City of Loveland
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Motor Vehicles
A 3% use tax is applied to motor vehicles and other vehicles that require registration, if the seller does not collect and remit the 3% sales tax at the time of purchase.
Construction Use Tax on Building Permits
Overview
Construction Use Tax applies to all construction and building materials used within the Loveland city limits. This tax is collected upfront as an estimated deposit when your building permit is issued.
What Is a Building Permit?
A building permit is an official approval from the city, county, or state that lets you begin construction or make changes to a property.
When Do You Need a Building Permit?
A permit is required for projects that impact the structure, safety, or use of a residential or commercial building or property. Examples include:
If you're unsure whether your project needs a permit, contact the Building Department before starting—some minor cosmetic projects may not require one.
Where to Get a Permit
Apply here: City of Loveland Building Division You will also find helpful Permitting FAQs on this page.
Your estimated Use Tax is calculated as:
50% of your project valuation × 4.05% total Use Tax rate.
Use Tax Rates
• City of Loveland: 3%
• Larimer County: 1.05%
• Total: 4.05%
Who Pays the Tax?
The general contractor usually pays the Use Tax deposit when the building permit is issued. The Building Division collects both City and County Use Tax along with standard permit fees.
Using Your Building Permit When Buying Materials
Show your building permit at the register to avoid City and County sales tax on building materials. State sales tax still applies unless the project is tax‑exempt.
You can also provide copies of your building permit to subcontractors who will be purchasing materials.
Construction Use Tax Reconciliation
After a project is finished, contractors may choose to reconcile the estimated Use Tax paid with the building permit. This compares the estimated tax to the actual tax owed based on final material costs.
Key Things to Know
• Reconciliation is optional, but projects may be audited for up to three years after the Certificate of Occupancy is issued.
• Once started, a reconciliation cannot be canceled.
• Actual costs must include materials, labor, subcontractors, rentals, and any taxes paid.
• Invoices without a materials/labor breakdown may be treated as 100% taxable materials.
• Smaller invoices lacking detail may default to 50% materials / 50% labor.
• The City may request invoices or subcontractor affidavits for high‑value items (flooring, cabinets, appliances, granite, etc.).
• Fabrication labor is taxable; installation labor is typically not taxable. If installation labor is in a lump sum with taxable materials, the entire amount will be taxable.
Job Cost Reconciliation (JCR) Form
• Use the editable JCR forms below to record materials, subcontractor costs, rentals, labor, and sales tax paid.
• The second tab includes a Loveland JCR Taxability Chart to help you determine what is taxable.
• Any City of Loveland sales tax paid will be credited toward the Use Tax due.
• Actual material costs are compared with the original permit valuation to determine if you owe more tax or qualify for a refund.
Required Documents for JCR Submission
• Invoices showing any City of Loveland sales tax paid
• Subcontractor affidavits with total cost, materials, rentals, and tax paid—including supporting invoices
• A Job Cost Report for the project
• Retain all project documents for three years in case of audit
Determining Tax Rates
• If an invoice lists only a total tax amount, divide the tax paid by the taxable materials cost to find the tax rate.
• A 6.95% tax rate includes State (2.9%), County (1.05%), and City (3%).
• A 3.95% rate reflects only State and County tax.
• Rates above 6.95% often indicate sales tax from another city.
• Note: County tax was 0.80% prior to January 1, 2026.
Tax‑Exempt Projects
Projects that qualify for tax exemption must first obtain a State of Colorado Contractor’s Exemption Certificate. Apply here: Contractor Application for Exemption Certificate
After receiving your State certificate:
• Apply for a City of Loveland building permit.
• Provide subcontractors with both the permit and your exemption certificate showing their business name and project details.
• The City of Loveland honors the State exemption certificate and does not issue its own.
Eligible projects include public infrastructure, government buildings, charitable facilities, nonprofit schools, and certain affordable housing projects.
Forms and Resources
• Job Cost Reconciliation (JCR) With Categories
• Job Cost Reconciliation (JCR) Without Categories
• Subcontractor Affidavit and Instructions
Submitting Forms
Submit completed forms and documentation by e-mail or in person:
Sales Tax Division
500 E. Third St., Suite 110
Loveland, CO 80537
You’ll be notified of any tax due or refund. Reconciliations are processed as quickly as possible and in the order they are received.
Contact
Pamela Hemingway
Construction Use Tax Specialist
pamela.hemingway@cityofloveland.org
970‑962‑2702
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