Colorado Sales Tax for Contractors (2026): Who Pays on a Home Remodel
Whether a Colorado contractor charges sales tax on a home remodel, who pays on materials, and three jobs worked at 2.9%.
Not tax advice. General information from each state's revenue department, checked Oct 29, 2026. Rates shown are the state rate; city and county tax is extra where it applies. The facts of your job and contract can change the answer; for a specific job, ask a tax professional in your state.
The rule in Colorado
Materials only
On a lump-sum job you pay tax on materials and bill none; labor isn't taxed.
2.9%
2.9% plus local, including home-rule cities
Itemizing or time and materials
On time and materials you become a retailer and collect tax on the marked-up materials.
None
Source: CDOR GIL-25-004 (CDOR letter, Mar 24, 2025)
“treated as the consumer of all construction and building materials”
Three jobs, worked
| Job | Customer | You pay |
|---|---|---|
| Bathroom $12,000 job, $5,000 materials | $0 | $145 |
| Kitchen $40,000 job, $15,000 materials | $0 | $435 |
| Addition $90,000 job, $35,000 materials | $0 | $1,015 |
On the kitchen: The customer pays no sales tax. You pay $435 on $15,000 of materials at 2.9%, and build it into the price. Itemize materials or bill time and materials and you collect 2.9% on the materials from the customer instead.
Also check
- Home-rule cities like Denver run their own sales and use tax. Check the city where the job is.
Colorado sales tax questions
Do contractors charge sales tax in Colorado?
Not on a home remodel. The contractor pays tax on materials when buying them and charges the homeowner none. On time and materials you become a retailer and collect tax on the marked-up materials.
Is labor taxable in Colorado?
Not for remodeling a home.
What rate do contractors pay on materials in Colorado?
2.9% state rate, plus local tax. Home-rule cities like Denver set their own tax.
Compare other states
How we checked
We read each state's sales tax rule for construction contractors on the revenue department or legislature site, and its 2026 state rate. Two independent research passes covered all 50 states and DC, and a third reviewer checked the result. Where a state's own page would not load, the row names the copy we read. Last checked .
This guide explains the general rule for remodeling an owner-occupied home. It is not tax advice.