General Use Tax Rate: 3.75 %
Use tax is imposed on the use, storage or consumption of tangible personal property or taxable services not subjected to the city sales tax (e.g. supplies, fixtures, furniture and equipment [not inventory] that is stored, used or consumed within Aurora upon which no local legally imposed sales and use tax was paid at the time of purchase, lease or rental). Use tax is complimentary to sales tax, but is paid directly to the city rather than to a vendor collecting on behalf of the city.
In other words, use tax is simply "sales tax that wasn't paid to the vendor."
It is the responsibility of the Aurora business making a purchase from a company outside of Aurora to verify that the vendor is licensed to collect Aurora tax, if in fact the company does charge a local sales tax on its invoice. Sales tax paid to an unlicensed vendor does not result in payment to the city. As a result, the purchaser is still responsible for payment of Aurora Use Tax.
Examples of Taxable Situations Concerning General Use Tax
1. ABC Paper Company buys a machine from a manufacturer in Chicago. ABC will use the machine to make books at its Aurora facility. The Chicago firm does not collect Aurora sales tax. ABC is required to pay the city 3.75 percent use tax. ABC will include this on line 10 of their Aurora Sales and Use Tax return.
2. XYZ Bookstore buys a carload of cash registers. They will be stored in Aurora and shipped to various stores in and out of Aurora as needed. The vendor did not charge XYZ Aurora sales tax. XYZ must pay 3.75 percent Aurora use tax on all cash registers, including those to be shipped to stores outside of Aurora. XYZ will include this on line 10 of their Aurora Sales and Use Tax return.
3. Tafoya Construction Company buys a shipment of steel beams from a steel mill in Pittsburgh. The shipment is received in Aurora. The Pittsburgh firm does not collect Aurora sales tax. Tafoya is required to remit 3.75 percent Aurora use tax on the cost of the steel on line 10 of their Aurora Sales and Use Tax return.
4. Angie Office Furniture has an executive chair in inventory. The President of Angie needs a new chair for her office. Because Angie is a dealer in office chairs, they buy them free of Aurora sales tax. When they withdraw the chair from inventory for their own use, they are required to pay 3.75 percent Aurora use tax. Angie will report the use tax on line 10 of their Aurora Sales and Use Tax return.
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• A building use tax deposit is collected at the time a building permit is issued for construction or improvements to any building, dwelling or other structure. This deposit is only an estimate. At the conclusion of the project, the costs are reconciled to determine the final amount of building use tax to be paid or refunded on the project.
• The building use tax deposit is calculated by multiplying the building materials cost as defined in Section 130-31 of the Aurora city code by Aurora’s city tax rate of 3.75% (4.00% in Arapahoe County).
• In no event shall the amount of tax to be held be less than 3.75% (4.00% in Arapahoe County) of 50% of the permit fee determination assessment made by the building division. Even though the fee determination assessment has no relationship to the construction material costs, historically, 50% of the assessment amount has been reasonably close to the actual cost of the building materials cost.
• No more than 90 days from the date of the final certificate of occupancy or final inspection, a reconciliation between the deposit paid and the actual project tax owed must take place. Reconciliation is a process performed by the tax audit section of the Tax and Licensing Division upon completion of a permitted construction project to determine whether there was an overpayment or underpayment for building use tax.
Use Tax on Tangible Personal Property (Non-Construction Materials)
• Tangible personal property not considered construction materials, but still subject to sales and use tax:
1. does not become a permanent part of the real property and/or
2. can be removed without causing significant damage to the realty and/or
3. can be removed without altering the intended functional use of the structure.
Some examples are appliances, cabinets, carpeting, etc.
• Other items purchased for use at the job site that are not considered construction materials include but are not limited to tools, portable toilets, temporary offices, office supplies, office equipment, hay bales, temporary walls, barriers, safety equipment, rental equipment, and other similar items.
• If sales tax is not paid to the seller by the purchaser at the time of purchase, then the purchaser must submit a city of Aurora sales and use tax return or the tax due on tangible personal property on non-construction items can be included on the project reconciliation.
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