Do contractors charge sales tax in Colorado?
In Colorado it depends on how the contract is written. Under a lump-sum contract the contractor is the CONSUMER of the materials and charges the customer no sales tax. Under a separated or time-and-materials contract the contractor is a RETAILER of the materials and must charge the customer sales tax on them. Colorado also has county, city or special-district rates on top of the state rate, so the rate depends on where the job site is, not where the contractor is based. Source: Colorado DOR Sales 6, "Contractors and Retailer-Contractors" (consumer on lump-sum; retailer on time-and-materials).
| What | Colorado |
|---|---|
| Contractor’s default role | Depends on the contract |
| What the charge is called | Sales Tax |
| Local rates on top | Yes — sourced to the job site |
| Capital improvement exempt to the customer | Yes |
Notes
Colorado has home-rule cities that administer their own sales tax with their own rules and their own returns; a state-plus-county quote can still be wrong inside one.
Source
Colorado DOR Sales 6, "Contractors and Retailer-Contractors" (consumer on lump-sum; retailer on time-and-materials). — last checked 2026-09-15.
This is a summary of a state’s published guidance, not tax or legal advice. Rates and rules change, local jurisdictions add their own, and the treatment of a specific job depends on the contract and the work. Check the citation and speak to a CPA or a state tax adviser before relying on it.
How Seayora uses this rule
Seayora resolves this rule on every invoice a contractor raises — per line, from the job site’s own address — and prints the rate, the jurisdiction and this citation on the document itself, so the estimate a customer accepts is the invoice they are billed. Where the rule is more nuanced than a single answer, Seayora refuses to guess a total rather than quoting a confident wrong one.
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The same question in other states
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