If the project requires a City of Greeley Building Permit a valuation of the project is done by the Building Inspection Department. If the project is valued at $75,000.00 or less per unit then 45% of the valuation is estimated to be materials and Greely use tax is collected on that amount. If the valuation per unit exceed $75,000.00 then 50% of the valuation is determined to be materials subject to tax.
For example:
Valuation is $100,000.00 X 50% = $50,000 materials x 4.11% Greeley tax = $2,055.00 Tax
Please note that the tax collected on the permit is an estimate and the City of Greeley may at the conclusion of the project perform an audit to determine the actual amount of materials that were used. This amount is then compared back to the tax paid on the permit and will typically result in no additional tax due, additional tax is due or a refund.
If tax has been paid on the building permit then when making purchases of construction materials for the project, the permit should be presented to the materials supplier in order to avoid being charged a City sales tax by the supplier. It should be noted that the tax paid on the permit does not entitle the purchaser to buy tools, equipment and other supplies that do not become incorporated into the building tax free.
If the project does not require a City of Greeley building permit than all purchases of materials would be subject to Greeley sales and use tax like any other purchase.