Reduced Use Tax for Development
Sales tax is imposed on the purchase of tangible personal property purchased in the State of Colorado. Vendors are required to collect sales tax in common with the address were possession is taken by the purchaser. The vendor is not required to collect sales tax if the purchaser or product is exempt. Some examples of exempt purchases may include, wholesale purchases, building materials (with permit), and non-profit purchases. The current sales tax rate in Bennett is 4%.
Consumer use tax is a complement to sales tax. It is payable to the state when sales tax is due but has not been collected on purchases that did not include sales tax. Bennett Use Tax is only imposed on building materials. The current Use Tax rate in Bennett is 2%. This is somewhat uncommon in the State of Colorado where most taxing jurisdictions match their Sales and Use tax rates.
This variance in Sales and Use Tax rates can be a huge incentive for developers in Bennett due to the lower use tax rate. In short, builders will only be subject to the 2% Use Tax rate on their building materials rather than the 4% sales tax. This can result in a substantial tax savings.