The City may audit the actual costs of a project for up to three (3) years from the date of the certificate of occupancy or the contractor may request an audit upon completion of the project.

What if materials are purchased before a permit is obtained?

The regular use tax deposit will be made and paid at the time the permit is obtained. If materials are purchased before a building permit is obtained, the contractor may receive a credit of the City's use tax paid. The credit is subject to approval by the Revenue Division. To obtain a credit or refund, the contractor must keep all receipts relating to the project. A refund will not be issued until the completion of the project and a Certificate of Occupancy is issued. The contractor may request a refund at the end of the project. The Revenue Department will review the documents and if there is an overpayment of use tax, a refund will be issued.

What happens when materials are purchased in Lakewood after a permit is obtained?

If materials were purchased from a licensed Lakewood vendor and Lakewood City sales tax was paid in addition to the use tax, a refund may be issued. To obtain a refund, the contractor must keep all sales receipts relating to the project. A refund will not be issued until the completion of the project and a Certificate of Occupancy is issued. The contractor may request a refund at the end of the project. The Revenue Department will review the documents and if there is an overpayment of use tax, a refund will be issued.

What happens if materials are purchased in another municipality?

If the materials were purchased in another municipality and a local sales tax other than Lakewood city tax was collected, you may contact the vendor and ask for a refund based upon Lakewood use tax paid, or you may contact the governing agency (City of Aurora, City of Englewood, etc.) to request a refund. The City of Lakewood does not influence how other cities handle refunds, but it is generally agreed that cities will cooperate with each other. The Lakewood building construction use tax will be charged when the contractor obtains the permit.

How do I determine if I have overpaid or underpaid use tax?

Overpayment or Underpayment of use tax is determined by taking the tax due on the actual cost of materials and taxable services, less the use tax deposit paid. (Materials and taxable services purchased by Subcontractors must be included in this calculation.)

(Example of an Underpayment Calculation)

(Example of an Overpayment Calculation)

What do I need to do if I have an underpayment or overpayment?

If an underpayment is calculated, submit a copy of the reconciliation and the payment due, along with applicable penalties and interest to the Finance Department. (Any additional tax liability, including penalty and interest, needs to be paid to the City, or the property may be subject to lien.)

If an overpayment is calculated, you must file a "Building Use Tax, Request for Refund" form with the Finance Department. Additionally, a copy of all supporting documentation must be attached for review.

If you have questions about the building construction use tax, please contact the Revenue Division at 303-987-7637 or 303-987-7638.

Construction Use Tax Reconciliation Form

Subcontractor Affidavit

Lakewood Municipal Code.Title 14-Buildings and Construction

Email the Finance Department

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