Loveland Use Taxes
History and Overview
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In the 1990’s when the City of Loveland became a home rule city, collection of all sales and use taxes (previously the responsibility of the state)
were taken over by the City of Loveland. The Loveland Use Tax was created in the late 1990’s and imposes a 3% fee on all materials used in
the construction of new buildings or homes within the City of Loveland.
The logic behind a Use Tax is that the materials being used on Loveland construction sites was being purchased outside the city. Other local
governments were benefiting from Loveland’s building boom since the sales taxes paid for these building materials purchased outside Loveland
stayed in those communities. The Use Tax is an effort to try and repatriate those dollars back to the community.
A construction Use Tax, simply explained, imposes a percentage fee on all building materials (not labor) used in new
construction within the city. According to state law, the builder can use evidence of the Use Tax payments to become exempt
from local sales taxes wherever the supplies are being purchased(within Colorado) thus transferring the taxes paid from where
the material is bought to the place where the building is constructed.
Below is language in the municipal code regarding the Use Tax;
3.16.040 Use tax imposed.
There is imposed and there shall be paid and collected a use tax upon the privilege of storing, using or consuming within the city any
construction and building materials and motor and other vehicles on which registration is required, purchased at retail, such use tax
to be in the amount of three percent of the retail cost thereof (the "use tax"). The use tax shall be collected in accordance with the
schedules set forth in the rules and regulations promulgated by the city manager.
3.16.070 Use Tax Exemption
E. The City's sales tax shall not apply to the sale of tangible personal property at retail or thefurnishing of services if the transaction
was previously subjected to a sales or use tax lawfullyimposed on the purchaser or user by another statutory or home rule
municipality equal to or inexcess of the sales tax required to be paid pursuant to Section 3.16.020. A credit shall be grantedagainst
the City's sales tax with respect to such transaction equal in amount to the lawfullyimposed local sales or use tax previously paid by
the purchaser or user to the previous statutoryor home rule municipality.
|History of Loveland's Use Tax